Making informed sales and marketing decisions has to be a crucial aspect of a business success, regardless of your industry, product, or service. When you have all the tracking details about your potential and current customers, that is the only way you can make intensively informed and highly effective decisions. The irony is, that this data is typically not easily available as it has to be collected from different places such as emails, spreadsheets, and databases. This makes it challenging to gain a comprehensive view of a customer’s journey and manage interactions effectively.
So, what’s the solution? Most businesses have found their solution in Customer Relationship Management or CRM software. A CRM solution provides a much more comprehensive solution where data is concerned. However, if you cannot measure the return value of your CRM and are not aware of the ways you can increase the ROI from it, then your business might be losing some revenue.
In this article, we are going to discuss how you can measure your CRM revenue and how certain steps can lead you to ultimate CRM success. So, here we go.
How Much Can a CRM Boost Revenue?
A CRM helps aggregate and connect customer data, enhancing internal team collaboration and ultimately improving the customer experience. To ensure you get the most value from your CRM investment and fully leverage its capabilities, here are some tips for optimizing your CRM usage, regardless of the provider.
The strategic implementation of a customer relationship management (CRM) system provides SMEs with a structured, transformative solution to their challenges. When deployed effectively, a CRM enhances lead management, automates workflows, boosts marketing efficiency, promotes sales transparency, and ultimately improves overall sales performance. This allows sales teams to focus more on selling and less on administrative tasks.
What is the ROI of CRM and How to Iterate It?
CRM ROI is a metric that assesses the financial performance and effectiveness of a CRM system compared to the costs invested. In essence, CRM ROI reveals the overall impact of the CRM on your business. In short, CRM ROI (Return on Investment) measures the profitability of a CRM investment.
It’s calculated by comparing the revenue generated by the CRM to its cost. A positive ROI, ideally greater than 100%, indicates a profitable investment. However, the specific ROI calculation depends on the revenue and cost figures included. To estimate potential revenue, you’ll need to consider relevant metrics and factors that the CRM will impact.
The formula to calculate CRM ROI is:
CRM ROI = (Net Gain – Cost of CRM Investment/Cost of CRM Investment)×100
Now, there are 2 major parameters you would be coming across for this formula.
Here are they:
• Net Gain – This variable is simply the benefits you get by using CRM software. It depends on certain factors such as happy customers, improved efficiency, and increased sales.
• Cost of Investment – It concerns the total investment made on the software including the expense of the software, hardware, implementation, and training resources. There are 2 types of costs involved here – direct costs and indirect costs. Consultant fees, software licenses, and hardware purchases come with direct costs, whereas indirect costs involve data migration costs, training expenses, and ongoing maintenance.
• CRM ROI – Finally, your ROI will tell you the results of your CRM implementation. If it is a positive ROI, then your CRM is working fine with your business. And, if it is negative then you need to rethink about your entire CRM ecosystem.
Effective CRM implementation is a crucial factor in maximizing your ROI for CRM. The idea for such software is very simple – the more you use it, the greater are your returns, while lesser usage of the same software will lead to diminished ROIs. Even if you go for a CRM for lead management that is expensive but has no proper utilization, you may encounter less or sometimes even negative returns. It also depends on your sales and marketing teams on how they are using the solution.
Some sales professionals are still going with spreadsheets over CRMs, which only leads to a negative ROI. Further, it also produces scattered data and low collaborations. This prevents your business from attaining its full potential. The goal isn’t just getting your sales reps to use the CRM—it’s about ensuring every employee uses it practically and effectively to unlock its true value.
Some tips and tricks that will help you maximize your returns from CRM investments, and they are:
1. Involve Your Team in Decision-Making
To ensure your customer service, marketing, and sales teams use the customer management tool effectively and maximize ROI, it’s essential to involve them in key decisions. Without their input, you won’t get their full commitment.
Encourage open dialogue about their genuine thoughts and concerns. While not everyone needs to agree or be completely satisfied with the decision, it’s crucial they have the opportunity to voice their opinions and feel heard.
2. Select the Right CRM and Onboard Your Team Effectively
There have to be some inevitable challenges that your business may encounter with the transition of the new system. There are certain rules if followed can help you face the challenges and maximize your CRM returns. Here are they:
A tailored training plan specific to your business and team,
• A kick-off call to start with,
• Multiple training sessions are scheduled within the first few days of CRM implementation,
• One-on-one training with an Onboarding Manager,
• Assistance with data analysis and import, and
• Three custom automation/task templates tailored to your needs.
3. Incentivize Engagement and Set Clear Expectations
Your CRM is the fundamental point of every interaction with your customers. So, to fully maximize your returns, you need to ensure that the software is consistently and meticulously used.
Achieving this requires implementing both incentives and consequences.
Offer meaningful incentives to your sales representatives, such as bonuses, gift cards, certificates, or recognition. Conversely, consider implementing consequences, like reduced or zero commissions, for your sales team members who do not consistently use the CRM in their day-to-day work.
Conclusion
CRM software is a highly robust tool that has the ability to elevate your business by streamlining the sales pipeline and boosting revenue growth. With proper implementation, achieving a positive ROI is entirely feasible. With all-in-one CRM ConvergeHub, you may not need to worry about its successful implementation or the returns of the investment.
