To reach new heights, it helps to know just how high you’ve already gotten.
What’s the best way to measure and demonstrate ongoing CRM returns? We hear that question a lot from businesses that are planning to implement CRM or that already use CRM and want to detail the return on investment (ROI) it’s generating.
The ROI analysis is all about the “R.” Everyone knows how to measure the “I”–and a good 99% of businesses can handle the required division. So you want to look at the R, and my philosophy is that all CRM returns stem from these three areas: growth, efficiency and customer satisfaction.
Those three areas are key for justifying initial CRM investments. But for calculating ongoing returns, most people will want to stay away from customer experience calculations. Frankly, it’s difficult to conceptualize how to divide increased customer experience by your investment amount and come up with an integer.
9 Techniques Prove CRM Returns
Accordingly, focus on increases in growth or efficiency. Here are some of our favorite techniques for not just facilitating such increases, but also for measuring them:
1) Shorter Calls: Pretend, like one of our customers, that you’re a major discount brokerage with 600 salespeople who field incoming calls from clients wanting to execute trades. Say it now takes seven minutes–on average–to field each call. For every second you shave off of that time, based on salespeople’s salaries, you’ll save up to $300,000 per year, allowing you to reduce headcount via attrition, or improve productivity by 10%.
2) Better Leads: Many of Cloud Sherpas’ customers have turned to us to find better ways of making sales use the leads delivered by their marketing program, as well as to make these marketing-provided leads a higher quality. Most research shows that the quicker you can follow up on leads, the higher the conversion rate. By measuring lead acceptance by sales, follow-up speed with customer, and actually increasing the speed of both, you should see a demonstrable, measurable impact on your lead-conversion rate.
3) More Deals Closed: Every business wants its CRM system to drive a higher number of closed deals. Measure that.
4) Faster Sales Steps: Also measure the intermediary steps that lead to closed deals, such as the ratio between the number of leads generated, requests for proposal received and the ratio of proposals made to deals closed. Measure related timing too, because if you can handle leads more quickly, or generate more proposals–for example, by adding automated pricing and quoting capabilities and refining your relationship management techniques–sales volume will rise.
5) Automatic Reports: Is the–or can the–CRM system automatically generate reports for your salespeople and sales managers? Many of our customers–including ABN AMRO–tell us that sales reps spend up to one-third of their time on planning and administrative-related activities. If you could reduce that time by even 5%, thus buying salespeople more time to sell; what would that be worth to you?
6) Cross-Selling: From an efficiency standpoint, one of the top metrics our customers measure is cross-selling. Many of our financial services customers, for example, have put in place tools that prompt a salesperson to recommend additional products or services that a customer might benefit from. Because, while the salesperson could manually review the customer’s current products and demographics and generate that proposal, why isn’t your CRM application already doing that for you?
7) Future Selling: Another customer, which makes chemical products that help extract natural resources, keeps an eye on its customers’ extraction products and then automatically recommends–in a timely manner–additional products that they’ll likely require to help with more advanced stages of extraction.
8) Retaining Employees: Consider employee retention too. Many people think that implementing the right sales tools and techniques–SFA included–helps you retain employees. If a company replaces a salesperson, on average, every three years, that’s expensive–in terms of getting them up to speed and trained, while trying to prevent customers from becoming dissatisfied. Accordingly, a good, modern CRM system (not Siebel) will help you retain salespeople, as well as better measure sales, employee retention and how that changes that to using the new system.
9) Faster Training: One of our pharmaceutical customers, once it lands FDA approval for a new drug, must hire and train salespeople as quickly as possible to begin marketing the drug and maximizing returns before the patent window expires. Interestingly, the company has measured the difference in time it takes to train people on its new, modern CRM system versus its former system, which sported a circa-1999 Siebel interface. Does it matter if training requires two days, instead of three? If salespeople are making $110,000 per year and working 220 days, and you have 1,000 salespeople, then you’ve just saved $500,000 and more than paid for your CRM project.
Cloud Sherpas is one of the world’s leading cloud services brokerages and helps businesses maximize their CRM returns by identifying desired business goals, finding the right tools and technology for the job, and delivering rapid implementations that remain focused on achieving your desired business capabilities.