You *can* manage what you don't measure

Akin, a thought-provoking post. I certainly agree with you that analytics can help companies compete better and ultimately differentiate themselves. Tesco in the UK/Europe, and Best Buy in the USA are great illustrations that customer insight gained through analytics can help retailers run better campaigns, stock more of the right items at each store, etc.

Analytics can be a leadership tool to engage better with customers, but based on my current research on customer-centric business practices, I'm skeptical that many companies actually do so. Instead, they collect ever increasing amounts of information, but don't gain the right insights or don't apply insight to the right problems.

Maybe it's time to update that old adage: "You can't manage what you don't measure." I see plenty of management going on with limited measurement or faulty data. Managers will manage with what they have, or know how to use, even if it's just seat-of-the-pants intuition.

Instead, the adage should read: "You can't succeed unless you measure the right things and do something about what you learn." That seems to be a differentiating factor for industry leaders.

Bob Thompson, CustomerThink Corp.
Blog: Unconventional Wisdom

You can't succeed unless you measure the right things and act

Well said Bob! Thank you for that refined thought.

Let me try to take the idea for a spin by translating it for some of the areas of marketing that I am involved with:

1. Web analysts would totally understand that perspective because their best practice is to start by picking the right key performance indicators for their web sites. Then they are to measure and do something about the results, namely experiment with changes to site/ads and keep the winners.

Pick too many KPIs and you drown in data. Don't act ... and you never go anywhere.

2. Direct marketers would also agree. Among the many analytics they run they would for example mesure response to their campaigns. A key technique is called "matchback" for instance. Here you match up transactions coming from the POS vs. the marketing contact history. If Akin bought blue shoes and Akin had received an email or catalog on blue shoes a week earlier then the campaign probably deserves some credit.

Though, what if Akin was going to buy shoes anyway? If you measure matchback without control groups where you don't send the email/catalog you are still measuring the wrong thing: You cannot separate cause from mere correlation and will likely make bad marketing decisions.

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Fine, but the authors Davenport and Harris would still criticize this comment. They would likely say that these thoughts are fine on a channel-specific, tactical, ROI improvement basis. But they are hardly the basis of competing on analytics. Instead, web analyst and direct marketer ought to pick things to measure that support the overall business's goals, e.g. to become the #1 in market share for product category XYZ. They would say: You are not going to become #1 in that category unless you measure progress and work towards it.

Really Competing on Analytics

Akin

Congratulations on one of the best posts in ages. It really makes you stop and think. In a Gaussian world of business writing, your piece stands out head and shoulders above the rest.

CRM and its recent offspring seem to be stuck in a fluffy, utopian vision of motivated staff, of functioning CRM technology, of delighted customers, and of record-breaking satisfaction, loyalty and profits. Some business writers make it all sound so easy, I wonder whether I am going to be an unemployed CRM consultant next year! But the dystopian reality is so starkly different that we seem almost to be in denial; as if not thinking about the real problems we face everyday making CRM work will make them go away, so we can return to sipping gin in customer nirvana.

For many of us on the shopfloor of CRM, reality is a shortage of customer-facing staff that we would wish to empower, of CRM systems that don't have all the information required and that don't support staff in how they want to work, of unreasonably difficult customers who don't deserve any service at all and of a stuggle to deliver a customer experience that turns a profit, let alone one that develops a competitive advantage.

Why the big difference? There are many causes, but a large part of the blame falls on the unanlaytical approach taken to CRM by the majority of managers, consultants and business writers. Managers do the projects that make political sense to their career progression, safe in the knowledge that their successors will have to pick up the pieces. Consultants sell CRM technology with the promise that it will be delivering satisfied, profitable customers in 90 days, safe in the knowledge that old organisations plus new technology create expensive old organisations that will need further 'consultancy support' to make things right. And business writers peddle the same old 'customer is king' fables about CRM that make perfect sense on paper, safe in the knowledge that they will never ever have to make them work on the ground.

'A little bit of knowledge is a dangerous thing' as the old saying goes. How true. The inadequate emphasis on analytically-driven CRM has destroyed countless value for shareholders, customers and other stakeholders. It is time for a change. It is time to really compete on analytics.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

time for a change to really compete on analytics

Thank you Graham! That kind of feedback and insight from the shopfloor level is much too rarely heard. All kudos for these inspiring thoughts go to Davenport and Harris though, the authors of the book.

Jim Sterne (the godfather of web analytics and an author on this forum) recently invited Davenport to deliver the keynote for his emetrics conference for online marketing optimization. I very much wish I had heard what Davenport had to say to that audience. After all, the biggest difficulty remains to elevate the use of analytics beyond tactical ideas to really strategic ones. I'd like to see a sequel to their work there.

It is obvious that you have much more frontlines experiences to share than what would fit in a blog post. Hope to catch a presentation of yours at an industry conference one day soon.
Akin

Dare, Success is after the fright

March Beyond "Can't Manage What You Don't Measure"
Akin.
We always learn daily. I thank you for the forward march the way you describe. That may be the way the PepsiCo advertises, “Dare”.
I thank you
Firozali A. Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salaam
Tanzania
East Africa

Righto

Does "can't manage what you don't measure" really matter?

Bob says it right, instead of proving whether the adage is still valid, it is more important to know how and what to measure and manage right.

Daryl Choy
Make Little Things Count
wisdomboom.blogspot.com