Ive found companies, especially large ones with tons ofemployees and ongoing business initiatives, love to assign metrics.But Ive never been able to jump wholeheartedly on the metricbandwagon. Metrics present a neat solution, but life rarely is thattidy.

For instance, in publishing, I easily can assign metrics to howmany articles a writer produces, but what about their quality?Thats a harder one, yet in truth, quality is at least as importantas quantity, if not more, in producing a successful publication.Readers pay attention to informative, well-produced material, notabundant junk.

For the last several years, the industry has had a razor-sharpfocus on the metric of return on investmentthe strategy was tospend in order to cut expenses and raise profitability. But doesthis equate to a successful, growing business or just one thatsaves its pennies to stay afloat?

Insurers currently seem to be contemplating this very question(see The Case Against ROI, p. 12). While this approach may have hadsome merit in recent tougher times, it appears to be getting out ofstep. The focus today is on growth, and how does a business grow?By serving its customers.

So instead of ROI, what about return on customer (ROC)? Thisconcept will be the title and focus of a book scheduled to come outin March of next year from Doubleday. The authors, Don Peppers andMartha Rogers, who have published other books and founded theirmanagement consulting firm a little more than 10 years ago, coinedthe phrase one-to-one marketing. In their most recent offering,according to the publisher, they focus on assessing customer equityand taking action in every facet of the company to increase thatequity, including technology investment.

In a column on ROC in CMO magazine, Peppers and Rogers say: Abusiness must make the most of its scarce resourcecustomersin thesame way a farmer must make the most of his scarce resourceland.Just as farmers must resist the temptation to increase profits in agiven year by foregoing conservation, so must businesses resist theshort-term temptations raised by the pending fourth quarter. Shouldthey throw out that much-needed call-center improvement, or thatbetter training module, in order to make their numbers?

You rightly may be thinking this is just another metric. But mypurpose here is not to advocate or criticize this particularmetric. Rather, Im talking about insurers thinking in terms of aquality experience for the customer, just like a quality experiencefor a reader, and the technology that will provide one. Quantifyingthat experience is a far less vital concern than delivering itthroughout the business process. Even Peppers and Rogers in theircolumn agree: Perhaps the biggest single implication has less to dowith calculating and using the metric and more to do with the typeof culture a company must cultivate if it wants to maximize ROC,rather than simply maximizing current-period profits. So, while itsan overstatement to say ROI is dead, it may be more apt forenduring profitability to say, Long live the customer.

Sharon S. Schwartzman
Editor-in-Chief