According to Nucleus Research, every dollar spent on CRM implementation generates an $8.71 return on investment in sales revenue.
Customer Relationship Management (CRM) is a set of tools and technology to better manage all your company’s relationships and interactions with clients, and potential customers. To grow and scale your business, having a CRM solution is extremely crucial in today’s evolving business environment.
All businesses have concerns about their bottom line and overhead costs. It doesn’t matter how much money you make if your overhead costs are cutting into your profits. It’s essential to make sure that your business investments bring you an optimum ROI.
Measuring CRM Return on Investment
Without any historical data, calculating the ROI of CRM can be challenging. When calculating CRM ROI, factor in the pricing and licensing of software, training and maintenance costs, the cost of migration, and the time it takes your development team to get the system up and running.
If you want to determine whether or not your performance has improved, examine how much time it saves your team to update the system, look for improvements in sales, factor in customer satisfaction metrics and marketing campaign performance.
Compare your performance indicators and overhead costs before and after deploying the CRM to see if you’re getting a good return on your investment.
Additional Features that can Increase CRM ROI
If you want to get the most out of your CRM investment, consider a multi-purpose CRM solution that combines accounting and project management capabilities. By being able to manage all facets of your business from a single solution, you’ll be able to save a lot of money on other business applications, while also increasing productivity.
CRM system is extremely beneficial since it can be easily integrated into any business and applied to any aspect of the firm. The underlying reason is that CRM service providers know how complex business activities can be and they tailor the solution to be as user-friendly and efficient as possible.
How to calculate the ROI
The same fundamental method can be used to calculate the return on any investment. The benefits from the investment are first quantified, then the costs are subtracted, and the result is divided by the cost and multiplied by 100.
The tricky part is determining the true return on investment—after all, you may be working on other initiatives as well to enhance your company’s bottom line, such as employing new salespeople, expanding into a new market, or launching a new product line.
Taking into account multiple metrics can assist you in making informed business decisions. Consider indicators like higher sales, customer retention, and other sales productivity KPIs to measure the value of your investment. Calculate your CRM’s return on investment using the formula below:
ROI = (Net return on Investment/ Cost of Investment) * 100
What Return on Investment should Businesses expect from CRM?
A modern, robust CRM solution is an excellent tool for enhancing sales and securely managing data. The cost of a CRM typically scales with the size of your company. While there are many costs to factor in, experienced business leaders are aware that if a CRM is implemented successfully, those costs will pay for themselves many times over.
CRMs were shown to increase conversion rates by 300 percent, revenue by 29%, and sales team productivity by 34%. Actual outcomes can differ depending on the type of business, industry, and implementation stage.
Organizations that use robust CRM solutions like Microsoft Dynamics 365 CRM realize a significant increase in annual revenue, customer retention, and improved cost savings. Even the most successful sales teams can benefit significantly from a CRM’s increased efficiency, automation, collaboration, and transparency.
Top CRM Features that boost Return on Investment
While this is just a small part of what all you can achieve with a CRM solution, here are some of the top features that can help you get the most out of your investment:
- Automated order fulfillment: When a customer places an order, the CRM automatically triggers the fulfillment process, involving external vendors as well as your team.
- Customer service: There is no doubt that CRM enhances customer support and service. All the data (data from mails, chat, phone) is stored centrally at one location and is easily accessible.
- Cross-selling: Enhanced cross-selling is possible, thanks to data and customer insights.
- Upselling: CRM can detect upsell opportunities at higher service levels in addition to cross-selling features.
- Quote delivery: You can create and deliver a quote within the CRM for complex deals. If the customer wishes to make modifications or accept something, they can do so through the system.
- Web-to-lead forms: Web-to-lead forms functionality is the key to close more deals quickly. Make sure your sales staff is ready to capture and capitalize on leads as soon as they arrive.
- Automatic renewal: Don’t forget about your customers’ renewal dates. CRMs can automatically handle payments or send out invoices when it’s time to renew.
- Sales forecasting: Features like sales forecasting help you prepare for staffing and costs without going overboard.
- Customer portal: Customers can log in, examine their information, change payment methods, download contracts, request customer assistance, and place orders using a web-based customer portal.
- Commission pay management: Automated commission systems save your accounting staff and managers time. Salespeople can log in to see real-time information about their quota and upcoming commission payout. Spending less time on payroll allows you to spend more time on customers while saving money.
Non–profits can utilize the power of CRM to better organize data, manage supporter relationships, and conduct more efficient and successful fundraising in general.
Since CRMs consolidate data, all sources can share information to provide non-profits with a complete picture of their donor relationships.
In-Depth Donor Profiles
A CRM system for non–profits can track everything from donors’ names and addresses to their previous interactions with the organization.
CRM have list segmentation features in order to send meaningful and compelling communications to your donors. You can approach donors more accurately and efficiently by segmenting your constituent list.
Your CRM not only records and organizes data that you directly input but it also records and organizes data that is funnelled in from your various campaigns, emails, and contribution pages.
Modern business intelligence tools use dashboards and reports to present data in a visual, easy-to-understand format. Depending on whatever metrics you care about the most, the system will offer alternatives for configuring the layout.
You can use reports to study whatever data you choose, including:
- Donations and funds.
- A list of attendees or the total amount raised.
- Messages to your donor base, detailing the results of each campaign.
Donation Processing and Management
By automating some aspects of donation processing, your team can take a breather as they are no longer responsible for manually processing each donation.
This saves time and lowers the rate of human error, which is all but inevitable when dealing with numbers all day.
Accepting and processing donor management is no longer a pain, from pledges to honorarium gifts, memorial gifts, gifts-in-kind, and recurring donations. You won’t have to wait as long for the funds to settle after shortening the donation processing period, with the use of a robust CRM solution.
Grow your Business with the Right CRM
A customer relationship management system (CRM) is an essential tool for small businesses, enterprises and nonprofits, but not all CRM solutions are created equal. CRM platforms that are robust and scalable connect seamlessly with ERP and business intelligence tools. This ensures business processes are streamlined across the board, leading to increased business productivity.
When you implement a CRM solution, you are investing in the future of your company. However, like with any large investment, it’s critical to understand the financial impact and gain, as well as to evaluate the investment’s efficacy regularly.
Author Bio: Scarlett Jonathon is the head of marketing at DynamicsSmartz. She is a Microsoft Dynamics enthusiast with rich experience in integrated business solutions. She has a special knack for Dynamics 365 Business Central and Microsoft CRM solutions. She always tries to work on new ways of improving the entire concept of custom business solutions by providing truly user-oriented services.