Catching up on some of my HBS Working Knowledge newsletter reading, I found an interesting Q&A with Professor Gail McGovern. She discusses some of the major changes in marketing strategy in the past decade, particularly CRM. Particularly salient is this point:
“Indeed, popular metrics such as customer satisfaction, acquisition, and retention have turned out to be very poor indicators of customers’ true perceptions or the success of marketing activities. Often, they’re downright misleading. High overall customer satisfaction scores, for example, often mask narrow but important pain points—areas of major dissatisfaction—such as unhappiness with poor customer service or long wait times.”
She then goes on to promote the executive dashboard – a concept that seems to be all the rage lately. When our team evaluated software vendors at the Museum, the inclusion of a comprehensive yet user-friendly dashboard giving an overview of the Museum’s current business position was a key component. Of course, as with any data-driven tool, a dashboard is only as good as the data included (i.e. the old programming mantra, “garbage in, garbage out.”). Knowing which measures are important as actual business drivers and which measures are merely distractions is obviously the key. The best way to figure this out seems to be the key lesson that was hammered into my team as we defeated the competition in our Marketing Strategy simulation in business school: listen to your customers.