Mine Your Own Metrics
The Inside-out Approach to Successful Benchmarking

What does “cross-sell” mean for you — expanding your customers’ services to include an additional revenue stream, or adding a debit card feature to their checking account? Or when you speak of dormancy or attrition, how do you set those time windows?

Chances are the factors you deem important for success are — and should be — very different than your peers who are included in national statistics that measure your performance within “your industry.” Rather than compare your organization to like institutions that are far from your twin, consider examining the internal factors that will move the needle toward the biggest spike in your bottom line.

Stop keeping up with the Joneses
At first blush, it seems reasonable to look to the marketplace to help establish a progress chart. After all, in a capitalist society we would be remiss to wear blinders to our competition and completely ignore the findings of Six Sigma and the American Bankers Association. While these statistics merit observation, the problem with using national standards as a cardinal guideline is three-fold:

1. Analytically speaking, they’re often incorrect.

Although these generalized reports make great fodder for panel discussions at financial conventions, they do not compare apples to apples. Because larger corporations and institutions have proprietary databases with complex networks, they seldom use standardized platforms or collect data the same way.

Furthermore, industries are broadly categorized, which means the standards are generalized to a point of inaccuracy or misrepresentation. The Financial Industry, for instance, encompasses three types of Banking (retail, commercial and investment), Securities, Mortgage Lending, Insurance, Mutual Funds, Retirements and Annuities. Certainly “multiple accounts” means something entirely different to a Securities broker than it does to a mortgage lender, retail banker. It is impossible to ascribe one number that would fairly evaluate and benchmark all of these “siblings.”

2. They mask opportunities and undermine morale.
Look beyond the spreadsheet. There are less obvious clues of misguided metrics hiding in your own classifications and employee incentive programs. Take the relatively basic marketing task of growing bank card revenues: you can either increase frequency among existing accounts, or acquire new customers to spike your volume. But basing your strategy in industry benchmarks can be dangerous…

The sleepers hiding in your database. Your first step is to assess the current opportunity within your own customer base by dividing it into two groups, active and inactive members. If you have defined “active” status to mean that the cardholder has simply activated the product with a phone call, and a national standard considers three to five transactions as the baseline for an active account, chances are you will rank well above the national standard, dismissing a very large — and easy — marketing opportunity. In this case, It’s much more efficient and lucrative to focus on retention rather than acquisition.

Beware the wrath of a frustrated Frank. Common knowledge tells us that in any goal-setting process, the proposed outcomes must be both attainable and measurable. Although benchmarking of any type allows for a measurable process, the potential to achieve the goal is highly subjective, depending on many variables involved. The size and nature of a company, its organizational structure, business plan objectives, market position and financial and human resources all factor into the results.

Again the apples-to-oranges flaw raises its ugly head: Pitting the Director of Mergers, Acquisitions and Cooperative Partnerships for “Acme Private Bank” against an entire New Business Division of AG Edwards is hardly reasonable or fair. Personal performance based on such an inflated standard — regardless the incentive — will foster a dismal blanket of hopelessness rather than a healthy carrot of motivation among the accountable employees. The long-term effect of deflated morale and ill will towards leadership can be more detrimental than having no goal structure at all.

3. Mass metrics ignore the other employee: Your Customer
Let’s face it, for the mere sake of survival, the bottom-line objective for any corporate organization these days is just that: a bigger bottom line. But without customers to drive the initiatives upon which we track and report results, there would be no profit or loss to measure at all. Using irrelevant benchmarks to develop products, services and processes is akin to judging a musician based on his running speed. Listen to your customers and respond accordingly; it’s that simple.

Keeping it simple is easy at CCG
At your fingertips is a wealth of information about your business and what drives it, both inside and out. By accessing the breadth and depth CCG’s core competencies, you can identify and leverage all the talents within your organization to define the metrics that matter. Taking a customized approach to your long-term strategy, we break down the goal-setting process into tactical steps, making it possible for you to:

1. Analyze your internal information and identify the key drivers of your customer and employee satisfaction
2. Look at your specific business drivers and unique solutions
3. Establish a formal strategy that targets your audience with the products and services relevant to the significant metrics

4. Develop a creative program with tactical steps to move the needle

The best part of a CCG partnership is that we provide backend results – actual numbers instead of industry averages and generic benchmarks – that pave the way for expansion and growth by building a rolling history of s customer data.

The true yardstick is in your own backyard
By concentrating on your customers’ specific needs and your unique solutions to their problems, the evolution of loyalty and profitability will become a turnkey operation. Focus on the numbers that matter most – your own. If you’re sitting on the bench with a world of players, you may be missing the mark of your best potential!