Measurement Made Simple

Analyzing data isn’t really that difficult. Customer-focus strategists, database management consultants, customer relationship management (CRM) integrators, and data modelers have managed to complicate this function a bit, but that’s just because they don’t have the benefit of the teachings of my seventh-grade boys’ gym teacher. That’s right. Mr. Troutman could teach us all a thing or two about analyzing data, and he could do it while making a sweet hook shot.

Mr. Troutman was jocular and athletic, just the way a gym teacher is expected to be. He was also the smartest teacher in the bunch. That’s because Mr. Troutman (whose first name I’m sure I never knew) did one thing better than any other instructor, on or off the field. He measured well.

In fact, it seems in retrospect that measuring was all that Mr. Troutman ever did. Every day, he’d stand in a white polo shirt and red shorts, with a stopwatch clasped in hand, and measure. He’d measure how long it took us to complete a mile-long run. Or how fast we jumped, or how far, or how high. Sometimes he measured how many times we did something. Sometimes he measured how many times we didn’t do something.

Mr. Troutman’s true genius as a teacher was his singular grading system. Mr. Troutman — the expert measurer — graded his students by only one metric: improvement. If you ran a mile in 12 minutes the first time you ran for him, from then on you could get only one of two possible grades on future runs — either an A or an F. If you beat your last time, you got the A. If you didn’t, you got the F.

Mr. Troutman’s grading system may seem overly simplistic. It was. It was also incredibly effective. Every student came out of that class running a mile much faster than he had ever thought possible. Even those who thought they’d beat the system by improving only a few seconds each time were much faster at the end than they were at the beginning. Mr. Troutman measured the right thing, and he got results.

Is your data analysis system as good as Mr. Troutman’s? The simple truth is that the complexity of analytics projects is often made to serve interests other than profitability. Too often, marketing managers are led down a path toward sophisticated modeling and instant decision-making. Mr. Troutman might recommend simplification. Measure the right thing. Use common sense.

As the CEO of a CRM software company and a confessed math junkie, I must admit that at times I, too, have been swayed by the enabling possibilities of advanced CRM tools. I have been romanced by instantaneous customer satisfaction, rapid processing, advanced microsegmentation, and real-time analytics. I have been carried away by fast math.

But as the economic environment has shifted, I have come to realize, as many have, the dangers of complexity. We live in difficult times for the data analytics and CRM industries. Gone are the days when Fortune 500 companies announced bold new CRM initiatives daily. The funds for those initiatives are now being spent elsewhere. Companies that made their fortunes by selling real-time customer analysis software and services are now losing those fortunes.

To emerge from this stark environment, our industry will need more than the latest shipment of the next-generation software platform. It will need to return to basics. Over the next few months and years, CRM and customer analytics managers will be required to justify every expenditure as never before and will live under the shortest of investment horizons. Complexity is no longer our friend.

With all the tools out there but with resources shrinking, how is a marketing manager to survive? Instead of implementing the complex solution, just try to keep it simple. Use common sense. If Mr. Troutman were here, he’d know exactly what to do.