Of course, CRMs also cost money. So, when you’re choosing a CRM and trying to figure out how much it’s helping your company, one of the best methods is comparing the cost of a CRM system to its benefits. That’s what we’re going to discuss on this page.
One of the best ways of comparing the cost of a CRM system to its benefits is to calculate its return on investment (ROI). Essentially, you look at how much the CRM costs, then compare it to how much it contributes to your revenue. The higher your ROI, the more profitable the CRM is.
The ROI formula is:
ROI = [(total revenue brought in by CRM – total cost of CRM) / total cost of CRM] x 100
This formula lets you easily see the overall financial benefit of your CRM. If your CRM ROI is negative, it means you’re spending more than you’re earning, which is bad news. Even if you have a positive ROI, though, it still may not be desirable if it’s a low number.
Assessing CRM’s impact on revenue
ROI allows you to conduct a financial comparison of CRM benefits and costs. Some of the most significant benefits of a CRM system include:
Improved customer engagement and loyalty
Increased leads and sales
More efficient internal processes
When you consider your CRM’s overall usefulness and balance it against the costs, it’s important to consider all the benefits and how they might impact revenue.
To get the most accurate estimate of your CRM’s impact on revenue, factor multiple metrics into your assessments.
Consider metrics such as revenue itself, sales cycle length, average deal size, and deals or leads closed per salesperson. Compare these numbers before and after you started using your CRM.
It’s also important to consider other factors that may have impacted your revenue, such as changes in team size, the introduction of new products, and market fluctuations.
Identifying areas for improvement
When comparing your CRM benefits and costs, you’ll likely find at least one area where you could further increase your ROI.
For example, maybe the sales automation features in your CRM are driving improvements, but you don’t see a significant impact from the email automation features. In that case, you know that’s an area you’ll want to reoptimize.
As for how to optimize your CRM, the answer is data. You can view marketing and sales reports to help you see how your CRM is performing. Then, you can make improvements based on what the data tells you. For example, from your data, you can tell which types of emails certain customers are most likely to open, enabling you to segment your audience to improve results.
Data-driven improvements will always be more efficient than guesswork since they can accurately identify the source of the problem.
Nutshell is the optimal CRM for driving up your ROI
When comparing CRM costs and benefits, you’ll want to look at both your CRM’s ROI and the other less easily quantifiable benefits that come with your CRM. Using those metrics, along with data reports from your CRM itself, you can identify areas that need improvement.
Then you can reoptimize your CRM to provide more benefits for the same cost. Doing this regularly enables you to continuously improve your CRM’s ROI over time.
If you’re looking for a CRM that can drive maximum revenue for your company, Nutshell is the perfect choice. In addition to its stellar data gathering and categorization services, Nutshell also provides sales automation features and advanced data reporting.
Not sure if Nutshell is right for you? Just check out our 14-day free trial to see for yourself how it can benefit you!