Any company considering upgrading or investing in a new Customer Relationship Management (CRM) product can save money, increase revenue, and improve customer satisfaction over time, given proper levels of planning, communication, and coordinated agreement on the specific CRM business goals.
A carefully planned strategy for realizing return on investment (ROI) for a new CRM product is necessary before making any decisions to proceed, for several reasons:
The biggest payback from a CRM product investment is increased revenue from better-targeted selling and customer retention, as opposed to cost savings. However, since the cost savings factor is probably the easiest to quantify in terms of CRM product ROI, this article explores some ballpark costs and ROI timeframes for them.
Investments needed to implement a highly functional new CRM product vary widely depending on a number of variables, such as:
General CRM product investment cost categories include software (licenses and support), hardware (laptops, desktops, mobile devices, printers, etc.), customizations, consultancy, legacy systems integration, staff training, telecommunications, and technical support.
In looking across a number of industries, studies, solutions, and other heuristics for estimating, a new CRM product implementation in an enterprise environment can generally cost from $8,000 to $17,000 per user. Upgrading from an existing system could result in lower costs, as could implementation of a new CRM product in a small business.
As with CRM costs, timeframes for a new CRM product ROI are widely varied. Accurately estimating them can be as big a challenge as estimating up-front costs (if not greater). For example, some costs are one-time, and others are ongoing. Some returns are realized soon, while others are realized over years.
Increased revenue due to an improved CRM product investment is the biggest payback. Factors such as speed of the sales force’s expertise in adoption of the new CRM, improved sales numbers, better customer retention, and more up-selling drive the CRM product ROI numbers.
In addition, ROI on an enterprise CRM purchase is not always directly measurable in a dollar-for-dollar payoff. For example, improved efficiencies, competitive advantage, customer satisfaction, and staff morale are CRM product ROI factors that are not easily measureable.
Given all these variables, most enterprises see ROI on a new CRM implementation within one to three years.
Customer Relationship (CRM) software has become one of the most important business tools in today’s world. By allowing you to better connect with new and existing customers, CRM is an indispensable tool for sales teams and customer service teams alike. But with so many choices available, it can be difficult to decide on a solution. more