Six steps for quantifying the ROI of your CRM project
This chronicle is based on my CRM article “CRM Performance: Nothing is gained by running” published in October 2015.
The process leading up to the adoption of a CRM solution is often triggered by the need to optimize the efforts of a team, centralize information and enhance client experience. Another step in the decision-making process involves assessing the potential payoff of the chosen solution.
There are various ways of calculating the benefits associated with a CRM solution. Whatever the methodology, the return on investment (ROI) promised by various publications is always impressive.
I personally recommend the following steps to assess the return on your CRM investment:
- Identify the estimated revenue gains
- Identify the costs associated with software, professional services, change management and recurring items (subscriptions, maintenance)
- Identify non-material gains (client satisfaction, differentiation, information access, trends)
- Determine a realistic (and viable) period of time for measuring results
- Develop a status quo scenario for the same period
- Calculate the cost/benefit ratio for the CRM scenario and measure the difference against the status quo
Here are a few interesting statistics about CRM ROIs:
- According to a Baseline study, every dollar invested in a CRM project yields a return of $5.60. Nucleus Search pegs the return at $8.71.
- Also according to Nucleus Search (2012), when combined with social media and mobility, CRMs increase sales teams’ productivity by 26%.
- Aberdeen Search suggests that 84% of representatives reach their sales targets when applying a strategy, following a process and using a CRM tool.
Those are just the direct benefits. But there are others, for example:
- Fewer leads with no follow-up. These are generally moderately promising leads that should be followed-up on but aren’t. Some studies estimate a 300% increase in the conversion of “leads” into “opportunities”.
- Higher client retention rate, with as much as a 27% jump, according to some studies
- Increase in cross-sales by providing the full picture, or even suggestions of related products and services to CRM users.
- Faster sales cycle. A CRM that automates certain processes and enables an enhanced rating of opportunities also enables proactive action and a faster sales cycle, increasing the potential for revenue.
- A higher sales rate means more revenue generated by sales reps; some studies peg the increase at 41%!
Obviously, CRM users want to see a quick return on their investment. A solution that the user ecosystem can adopt and use quickly will yield dividends more rapidly than one with a longer lead-up to deployment.
Gestisoft has a potentially interesting option: its turnkey CRM quick-start solution. This solution shortens the lead-up to your return on investment while reducing the risks associated with your CRM project.
Please contact us to find out more about this offer or to discuss CRM solutions with our experts.
Click here to access the original article.