With so many CRM products available, and prices from “FREE” to “Really Expensive”, why do so many CRM projects fail to show a Return on Investment (ROI)? Unless you are clear on how they will repay your time effort and investment, they will end up costing more than they deliver. Even “FREE” CRM tools have a cost of operation. The key, therefore, is to identify up front what measures you will need to assess ROI. I have identified 3 broad areas where you could look to measure the ROI of your CRM project.
Cost of data entry vs. cost of data access
CRM systems can provide a single version of the truth. One place to go where you can access timely, relevant and accurate data about the client. Bringing data together and providing access to your users is often seen as a benefit of the CRM system.
Data acquisition, integration and management have associated costs – so it’s important that you are clear about the situation before and after CRM.
- How much time is currently spent in finding and accessing data?
- What are the costs associated with updating data in multiple systems?
- What are the costs of inaccurate data?
- What customer activities cannot be accomplished due to a lack of data – and what is the cost in terms of lost sales?
- What time has been saved when accessing each item of customer data required to perform a specific task?
- What data-updating tasks have been eliminated – and how much time has this saved you?
- What new sales opportunities have been created through access to data?
- What is the value of sales for clients previously identified as “at risk”, who are still trading with us?
Time it takes for sales people to be “fully productive”
CRM is not just about data. The best CRM systems help to implement business processes across your organisation. Well implemented systems will guide your sales teams to focus on the right sales opportunities and provide them with tools to improve close rates.
- How long does it take for a new sales person to hit their target? How much does this represent in their salary and other employment costs?
- How many clients reduce spend following a change in account manager? What is the value of lost business?
- How long does it take to roll out a new sales process? What are the costs of implementing a new sales process?
- Can a new sales person hit their target in less time than before? What is the saving?
- What are the savings in client churn over a 12 month period?
- What are the savings and increases in sales associated with rolling out a new sales process?
Growth attributable to CRM
Just tinkering at the edges of your business will rarely make the kind so changes that truly excite. So while it’s great to get costs under control and realise savings wherever possible, it is the ability of CRM systems to drive growth that we should focus on.
Can CRM become the engine for growth in your business? Assuming that means either finding new customers or selling more to existing customers, then the answer is “YES!” Only by keeping a careful eye on the before and after can you demonstrate ROI.
- What are the costs associated with launching a new product or service to your existing clients?
- What percentage of clients take more than one product or service from you?
- How much was saved by having a single, accessible, accurate and well profiled database of clients to which to launch new products too?
- What increases in cross sell and upsell can be attributed to the CRM system?
Demonstrating ROI is essential if you are to secure the right budget for your CRM initiatives. Whether it’s a new project or ongoing improvements to an existing system, being able to present the ROI case is the key to success. If you would like to discuss ROI measurement tools or our experience in presenting the ROI case for CRM, then please do get in touch.