Marketing and sales are two of the most important departments in any business. After all, if you’re not marketing effectively, you won’t get sales. And without sales, there is no business. That’s why it’s imperative that you focus on finding the right tools to help you improve your sales and marketing efforts.
A customer relationship management (CRM) software program can help with both. If you’re using the wrong CRM, however, there’s a chance you’re wasting your money. So how do you know if your CRM is working for your business? You need to track, calculate and evaluate it. Here’s how.
Tracking Your ROI
Tracking and measuring the ROI of all of your marketing efforts can help you determine which activities are generating the most income. A CRM can be seen as a marketing tool, which means tracking and calculating its ROI is worth considering. That way, you’ll know if using it is worth the money or if you need to switch to a new CRM.
There are six key metrics you should track:
- Number of sales calls per day and number of sales per call
- Average value per customer
- Sales cycle duration
- Client retention rate
- Cross-selling and up-selling rates
Tracking these metrics will get you closer to calculating the ROI of your CRM.
Calculating Your ROI
You can calculate the ROI of something using the ROI formula: the current value of the investment, minus the cost of the investment, divided by the cost of the investment. That number is your return on investment.
The current value of the investment is how much money you made from using it. In the investment world, it would be based on the sale of the investment of interest. Since we’re talking about CRM software, the current value of the investment would be how much the CRM is bringing in for the business.
Evaluating Your ROI
Now that you’ve tracked and calculated your ROI, it’s time to evaluate it and decide whether your CRM is working for you financially. To determine that, ask yourself a few questions:
- Has your revenue increased?
- Are you putting in more than you’re getting out of it?
- Have you factored in initial productivity loss (the time it takes for your employees to get accustomed to using it)?
If your answers aren’t favorable, it’s time to ask yourself whether the current CRM you’re using is worth the investment. If not, consider switching over to a CRM and provider that can give your clients a personalized, customer-centric experience and allow you to track sales performance, manage revenue and improve the response time to customer issues and inquiries. For instance, using Infor CRM can boost revenue, and it can easily be evaluated for ROI. With Infor CRM, you’ll get a clean, modern interface focused on usability and extensive customization capabilities that other CRM systems don’t have.
Figuring Out Your ROI
Now that you know how to track, calculate and evaluate the ROI of your CRM, you can determine whether or not it’s beneficial for your company. If you find that the ROI isn’t what you expected, there’s always time to switch your CRM software and provider to one that offers more flexibility and more customization options that allow you to work smarter, not harder.