Calculating a Return on Investment (ROI) for a Customer Relationship Management Program (CRM) can be done using these three steps.
While many businesses realize the need for implementing a CRM program like GoldMine contact management software, they still want financial projections of the ROI (return on investment) before making the commitment. Producing this information is difficult,
but not impossible, provided the company knows a) what it is they want CRM to do for them; b) what key performance indicators (KPIs) they need to measure to determine the effectiveness; and c) an approximate financial value of each KPI.
Step #1: Determining CRM Goals
There are many reasons for a company to have a CRM system, but many companies share similar goals. Here are some typical corporate objectives for implementing CRM. What are yours?
-- Reduce lead processing time
-- Simplify and improve customer information gathering and management
-- Increase customer service satisfaction
--Decrease delivery times to customers
-- Implement a detailed follow-up system for prospective customers
Step #2: Determining what Key Perfomance Indicators (KPIs) to Measure
In each of the goals above, a company can objectively determine the success of these KPIs. With a CRM program (like GoldMine contact software) in place, these goals are measurable and achievable. For example, management should quickly be able to recognize an increase in efficiency in lead tracking and follow up. Effective products, like GoldMine contact management, allow seamless integration by using website import forms to populate new prospect records in GoldMine and scheduling alarmed phone calls to an assigned sales representative.
Step #3: Determining the Approximate Financial Value of Each KPI
This step is the hardest and often requires information gathering and creative thinking. Using our example above, let’s say the company is gathering and sharing information on leads either manually or through email instead of working with the GoldMine Contact Management CRM system’s unique web import feature.
Imagine it currently takes each company administrator one hour to effectively enter, assign and schedule a call for the new lead. If the administrator receives 5 new leads per day, the total time spent processing leads per week is 25 hours. If the company is paying $50 per hour (including benefits) for that administrator’s time, then the cost is $1,250 per week or a little over $5,000 per month. If that time could be reduced by 75%, then the total savings per year is almost $15,000. Remember that this example of streamlining the lead process does not include the lost opportunity of getting to that lead in a timely manner before they go to a competitor. That is why it is important to look at many aspects of your sales process when calculating the ROI of moving to a new or upgraded CRM solution.
Validating the use of a CRM system is easier with objectified KPIs, but assigning a financial value to others can help determine a reasonable ROI for any CRM, such as GoldMine contact management. The key, as always in implementing CRM, is for the business to have clear objectives in mind and know how to measure them appropriately.
