Case Background
After attending the Toy Fair, Bob Stetzel, Vermont Teddy Bear’s (VTB) Chief Information Officer, stated that better data integration and analytical tools would improve coordination between marketing, forecasting, and production. This would support VTB’s goal of delivering a family-focused “comfort strategy.” Business analytics at VTB aim to:
- Enhance performance by tracking key priorities
- Align operations with strategic goals
- Identify key drivers of long-term success
- Improve communication of the company’s vision and strategy
A mid-level employee in marketing, sales, or production at VTB has been asked by Bob to provide input on future IT priorities.
Strategic Value of CRM Metrics
Establishing a clear business goal and putting effort into following it can be considered the baseline of any successful business. Understandably, without proper and thorough investigation and information gathering, there will be too much ambiguity for that. In this context, customer relationship management (CRM) metrics can prove crucial for both setting priorities and monitoring performance.
Given the possible tracking scope of CRM metrics, they can be organized into business performance, user adoption, and customer perception metrics. The former metrics mainly refer to sales-based matters; user adoption metrics showcase how well employees utilize the company’s technology; the latter metrics shed light on how the business interacts with customers.
Given that Vermont Teddy Bear (VTB) currently has to operate with limited resources, it cannot pursue all metric types. From the perspective of company size, VTB represents a relatively small business. In particular, its IT department hosts only nine people; however, their level of expertise is relatively high. Consequently, user adoption metrics would not yield as useful information as the other two metric types.
Sales-based and customer-based metrics should be of higher priority. In particular, VTB has to find a quick and effective solution to its current marketing problems, which can be summarized as defining the target population and adhering to customer trends. Moreover, the overarching goal is to transform the current seasonal sales patterns into season-independent ones. Finally, there is an essential factor of platform preference, that is e-commerce. Despite VTB utilizing all channels of goods distribution, such as stores, mail, web, and telephone, it should focus more on its online components.
Recommended CRM Metrics for VTB
Sales-Based Metrics
Bearing the above evidence, VTB should track the following CRM metrics: sales per product type, sales per promotion campaign, web visits, customer effort score, net promoter score, and customer churn. The first two sales-based metrics can provide VTB clues and hints regarding the market segments and situation. VTB has three major products – plush teddy bears, pajamas, and flowers, all accompanied by customizable accessories. In this context, the sales per product type metric will inform VTB regarding the population groups most interested in the products. For instance, teddy bears and flowers are usually bought by young males as presents, whereas pajamas attract children and females. Sales per promotion campaigns conducted during the high season can also indicate customer preferences. However, its primary purpose would be to compare sales levels during the season and off-season to monitor the success of sales patterns transformation.
Web Visits and Customer Effort Score
In the meantime, monitoring the number of web visits and calculating customer effort scores will yield valuable data regarding e-commerce. The statistics surrounding the web popularity can serve as indicators for VTB’s website’s regional performance. The customer effort score is a specified metric that refers to the customer experience on the web. In particular, it indicates how user-friendly the website is by measuring the effort each customer puts into using it to obtain valuable information. Consequently, this information might provide hints and opportunities for the website’s redesign and improvements.
Net Promoter Score and Customer Churn Metrics
Lastly, net promoter score and customer churn metrics will yield general customer satisfaction level information. Net promoter score is usually obtained through a customer survey during their journey with the company, as they rate products and services on a scale from zero to ten. Meanwhile, churn metrics, referred to as customer attrition, are the rate at which the company loses customers. These two metrics will aid VTB in evaluating direct customer feedback and responding to potential problems.
The web and customer satisfaction metrics fall under the marketing area of CRM, making it possible for VTB to place them on a single digital dashboard presented in Figure 1. The general idea behind this dashboard is to provide a general overview, such as regional web popularity and net promoter score, and yield detailed information upon being clicked.
