What does a CRM system yield; does the investment pay for itself over time? These are questions that – if we’re honest – can never be answered with certainty. They concern a future scenario, in which a pre-calculated ROI must always be based on assumptions. Fortunately, however, there are some points that will help you get an idea of what you can expect from a CRM system.
To find out the ROI of CRM, it is important to determine to what it has to contribute: operating cost-effectively, more leads, increasing revenue, improved customer satisfaction, or possibly some combination. So first, you’ll need to have a good idea of what it is you want to measure. What are objectives and KPIs? Based on that, you determine what kind of result you want to (or think you’ll) achieve, with the help of CRM, as an organization.
Now that you know what you want to achieve, you’re also better prepared to determine the requirements your CRM system will have to meet. It’s important to have a clear view of the investment. Besides the one-time cost of the CRM package, it’s also important to take other costs into account: training of staff, time and manpower invested, ongoing costs of management and maintenance.
Do you want to earn back the investment within a few years, or do you want to earn back some X amount per year? With the former method, you’ll determine the cost, then divide that by the number of years to find how much revenue your CRM system will need to yield on a yearly basis. With the latter, you’ll determine what you consider a realistic figure for the increased revenue thanks to CRM, and based on that you’ll know how many years it will take to recoup the CRM system’s cost.
It will always be guesswork, and you can’t control external factors like economic developments or the bankruptcy of a major client, but of course past experience (of your own organization or a similar one) can be a very good indicator of what would be a realistic ROI. Archie can also assist you in this process. Moreover, it’s good to know that an effective CRM system saves an organization time and contributes to improved relationship management, thus reducing customer loss and often boosting cross-selling.