CRM ROI or getting your moneys worth from your software
Implementing a Customer Relationship Management (CRM) system is a cost to your company from a financial & time point of view. It is important to ensure that you get a return on your investment.
Cost of a CRM system
Investing in a CRM will cost you a lot more than the headline figure quoted on a CRM Vendors website.
For a CRM system to be successfully implemented in your company you will need to address the following
- Training of your staff
- Change management
- Implementation plan
- Time spent learning how to best use the software
- Ongoing Support for your staff
So, taken that there is a significant cost in implementing a CRM system across your company it is important that you measure the returns you gain from the system.
It is also important that you choose the best company to help you implement the CRM.
Measuring Return on Investment
In order to measure the return, the first thing to identify is what you want to measure. This should go back to the reason you decided to buy the CRM software in the first place. The reason will vary between companies. as there is no one reason a company should implement a CRM system.
Every CRM will provide you with the ability to manage a database of your clients. You could argue that a spreadsheet will do the same !
Here are some of the reasons that companies buy CRM systems:
- Improved Sales & Pipeline Management
- Improved Customer Service
- Marketing to your customer base
- Self Service for your clients
- Social media monitoring
- Employee performance management
- Different combinations of all of the above.
Once you examined all the reasons you are buying a CRM system you should go through the following 3 steps.
Step 1. Define the primary reason or reasons you are buying a CRM system
Step 2. Establish your current baseline for Sales, Employee performance etc. Try to quantify some of your existing time & costs so you can compare them. For example did it take you two hours a week to compile the Sales Pipeline report.
Step 3. Identify the improvements you wish to achieve after 6 months, 12 months and each year thereafter.
A methodical approach along these lines will establish the business logic for implementing a CRM system and will greatly improve the chances of you achieving a real return on your CRM investment.
Measure the Output, not the Input
CRM systems give you more reports than you will normally need. It is very easy to measure all the input and work from employees and some companies get bogged down in this kind of measurement.
Take sales for example, Sales managers might look to reports to see how many calls have been made, how many meetings have been held, how many proposals have been sent out etc. etc.
The only real measurement here are sales. How many are being made, What is the value, are targets being met.
Take Customer Service. The input could be the number of customer care calls made by your staff. However the output could simply be the reduction in the number of complaints received.
Measurement of the input from your employees measures how efficient they are.
Measurement of the output from your employees measures how effective they are.