5 Styles of CRM Measurement

Companies look at CRM in many different ways. How a company measure’s CRM can say a lot about what the company values, how they operate, and whether or not they are looking to achieve long term success. According to Dr.

Vince Kellen, there are five traditional types of CRM measurement. These styles are: Hard ROI – This style of CRM measurements is designed to look specifically at what can bring in revenue to the company (or reduce the costs of certain business practices). The Hard ROI measurement system is primarily concerned with what will bring the company the most money, and while its focus may be on the customer, its target is always the revenue it generates, looking at numbers far more than anything else.

Intangible Benefits – This approach to CRM measurement is the opposite of the Hard ROI approach. Companies measure things that have less quantifiable value, like brand recognition. It’s impossible to know how much ROI these bring, although they have been linked to good long term company outlook.

Competitive Assessments – As the name implies, this style of CRM measurements seeks to understand how competitors are currently interacting and bringing value to customers in order to spot weaknesses to exploit, actions to copy, or areas to market. Value Driven – CRM measurements that are value driven involve looking more into how to bring and receive more value from a customer, based on things like customer satisfaction, etc. It has similarities to the Hard ROI model but is looking at a less specific numerical value.

Instinct and Experience – Unlike all of the other approaches, the instinct and experience type of CRM measurement is simply not so much a measurement at all, but rather a decision making strategy wherein an employee/manager’s expertise is used to decide the best course of action, rather than research. Dr. Kellen suggests that this is not a “right versus wrong” list, because most companies tend to switch back and forth between the different types of CRM measurements as they move forward, depending on their specific needs at the time of their research.

However, it does show how a specific mindset may interfere with real world results. Focusing too much on hard ROI ignores long term benefits. Ignoring competitive assessments may lead to increased competition with a specific competitor, and so on.

Even instinct and experience may be right, or it may lead you down a path of misinformation. It’s interesting to see where your own CRM measurement style falls, and whether or not it is affecting your bottom line.