How much ROI should you expect from implementing a CRM?

Calculating ROI helps manage the profitability of your CRM investment, enabling you to ascertain just how successful it is.  At the same time, calculating the ROI can show how well the system is being managed and whether or not it is generating sufficient growth.  Research by Nucleus has shown that for each $1 spent, a CRM will generate a return of $8.71, which is an extremely attractive percentage. This is why CRM savvy companies are constantly looking at making further investments into their systems.

How do you determine whether investing in a CRM is worth it?

Here are just four areas which that show the immense value that a CRM provides:

  1. A CRM records your contacts and leads: each of these is valuable and you never know when a contact will turn into a hot lead.  Keep them organized and add new ones as you find them. Divide them into categories if you wish and even produce bespoke reports.
  2. CRMs trace all customer communication: every phone call, email or letter can now be mapped by everyone with access.  Have your finger on the pulse, having access to interaction history. Show your customers how much you value them by knowing the exact status of their most recent contact.
  3. Flag up possibilities: who have you not spoken to recently? Use your CRM system to reveal possible hot leads. Keep all communication alive.
  4. Maintain your most valuable asset: never lose a contact purely because it wasn’t in the system. All relevant information must be stored within this one central place.  No lead should ever go unregistered, no matter where it originates from.

Find out which CRM features provide the biggest return on investment and benefits with our free guide

Your CRM is worth it because it enables you to focus on your customers. Keeping them at the center of your business is the fastest way to boost sales and profits.

What return from CRM should you expect after 1 year, 3 years, and 5 years?

Whilst the value of your CRM may be intuitively clear, how do you measure the return?  Will you apply this to non-financial or financial elements? You will need to choose certain metrics and then track them, such as:

  • Annual revenue: an improvement in this area will show a positive ROI but this is a very basic way of measurement. Industry conditions, economic changes – all can have an effect upon revenue so answers may be misleading.  
  • Precise indicators of revenue: you may wish to look at sales or number of orders per customer or even total sales revenue per customer.  Sales should automatically increase due to improved communication between your business and your clients.
  • Customer retention: whilst this may not be a financial measurement, it should definitely be on the increase.  Don’t expect a revolutionary shift as some may drop off due to the normal customer lifecycle trend.  Whilst some may remain for years, others may be transient, with much depending upon your industry sector.
  • Reduced costs: as efficiency improves, costs should reduce.  Admin time will be lessened and marketing to customers who have low response rates will lessen.

You need to set benchmarks across all of these areas and then perform regular reviews in order to assess the ROI of your CRM, and whether you’re hitting expected targets after each time period.

What are the ‘minimum’ returns you should expect?

An increase in efficiency and productivity are the minimum returns that you should expect from your CRM.  Whether or not they feature in the calculation of your ROI, they are soft benefits that can make your team more productive and efficient.  The new software should make the sales and marketing departments work together far more effectively, enabling unproductive and wasteful marketing or selling strategies to be removed.

All savings need to be taken heed of when it comes to calculating your ROI as each can have a positive bearing on the success of your business.

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Jane Tareen

About the author…

An MBA-qualified professional, Jane specializes in all kinds of copywriting and creative content production. With many years spent working in advertising and publishing, she is also skilled in editorial production and proof-reading. Whilst writing, she has a constant companion in the form of one very large Fox Red Labrador!

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Jane Tareen

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