All companies consider their bottom line and are all worried about their overhead expenses. If your operating expenses cut into profits, it doesn’t matter how much money you’re making.
Think about it: if you’re raising $20,000 in sales, but your overhead expenses cost you $19,000 for software and employees, then you’re just making $1,000 in profit.
So how can CRM ROI be measured?
Measuring CRM ROI
Without any historical data, it can be challenging to calculate the CRM ROI.
You need to consider the program’s expense, training costs, maintenance costs, device migration costs, and the time it takes for your development team to get it up and run to calculate the CRM ROI.
You need to look at how it saves your time upgrading the system to measure how your performance has improved. You should look at improvements in revenue, better consumer satisfaction, and a better understanding of marketing campaigns.
By comparing your performance metrics and overhead costs from before you implemented the CRM and after, you would be able to see if you get a good ROI from your CRM. You can find a spreadsheet here and a web tool here to help you calculate your CRM ROI.
Features that can improve CRM ROI
If you are trying to get a higher ROI from CRM, you may want to consider a multi-purpose CRM solution that includes other features like accounting and project management. You will be able to minimize the costs of different solutions and increase productivity even more by managing every aspect of your organization from a single location.
CRM is so beneficial because it can be readily extended to any organization and used in any part of that company. One of the reasons for this is that good CRM services understand how daunting tasks can be within an organization and create their applications to be as user-friendly and successful as possible.
The return on investment (ROI) calculation is used frequently in business. Marketers use ROI to benchmark the effectiveness of their advertising placements. A $10,000 digital advertising campaign that yields 20 new customers and $25,000 of recurring annual revenue, for example, has a favorable return on investment.
The basic formula for calculating ROI is not overly complicated. Simply divide your net profit by the total investment, multiply by 100, and you have your number:
ROI = net profit / total investment * 100
But it is not as simple as a one-time promotional campaign to estimate ROI for a business model, such as a CRM.
Let’s start with a perspective
It is a new expense that requires a bit of adjustment to go from no CRM to a paid monthly (or annual) subscription.
After all, your company has been successful without a CRM up to this stage. Will the upfront and continuing investment be worth the new expense? How long before your investment is recovered?
Wouldn’t the money be better spent on paid promotion, freelance jobs, or anything that affects results more immediately?
You must have the right viewpoint to address questions like these. Go back and review your initial inspiration for a CRM consideration. Most possibly, you were looking for technology to help you grow faster and smarter.
Let’s take a closer look at each of these.
A CRM can’t get you to make cold calls. It is unable to source and recruit new talent for sales. Unable to close deals. So, how does a CRM add to the growth of the top line?
In short, a CRM maximizes the effect of the processes and structures of your sales by:
Freeing up sales reps to sell more
Sales reps don’t want to waste time fumbling and fighting about lead assignments with spreadsheets or subpar CRM systems. They’re going to sell. Lead management, automation of workflow, and license rules make sales reps more efficient and less distracted. Based members of sales find more time for prospecting, resulting in a healthy pipeline.
Providing transparency into what’s working
Your sales team is doing its best. Nobody questions it. However, apart from their personal stories, how can you understand which acts and team members lead to your success? It’s hard to track and calculate success without a CRM.
To improve the transparency and accountability of your sales activities, CRMs are created. For assessing success or failure, pipeline visibility dashboards missed contract reporting, and sales rep efficiency reports offer actionable data-driven insights.
Aligning sales and marketing
In today’s virtual world, sales and marketing teams frequently operate in isolation from each other. Marketing focuses on developing content and producing MQLs, while a pipeline is designed for sales. In principle, this sounds fantastic, but, in fact, due to target misalignment, it rarely works.
The gap between sales and marketing is bridged by CRM technology. Marketers gain insights to consider what leads to paying clients being converted.
The status of critical marketing campaigns and lead flow is more apparent to sales reps. All of this produces a virtuous circle that, ideally, leads to increased cooperation between two essential departments and collaboration.
Increasing the value of your data
Data can be one of the most valuable company tools for revenue-generating teams when adequately organized. However, it is impossible to completely manage data unstructured and distributed through countless inboxes, spreadsheets, and disintegrated business structures. A CRM provides a system and makes it simpler to detect and avoid insufficient data.
Implementing a CRM can also create numerous cost-saving opportunities. Here are a few basic possibilities:
System overlap reduction
CRM vendors are actively designing new features that suit their clients’ evolving needs. CRMs support a range of use cases, from integrated marketing automation to project management to interaction enrichment, allowing organizations to simplify their technology stacks and reduce competing software costs.
Automated workflows provide infinite possibilities for monthly expenses to be minimized. For instance, does it make sense if your CRM can handle most of the job, to have a freelancer spend 20 hours per month on record management? When reassigned to higher impact operations, wouldn’t the freelancer produce more value? When you choose a flexible, customizable CRM, you can set up workflow automation at a level that makes sense for your team and business.
The ROI on a CRM is hard to determine, but it’s essential to take steps to make sense of the information you hold. As data becomes more critical, having a clear view of the data you hold will give you a competitive advantage.