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June 10, 2009

Are you able to measure your Marketing department’s effectiveness?

Marketing Effectiveness - a term that’s conspicuous with its absence in most organizations is gaining importance in today’s recession hit world. Marketing departments, traditionally a cost centre, are being asked to objectively demonstrate the impact of their marketing activities.

Traditionally the measurement of marketing activities’ output has been done through metrics like brand awareness, campaigns and events responses etc. Due to the subjective nature of these measures, the task of evaluating marketing department’s performance becomes difficult and quite often, organizations end up either aligning marketing goals to sales or setting subjective targets for various activities. The problem with both these approaches is that the organizations are never able to ascertain the exact dollar value that various marketing activities contribute towards the top line as well as the bottom line.

Managers across the industries are faced with some fundamental questions:

  • How can a marketing manager know in quantitative terms if it is better to invest cash in a brand-building campaign versus a sales promotion campaign?
  • How can they know which campaign was most successful with which kind of target audience?
  • How else can they segment their audience for a future campaign if not by analyzing the performance of their past ones?
  • How would they derive some learning out of their past marketing activities if they are not tracked by well defined KPI’s?

At broad level, the marketing activities can be divided into 2 categories; one, that have a defined audience and two, which are targeted at mass audience. While it becomes difficult to objectively measure the effectiveness of second category in pure dollar terms, measures like Return on Marketing Investment (RoMI) and Lead conversion can be effectively used to answer some of the above questions for the first category.

Here some would argue that a scenario like this is not ‘walk the talk’ as many campaigns would not show immediate results or are fraught with difficulties like capturing the orders tied to a campaign across different sales channel.

But the fact remains that any initiative that needs to ensure that a robust and objective model for Marketing Effectiveness is implemented has to be backed by clear strategic intent to implement a Closed loop Marketing structure (consolidated Marketing and Sales lifecycle) that ties your campaign to responses, response to leads, leads to opportunities, opportunities to orders and orders to revenue, using clearly defined metrics.

Irrespective of process optimizations and cost prohibiting factors, the truth remains that every organization’s marketing unit has to shed old theories and be innovative to effectively measure their marketing revenue.

June 6, 2009

Empowering the Next Generation Call Agent

I’ve had a hectic & eventful last few weeks, studying call center processes & agents in different types of call centers. I wanted to share some conclusions with this CRM community and take some feedback (and also break a chain of Customer Experience posts from my side!). This post is going to be less about the processes and more about the agents…
 

‘Average talk time’ and ‘Service levels’ continue to be the most significant measures of an agent’s performance. I have to jump into an analogy immediately… these measures are akin to a sales rep diligently tracking ‘SG&A’ as a key metric. These are certainly important & quantifiable metrics but need to be higher up in the pyramid. Levers to achieve good service levels and low SG&As are way broader than what a call agent or a sales rep can significantly influence. For a sales rep, the single biggest measure has been and will always be ‘Top-Line’. This, very clearly, is their raison d'être. I don’t know if we will ever achieve unanimity on this but what is the call agent’s raison d'être?

According to me, the answer is ‘First Contact Resolution’ (FCR). FCR is by itself a very loosely used term – defined and measured in a variety of ways (driven not so much by the business definition but more so by the ability to measure). The call center industry sees a variety of ways by which FCR can be measured. Some of the common methods employed are


