CRM Tips: The Trouble With Activity Management

The whole point of a CRM system is to improve revenue productivity and the quality of customer interaction. That means measurement. So why shouldn't measurement look beyond output and examine the activities that contribute to revenue, closed cases, and happy customers?

By David Taber
Mon, February 01, 2010


CRM systems are almost always used for lead, contact and deal management. Sales and marketing put data into the system so that pipeline formation and deal flow can be seen and worked in a systematic way. Many companies also use CRM for customer service, which uses calls and cases as the core workflow. Once your company gets a decent proportion of the customer interactions in the system, you can easily produce reports and dashboards that allow management to see more about the business, spotting bottlenecks or other problems in your operation. Consequently, most companies use data from the CRM system to set standard performance levels for the sales, marketing, and customer service organizations, measuring them against quotas by month or quarter.

CRM Definition and Solutions

So far, so good. But it's tempting to take things to the next level of detail, monitoring the number of activities an individual does. For a telesales rep, it could be the number of dials or the number of e-mails processed during a day. For a customer service person, it could be the length of a call. While these might sound like reasonable things to measure, they can lead to some nasty problems and unintended consequences:

• Activity metrics are easy to propose, but hard to make meaningful. Most companies don't have a realistic model of its business process — how does the "number of dials" affect the number of closed deals? Consequently, activity metrics tend to gravitate toward things that are easy to measure, rather than things that have the desired business impact. What you'd really like to know is the "number of meaningful conversations" — but how do you measure "meaningful"? If a telesales rep never dials the phone, they're not going to get anywhere. But if they're dialing all day long and talking to prospects in the wrong way, they won't make many sales either.

• Activity metrics are typically expressed as a number of individual actions. But in most business processes, meaningful activities need to involve a sequence of actions completed within time thresholds. So it's better to derive activity metrics from chains of individual events (such as, "number of approved quotes issued within 15 minutes of customer inquiry")...but it's also harder.

• Most marketing and sales organizations have no solid idea about what combination and sequence of activities is required to develop and close a new customer. There are plenty of theories, suppositions, and anecdotes, but no hard numbers. Does it take two on-site visits to land the deal, or three? If a rep has done five on-site visits, does that make it more likely he's closing a tough target...or that he's already lost the deal and just wasting time? The true answer is "it depends on the specifics" — which means you can't really develop a quantitative model. So activity metrics are almost always misleading.

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