“Companies often do not know what good relationships should look like, how to form them, or how to measure them. Little wonder, then, that customer relationship management (CRM) initiatives often fail to deliver the desired returns on investment.”Ivey Business Journal
The right information too late is useless, a fundamental reason why CRM software has assumed mandatory positions in large corporations over the last 20 years, and why small businesses continue to adopt it at ever increasing rates.
CRM software loosely holds the promise of company-wide reporting to keep managers at every level informed about sales performance and what steps need to be taken to keep and win customers. However, in practice this ideal is often not met, or in reality is only available in very expensive or esoteric configurations like Salesforce.com or SAP software.
Even then, larger enterprises are struggling to implement and maintain CRMs that give both sales leaders and the sale force accurate, clear information about the vitality and heath of their customers at an individual or aggregate level.
Partly as a result, academics like Robert Kaplan (Harvard Business School) and David Norton introduced the famous Balanced Scorecard concept in the early 1990s that sought to balance financial metrics with non-financial measures, including customer satisfaction, to provide a strategic approach to organizational performance.
It’s estimated that nearly half of major companies in Europe, United States and Asia are using these strategic concepts to train management teams and direct sales staff. The Balanced Scorecard has arguably had an enormous impact on CRM analytics, but mostly at the enterprise level, largely keeping it out of reach for cash-strapped businesses or startups with lean budgets and agile computing requirements.
That is, until now.
Patrick McCarthy the founder of GetScorecard recognized that in order for SMB sales leaders to act quickly, decisively and effectively, its CRM reporting system had to get the right information to the right people at the right time. Additionally, it had to be done in a clear and efficient manner, all in real time.
Using some of the core tenants of the Balanced Scorecard approach developed by Kaplan and Norton, he developed CRM software that allowed a sales manager to activate performance metrics based on a simple company scorecard.
In particular, this manifested itself in a graded automatic Health Score for a customer, that for the fist time allows a sales team to instantly gauge how likely they were to retain a customer, win a customer, or convert him into an opportunity in the deal pipeline.
This score is an automatic assignment based on a variety of business rules or triggers, including but not limited to:
• The value of assigned Note (e.g. Commendation, Complaint)
• A Net Promoter Score (1-10)
• A timeframe indicating how long there has been no email or phone correspondence with an existing customer.
The GetScoreCard development team went further and implemented an auto-tasking feature, which allows a sales manager to set up automated follow-up instructions to sales teams based on the value of the Health Score.
For instance, if a customer has issued a recent complaint and not been contacted in the last 7 days, his Health Score may automatically drop from 100% to 30% while simultaneously a task is created for the sales person in the correct territory to immediately call the customer and offer him a 10% discount on his next renewal.
Additionally, the sales manager may use these health scores to direct sales meetings and detect organizational issues that are affecting current and future sales.
Overall, the Health Score represents a massive concentration of academic research and industry experimentation (based on many of the original tenants put forward in the Balanced Scorecard) into a single performance metric that offers the sales leader and sales force a real-time insight into the loyalty and satisfaction index of a particular customer in real-time.
This gives small businesses a huge advantage over their competitors as they strive to increase productivity and customer satisfaction.