a)       Quality monitoring – usually, a percentage of the calls are recorded and played back for quality improvement. Assuming 10,000 calls a month (that would be a small center by the way!), 70% FCR and 50% calls recorded, that translates to 3,500 calls being potential FCRs available for analysis. The flip side? One call translating to 2 mins talk time (on average) would mean that for a diligent study of FCRs in one month, the center will need 100+ hrs of invested time. Though a much smaller sample can give a good measure of the effectiveness of FCRs, this method will still not help in the measurement of FCRs. I would recommend this strongly, but not for FCR measurement month after month.
b)       Customer’s voice – Surveys to the customer (telephone or email driven) to know if their question was answered effectively in the first attempt. Even at a 10% response rate (1,000 calls), a good measure of the FCR can be achieved. That’s 100 responses per agent approx in a 10 person center. Not bad!
c)       Agent’s voice – The agent determines if the customer’s issue was resolved by the end of the customer’s first call. This is acknowledged by the industry to be ineffective – this method is as absurd as a frontline sales person having a final say in his/her sales volume for the month. In addition, the agent may not even be aware of an earlier call from the customer on the same topic if the real-time systems aren’t shrewd enough and the customer hasn’t gone into length that an earlier call was made on the same topic.
d)       Analytics – Evaluate if the customer called back in a given interval on the same request (say, within 5 days in a B2C banking context). This is a tough measure but can be measured if the CRM processes are well defined and a robust front office system is available to support it. Watch outs need to include seasonality (e.g.: Nearing a tax filing deadline) and non-call methods (like a visit to the branch) to get the same issue resolved.


For these measures, I would like to add a word of caution. Don’t leave the definition of ‘FCR’ to your call center. The more ‘open loop’ your call center is, the higher will be its FCR. There is a fundamental difference between ‘answer’ and ‘resolution’. A customer’s request is not to be measured as resolved if the resolution lies with another group, say field service (which involves a visit, say 2 days down the line). FCR targets can be adjusted accordingly but how you define your FCR will have a reflection on your customer’s experience.


Now, why is FCR all that important? How is it superior to talk time and service levels? Here are some reasons (not in any particular order) shared by best-in-class call centers…
1)       Take the quality monitoring example above. With FCR at 70%, 3,000 calls per month could potentially have been avoided if the agent had answered right the first time. That converts to a) 6,000 additional minutes available (note what that can do to service levels directly!) or b) 6,000$ of cost saved or c) 3,000 opportunities for outbound calls/campaigns/cross&up sells (ask your sales guys what that means)
2)       FCR is directly proportional to customer satisfaction. I don’t have too much data on this but I believe the scale will be similar. That is, if FCR goes up to 80%, customer satisfaction will also be somewhere near that figure. Note, this is huge.
3)       FCR is directly proportional to employee satisfaction. To achieve an FCR culture, support processes and systems need to be perfect. If they are perfect, you have a satisfied agent. Less angry callers to deal with on a Monday morning.


Since FCR tremendously influences the customer, the company and the call agent, it really needs to be THE measure of choice for the call agent and their managers. So, does anyone think there is a more important measure?

June 3, 2009

Customer Master Data : Plan or Perish

“Customer” – looks like the most coveted entity in a CRM application. Isn’t it? Of course that is the back-bone of any CRM application, but what if I say that its database is often the primary reason for many CRM implementations failures and lack of user adoption. Sounds intriguing, but it’s true. Turn the clock behind and sense that as users or consultants, have we not found it to be one of the most neglected or maligned entity in the system. Probably yes….

Data duplication, data redundancy, data mismatch, data obsolescence are some of the often seen issues in the customer master data in CRM applications. To compound the problem, visualize the integrated scenarios between CRM and ERP. Chances are that missing golden clients, absence of customer hierarchies, un-mapped customer life cycles processes etc. would be giving headaches to CIOs and business users alike.

 

So where is the solution ? The solution begins with the acceptance of the fact that customer master data needs a maintenance strategy which should be reviewed periodically. SOX based or similar validation checks, identification of golden source clients, proper data archival strategy with periodic data de-duplication or cleansing effort can go a long way to a healthy customer data base, which in turn is the foundation of a successful CRM application.

 

Additional data review or compliance with third party databases like Dun & Bradstreet can also help in keeping your customer master data up to date. Otherwise you would be looking for your ERP vendor “JD Edwards” in your customer master database and its ownership would have already got changed twice in few years time frame.

 

So shouldn’t I conclude by saying that “Customer data devo bhavah”, which means treat your customer master data like a divine entity !!!