It’s a familiar and reasonable question: “How do we measure the success of our CRM system?” After all, considerable time and expense have been invested into implementing the program, and company executives want to know if they are getting their money’s worth. This happens especially when anticipated sales or revenue forecasts aren’t achieved. But honestly, how exactly DO you measure the success of your CRM?
Assessing CRM Effectiveness
While many CRM experts and business leaders believe the effectiveness of a CRM application can be measured using various metrics, there is no one “correct” answer. The commonly perceived purpose of CRM is to increase profits by boosting sales through improved customer loyalty and retention rates (as well as reducing expenses). However, the company’s sales figures and bottom line changes aren’t actually an accurate measure of the CRM’s performance.
Some CRM software vendors claim that businesses using their CRM product can see sales growth rates exceeding various industry averages. Such a statement is not a deceptive practice; however, these things aren’t easily accounted to any one solution. Few are ever successful at really getting a true measurement.
Company earnings comparisons are not the way to correctly measure CRM accomplishments either, because that representation is very much incomplete. Profit spikes and drops can be the result of local or world economic changes and other factors that are in no way related to your CRM software.
Soliciting customer feedback through surveys and comparing effectiveness of marketing campaigns are great indicators of whether CRM efforts are paying off, but likewise, these methods don’t take into consideration the impact CRM makes on the way you conduct business in other departments.
Many times, when a company doesn’t see an immediate profit increase to cover how much was invested in their CRM database, they simply give up working at it. When weighing the effectiveness of your CRM system, it’s important to consider factors aside from profits. CRM processes influence other operational areas in many ways that are difficult to quantify.
How do you measure inefficiency? If a company is relying on solely on email and spreadsheets to manage its client interactions – with no centralized hub of historical contact information – is it really possible to calculate how ineffective that is?
Reaping CRM Benefits and Ongoing Wins
Try looking at it from the perspective of how much it costs if you don’t commit to your CRM for the long term. Also, examine the day-to-day impact the CRM has on productivity when unique circumstances arise, such as:
- Keeping virtual and mobile teams and those in different time zones on the same page
- Maintaining shared, centralized, live access to pertinent information – if a staff member is sick or off site for an extended period of time someone can step in easily.
- Organized tasks, alerts, and events automatically related to the appropriate client, contact, lead, company or deal
What is it worth to your company when dealing with scenarios such as these that may be uncommon or applicable exclusively to your business processes or industry? A CRM system can adapt to different business situations and support specialized needs, whereas email and spreadsheets are not designed for this purpose.
To reap the maximum benefits from your CRM efforts, the information gathered in the CRM needs to be relevant, up-to-date, and applied into actionable data. This will bring about Continuous Process Improvement – the ability to pinpoint problem areas, discover new information that needs to be collected and identify processes that are perhaps no longer necessary.
Measuring the CRM system’s effect in traditional terms is overrated. Keeping it simple to start while continually growing and molding the system and processes to streamline team effectiveness and promote efficiency will save time (and money) for years to come.