What metrics should be used to measure ROI?
There are several metrics that you can use to determine incremental revenue and, therefore, if your CRM is effective:
1
Sales volume
Have the number of sales you closed a month/quarter/year and the dollar amount of each sale increased since you began working with the CRM system?
2
Time per sale
Are opportunities converting into sales quicker since you implemented the CRM system? If so, you should be able to get more into your sales pipeline, boosting sales volume.
3
Number of deals closed
Are more of the leads passed over from marketing being converted into customers and then closing since your CRM was implemented? If so, your sales volume should go up.
4
Sales administrative time
Is your sales team spending more time selling and interacting with prospects and less time on administrative tasks? If so, then your costs of sales should go down, making each sale more profitable.
5
Lead source
Can you track where your leads are coming from to see if you have any underperforming channels? If you can maximize each sales channel’s performance, then your pipeline should fill, deals should close, and sales volume will go up.
6
Net new revenue
Are you identifying and selling to new customers since implementing your CRM system? If so, those sales are incremental revenue. In addition, have you been able to support new pricing models and delivery channels, such as subscription pricing? If so, then you will have tapped into a part of your market that you previously were not able to reach.
7
Upsell rate
Are you able to sell more add-on or supplemental products/services to your current customer base? It’s true that selling to an existing customer is much less expensive than selling to a new customer. Customer loyalty does provide value.
8
Customer acquisition cost and customer value
Knowing what it costs to acquire a new customer is important. The higher the cost, the less profit you make. But that metric doesn’t quite provide the whole picture. To get the whole picture, you need to determine the value of an individual customer and an average customer. Calculating customer value will help you prioritize your sales teams' time, and guide decision-making about customer incentives and decisions.