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The cost of ownership and return on investment of your customer management relationship solution depends on your requirements initially and over time. As your business changes, so do your CRM needs. A well planned CRM software strategy can save you time and money now, yet allow you to build on your solution as your company grows.
For many businesses, a cost of ownership model over a 3-5 year time-frame will provide a better ROI with an in-house system. To justify this however, you must consider your strategy carefully. One of the major decision factors is whether you will need to integrate CRM software into your accounting system or a specialized customer service or ERP system. In this case, although the initial cost of ownership can be quite substantial your return will justify such a high upfront investment. The initial costs for example will involve the cost of consulting, deployment and licences.
Quantifying your ROI can be broken into tangible and intangible factors.
Tangible factors are easier to quantify. For example, if your sales team can identify new sales and cross-sell opportunities faster and close transactions 20 percent quicker then you can easily measure your productivity increases along with the increase in revenue .
In another example, your CRM will let you run specific marketing campaigns. Segmenting your database and recording client and prospect interests will allow you to more effectively target campaigns. A specific campaign run from your CRM helps you measure ROI per lead. Your return based on actual sales as a result of your marketing campaign can be measured specifically.
The intangible factors can be more difficult to quantify. CRM software enables you to automate your sales and marketing processes. To substantiate productivity gains you need to be clear in your understanding of your manual processes. For example, many sales people have to develop their own quotations and work on spreadsheets. Others have a sales administrator to assist them. These tasks are time consuming, affecting your productivity and costs.
Initially you should set up the goals and objectives on intangible benefits prior to starting your CRM project. If your goal is to make your sales team 20 percent more productive, then you must determine what CRM processes are to be developed to give sales 20 percent more time to generate and close more opportunities. Similarly, if automating your sales processes reduces the rate of sales closure from 6 to 5 months then your goal is to increase sales by 15 percent.
Customer service modules also can be measured if your incidents can be reduced through better handling, escalation and knowledge. Increasing customer satisfaction by reducing customer complaints will have a measurable effect on your revenue and profit.
Automation in sales, marketing and customer service can make a significant difference to your bottom line. You can then use your customer relationship management solution to automate a variety of processes to increase your company’s productivity.
In considering your CRM software investment you need to understand your requirements first. Determine which system, in-house or a web based CRM software solution is right for you. It will also help you determine what CRM products and services are suitable. Your initial cost of ownership depends on this. Secondly, develop your goals and objectives to justify your ROI. To do this, you will need to be clear on your current sales, marketing and customer service processes and then set the benchmarks you will need to reach to achieve a solid return.
Related articles
- CRM Software – First Steps To Measuring Cost of Ownership and ROI (bayviewhunterspoint.com)
- Take Your Business Overseas To Grow (bayviewhunterspoint.com)
- Maximizing your usage of CRM software (customerthink.com)
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