In my previous column, we described key performance indicators (KPIs) and their important dimensions of perspective, family, category and focus in some detail. This month, we will build on that discussion by translating these dimensions into a comprehensive KPI profiler that can be used to build, quantify and communicate KPIs throughout your organization. Incorporation of the KPI profiler in the KPI development process also ensures that a proper balance of metrics is selected that includes the four balanced scorecard perspectives (customer, financial, internal business process and learning/technology), multiple families of measures (cost savings, productivity, quality, profitability, etc.) and an appropriate mix of lead/lag indicators, internal/external views and qualitative/quantitative measures. The KPI profiler also captures information related to the data sources, benchmarks, targets and business initiatives.

In recent years, customer relationship management (CRM) has emerged as an important business strategy. Although myriad sophisticated CRM definitions purvey the marketplace, CRM is really just about value creation - the value creation that results from acquiring, maintaining and servicing highly profitable customers. The premise is very basic: sell existing products to new customers (new acquisitions), sell additional products to existing customers (cross-sell), sell more expensive products to existing customers (up-sell) and maintain your existing customer base (customer retention) while economizing support activities (customer service). All the other business processes (campaign management, sales force automation, etc.) and IT ecosystems (data marts/data warehouses, data mining, etc.) just facilitate the value creation paradigm.

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