Metrics For Measuring CRM ROI
Measuring your CRM ROI (return on investment) doesn’t need to be difficult, but it should be something you do to ensure you are using the right CRM tools. Depending on your specific needs, there are several metrics that when tracked give you data that will assist in determining if the investment is paying dividends to your business. Some of these metrics are listed below.
Customer Acquisition Cost and Value
The cost to acquire a new customer is an important stat to know. The more it costs, the lower your profit. However, that isn’t entirely static. Individual customers bring different values to your business, but when you know what they are worth, you can make better decisions based on their value.
Lead Source
The sources that produce leads are also important. Knowing which channels are performing best can aid you in how you market through them. It also helps you to target your marketing to improve the results of channels that are not performing as well as others.
Net New Revenue
You want to prove that you are reaching and selling to new customers since you implemented CRM tools. You also want to be able to track how well new pricing models are performing and which channels are producing results with these tasks. Essentially, if you have data to support both, it means you are now serving part of the market you weren’t before.
Number of Deals Closed
If leads that are coming from new marketing programs are being converted into customers, that is to say more deals are closing since you added CRM tools, your sales total should be increasing. If not, something is not clicking right.
Sales Administrative Time
There is a delicate balance for your sales team. They need to stop spending as much time on administrative tasks as they are selling to new prospects. If that shifts to more time on conversions and less on paperwork, the cost of your sales should decline pushing the profit of each sale up.
Sales Volume
Once you have added a CRM system to your business operations, you should see increases in a few of these metrics including the number of sales closed monthly, quarterly, and annually. Plus, the dollar amount of each sale should be trending upward.
Time Per Sale
Conversions should be happening quicker with a CRM system. When this happens, it allows you to put more into your sales pipeline which will increase sales volume.
Upsell Rate
Finally, if you are selling more add-ons to your customers, you will see interesting data. That is because it has been proven that selling to existing customers costs you less than selling to new customers. This makes upselling a profitable tactic to adopt.
How Much ROI Should You Expect From CRM?
The average conversion rate increase with CRM is 300 percent. The average increase in revenue is 29 percent. Sales team productivity increases on average by 34 percent. Naturally, your results will be different as will the results of any other business that installs a CRM system. However, the bottom line is that there is a positive ROI to CRM which builds your business.
Ideally, you should be looking at CRM tools as a means to track all customer activity and interaction with your company. It will give you the data you need to make wise decisions on various aspects of your business. Without a CRM system, your business may still grow and return a profit but with CRM, that growth and profit will be greater.
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Conclusion
Operating a small or medium-sized business is challenging enough in today’s competitive marketplace. Sometimes you need an edge to help your business get to the next level and turn a greater profit. CRM, or Customer Relationship Management, is one such tool that generates the kind of data you need to help your customers get what they want at a price that still generates a profit for you.
From increasing conversions to upselling existing customers, CRM data shows you what is working and what needs work in how your business operates. If you desire higher profits, greater productivity, and less cost associated with gaining ground within your market, you need to take a hard look at what CRM offers and how it can help your business.