There is often a disconnect between a company’s perception of value and the actual value of a CRM system. It can be difficult to determine the ROI from using CRM software since CRM does not lend itself to easy quantification. When calculating ROI for CRM solutions, what factors should be considered?
CRM in a nutshell
CRM ROI = Gain from investment in CRM – the cost of investment in CRM ÷ cost of investment in CRM
It is essential to divide the gain from an investment by the cost. A method of assigning value to each defined objective is required to understand your ROI. Using this method will give you a better understanding of whether your CRM software meets your needs.
What is the ROI of CRM implementation?
According to research, CRM systems return around $8.71 for every $1 invested. When you compare the initial cost, maintenance costs, training costs, and resources for development with the increase in productivity, performance, and sales, you can see the benefit for yourself. We’ll now look at how to calculate CRM return on investment based on different factors.
CRM ROI Measuring Tips
When comparing pre-CRM implementation with post-CRM implementation, the following factors should be considered:
- Revenues as a whole
- Per-lead revenue
- Lead cost
Your CRM ROI formula can be based on certain factors:
- Conversion rate increases
A CRM system’s success is determined by its conversion rate. Revenue can be increased by hundreds of thousands of dollars with a mere 5-10% increase in conversions. Various communication channels can be tracked and monitored, including emails, phone calls, and online meetings. You can find out which sales channels convert best based on analytics about conversions.
- Saved amount of time
Saving time on one task means investing it in another. The CRM system can potentially save your sales reps a lot of time every day by automating multiple processes. Since it is difficult to prove what factors affect a person’s speed at which they complete a task, it is difficult to assign a number value to increased productivity.
- Per-lead revenue increased
Leads generated by CRM systems contribute to the organization’s revenue, and CRM systems help boost revenue. Using CRM, sales reps can access relevant information by segmenting their databases according to new and existing customers. Third-party integrations simplify data sync and allow you to get a comprehensive view of your leads.
- Cost of CRM
For CRM operations, you should take into account your actual budget and resources. Make sure to compare your estimate with actual expenses over a consistent period. Your ROI will be positively affected when you use any actionable intelligence you gather from your metrics to boost profitability.
- Collaborative and tracking platform for your employees
An organization can integrate business intelligence into a collaborative ecosystem when information is shared efficiently, and communication is improved. This will help team members make informed decisions. As a result of integrated task management, team managers can monitor their members’ progress more easily, which leads to increased productivity and success for their teams.