What gets measured gets managed, but why? If something cannot be measured, then it cannot be managed? And if it cannot be managed, then how are results going to be measured? What about things that cannot be measured but still have to be managed, such as relationship?
Relationship is intangible, and therefore cannot be measured. Can it be managed? CRM says it can. But how? By software? Can something intangible be quantified? What exactly is relationship?
Positive relationship is a result of satisfaction, but satisfaction won’t guarantee loyalty. Loyalty comes from consistent positive relationship. The major difference between satisfaction and loyalty is “consistency.”
But still, knowing the difference between satisfaction and loyalty won’t help any firm manage relationship. So again, what is relationship?
This relationship thing has been the talk of the town in the Western world for many years. In China, relationship has always been important, for many thousand years already. The Chinese has a different terminology for relationship, and it is known as Guanxi. But still, how is relationship measured?
Before trying to find out how relationship can possibly be measured, it is important to understand how relationship is developed.
Relationship is made up of touchpoints. The more the touchpoint, the stronger the relationship. Whether the relationship is positive or not depends on each touchpoint experience.
Managing relationship without managing the touchpoint is not managing relationship. Relationship is no longer the critical success factor.
Relationship is then, touchpoint is now.
Daryl
Measurement and management are not always be causally related.
I can measure the weather by stepping outside, but I cannot hope to manage it. But I can manage customer satisfaction by delivering what they are looking for, by making it easy for them to do business with me and by always treating them with friendly respect. I don’t need to measure any of these things to be be successful.
As Einstein said, “Not everything that can be counted counts, and not everything that counts can be counted”.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Graham, that’s a nice analogy about the weather, and points out that collecting information doesn’t mean we can necessarily change anything. Although we could put on a coat or take an umbrella!
But I don’t see how someone can truly “manage” something without some kind of measurement, even if it’s just an assessment in the mind of a manager.
How do know if you’re delivering what customers “are looking for” without some kind of information, even if it’s just looking at their reactions and monitoring sales trends?
Yes, it’s possible to have certain practices like “treating them with friendly respect” without regard to whether it’s effective or not. (And you’d only know that if you assess/measure it somehow.) But it seems a stretch to call that “management.”
Personally, I agree with Daryl that relationships can’t be managed in a literal sense. But we can manage (and measure) business activities that impact relationship, including the quality of our products, services and experiences. And it’s certain possible to measure the health of relationships to enable us to connect the dots between business activities, customer attitudes and behaviors, and business outcomes.
Bob Thompson, CustomerThink Corp.
Blog: Unconventional Wisdom
Bob
Your response points very clearly to the core challenge of measurement.
Let us take my earlier satisfaction example a step further. Imagine you a small storekeeper who has been in business for 30 years and who knows all his customers personally. He has probably seen many of them grow up from babies. Does he need to run a satisfaction survey to find out if his customers are happy or a focus group to identify their needs for soap, ketchup and bread? No. His continuous contacts with his customers provides him with all the information he needs, without any formal measurement system other than stock turnover and weekly profits (I do not consider informal assessments to be ‘measurement’). In fact, instituting an imperfect measurement system may lead him to make dumb decisions that alienate customers due to the cognitive biases we have about the correctness of numbers. Sometimes the best measurement system, as in this case, is no measurement system at all.
But this informal approach, one that has stood the test of time for millions of shopkeepers and small businesses, obviously won’t work for larger busineses. So companies have Balanced Scorecards of measures to measure their business. The core challenge is in measuring the right measures and just in measuring those measures. Measuring the wrong measures or measuring too many measures can quickly lead to business problems and potentially to business failure. Want an example? Just look at the measurementitis that many governments have instituted to measure, monitor and mismanage public spending. Local authorities having to report spending measures that bear no relation to their effectiveness at providing public services. School teachers having to spend their evenings filling-out meaningless pupil performance forms. Policeman being given targets for their quota of arrests they have to make to hit government mandated targets. The list is endless. The measurement lunatics are running the asylum.
Measurementitis is all too common on companies that have recently got the measurement bug. Measurement is no bad thing. But measuring the wrong things or irrelevant things is. And that’s what gets measured in far to many companies today.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
I think the measurement issue gets simpler if one distinguishes between measurement as a process of control and measurement as a process of discovery. Management tries to keep things under control, within parameters, and therefore reliable measurement is good. Keeping things under control usually means you have a definition of what is to be controlled.
On the other hand, we live in a dynamic world that confronts us with issues and factors we don’t have under control and don’t understand. In this case measurement can be used to discover. The caveat is that the measurement itself may be flawed. The Einstein quote Graham referred to fits here.
In my mind the discover use of measurement is part of the function of leadership. I like the way John Seeley Brown (formerly of Xerox PARC) puts it, “Leaders don’t just make products and make decisions. Leaders make meaning.”
John I. Todor, Ph.D.
Author of Addicted Customers: How to Get Them Hooked on Your Company.
Graham
The reason why I picked “The Death of Relationship” as the subject is to get readers’ attention. Exaggeration is just a way of marketing. Same applies to other book titles like “Customer Satisfaction is Worthless, Customer Loyalty is Priceless,” “The World is Flat,” “God Is Not Great.”
Measurement and management are not always be causually related, but they are related. How do you know how well you perform if you don’t measure your performance? Measurement can be used as a tool to identify areas for improvement. Of course, you can always rely on your gut feelings to “feel” where your problems are, but feelings are not hard facts.
It is not difficult to manage customer satisfaction, but it is difficult to measure customer satisfaction.
What gets measured definitely gets managed, but what doesn’t/can’t get measured of course still needs to be managed.
Daryl Choy, the founder of WisdomBoom and Touchpoint eXperience Management, helps firms make a difference at every touchpoint. Choy can be reached at wisdomboom.blogspot.com.
John
You remind me of the quote by Peter Drucker.
“Management is doing things right; leadership is doing the right things.”
Daryl Choy, the founder of WisdomBoom and Touchpoint eXperience Management, helps firms make a difference at every touchpoint. Choy can be reached at wisdomboom.blogspot.com.
Graham
In his book “What the CEO Wants You to Know,” Ram Charan mentions that successful business leaders never lose sight of the basics. What are the basics? Cash generation, return on assets (a combination of margin and velocity), and growth.
He suggests that the unviersal law of business can be written as: Return = Margin x Velocity, or R = M x V.
That is a kind of measurement.
The success of every business is measured by the return it generates as a result of effective management.
Daryl Choy, the founder of WisdomBoom and Touchpoint eXperience Management, helps firms make a difference at every touchpoint. Choy can be reached at wisdomboom.blogspot.com.
There is always a danger in focusing too tightly on any business tool use, measurement tools included. It is easy to forget, while wrpped up in the science of it all, what the business is about in the first place. Serviing the wants and needs of people must be the primary function of any business. Proceeding in any other way is a recipe for eventual company failure. Sacrificing relationship building practices to mechanical efficiency is what causes the ridiculous situations Graham referred to earlier in the discussion. All companies and institutions that enbrace the “science” of business to the exclusion on its “art” risk similar ignominious fates.
Managing relationships is a human activity essential to our long term emotional health and prosperity. As such it is no less important to a business regardless of the lack of hard data to consider when evaluating those activities. Business is first and formost a human activity. When you lose sight of that you risk losing it all. You wouldn’t let your hammer run your construction company. Your various busines analytics don’t deserve that honour either. Numbers are important, of course, but only as a better way to serve people. Lacking useful measurement tools there is only human experience and judgement. These are no less valuable for their lack of precision. They are, in fact what separate the major players from the wanna be’s.