CRM(Customer Relationship Management) has become an important part of enterprise digitalization and management. However, when making decisions on CRM investment, many business owners care most about what returns it can bring to the company. Although they believe CRM implementation will benefit the company, such judgement is often intuitive without solid data support. In fact, the return on investment (ROI) can be used to quantify the payback of CRM solutions. There are several metrics to assess the incremental revenue of CRM and evaluate whether the CRM system delivers value effectively.
Sales Volume as A Measure of CRM ROI
The most direct metric is to check whether the monthly, quarterly and annual sales volume and average order size have increased after adopting the CRM system. If a company observes rising sales number and order value, it indicates the CRM platform truly helps drive business growth by further understanding sales channels and boosting productivity.
Conversion Speed Reflects Effectiveness of CRM
Another important gauge is the conversion speed from leads to closed deals. If the data shows accelerated conversion rate and more potential clients move from marketing to sales stages after CRM implementation, the enhanced sales efficiency will likely translate to revenue increase.
More Time Spent on Sales Activities
Moreover, the CRM system aims to reduce time wasted on redundant administrative duties so sales teams can invest more efforts interacting with potential clients. Thus, if sales headcounts are spending remarkably more time selling rather than doing paperwork, the reduced sales cost per order will directly enhance profit margin.
New Customer Acquisition Powered by CRM
Getting familiar with customer acquisition cost is crucial as higher expenses cut into profits. However, cost-profit margin ratio is only one aspect. To comprehend the full picture, companies need to measure the lifetime value of individual and average customer. Based on detailed customer value analysis, CRM solutions help identify and sell to the right audience, acquire incremental income and penetrate previously untapped markets.
CRM Drives More Sales to Existing Customers
Finally, CRM empowers businesses to market supplementary products and services to established customers, which is much more cost-efficient than selling to new leads. The customer loyalty cultivated through CRM will further unlock enterprise value over long-term partnerships.
In summary, enterprises can leverage an array of metrics centered around revenue and productivity growth to evaluate the return on CRM investment, pinpoint areas for system enhancement and justify continual funding for greater impacts.