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Setting Up Metrics and KPIs for Your CRM

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Key performance indicators (KPIs) are metrics that help you evaluate the progress your company is making. You can use KPIs across many different aspects of your business, including your customer relationship management (CRM) platform.

CRM KPIs are important because they help you evaluate your success in generating and retaining customers. By tracking these metrics and evaluating them, you can figure out which parts of your marketing and sales need improvements, as well as how you can optimize your CRM usage to make those improvements.

In this blog post, we’ll discuss important aspects of setting up metrics and KPIs in CRMs, including:

  • Identifying key metrics
  • Setting up tracking systems
  • Creating reports
  • Tracking customer engagement
  • Using KPIs to optimize the CRM system

Read on to learn more!

Identifying key metrics

Before you start the CRM metric and KPI setup process, you first have to identify what those KPIs are. Some of the most common CRM metrics include:

  • Customer acquisition cost (CAC): The amount your company spends to earn a new customer
  • Customer retention rate: The percentage of customers who remain a customer over a given period
  • Customer lifetime value (CLV): The average amount a customer spends with your company over their entire relationship with your company
  • Net promoter score (NPS): A measurement of how loyal customers are to your company.
  • Customer churn rate: The rate at which your customers stop doing business with you.
  • Close rate: The rate at which you successfully close sales.
  • Sales pipeline velocity: The speed at which leads move through the sales pipeline.
  • Win rate: The percentage of sales opportunities that you successfully close.
  • Lead-to-opportunity conversion rate: The percentage of leads that convert to sales opportunities.
  • Customer effort score (CES): A measurement of how much effort customers have to exert to get a solution from your business to their questions or issues.

Of course, these are just a few of the metrics you’ll want to track. You’ll probably identify other KPIs as well. But how can you figure out which CRM KPIs are important for your business?

The best way to identify important CRM metrics is to examine your business goals. Then think about which metrics are most effective for measuring those goals. Make sure the metrics you choose are specific, measurable, and actionable.

Setting up tracking systems

Once you’ve identified the CRM metrics you want to prioritize, the next step is to begin actually tracking those metrics. To do that, you’ll need to set up tracking systems that can gather the right data.

There are different ways you can do that. One way is to use other tools—Google Analytics, for example—to gather your data and then integrate those tools with your CRM to import it all into one location. Another method is to track customer interactions through your customer service team.

In particular, take the time to gather data from customer surveys and other feedback channels. Any insights your customers give you about their interests or preferences are incredibly valuable.

When you track and gather your customer data, make sure you enact some data cleaning and governance practices. You need to create clear guidelines on how your team should handle data—how to clean out any errors in your datasets, how to migrate data, and who should perform which tasks. That will help things run far more smoothly.

Creating reports

Once you’ve gathered your data, it’s time to start analyzing it. The best way to do that is to generate reports, which can lay out your customer data in an easily comprehensible way. By analyzing these reports, you can learn about the effectiveness of your marketing and sales campaigns.

With the right CRM, this shouldn’t be a problem. A good CRM can generate reports that are easy to read and understand. In the case of a CRM like Nutshell, you can access a wide range of reports and generate various customized sales reports.

You can then deliver those reports to relevant stakeholders within your company who may be interested in seeing the performance of your marketing and sales efforts. Different stakeholders will have different priorities, so it can be helpful to create a customized report for each one.

You can also make the reporting process much easier with automation. Most CRMs can automatically generate reports on a regular schedule of your choosing, so you can always stay in the loop on your CRM performance.

Tracking customer engagement

Using your CRM KPIs, one of the things you can track is customer engagement. It’s important to be aware of how successfully you’re engaging your customers—low engagement indicates a need for marketing and sales re-optimization. Customer data can help you track this information.

You can check in on different touchpoints to monitor customer interactions, including:

  • Social media
  • Email
  • Phone calls

The above sources of interaction, as well as the results of customer surveys, can help you see how engaged and satisfied your customers are overall. In particular, you can hone in on metrics like net promoter score (NPS) and customer effort score (CES).

By observing where customers are and aren’t successfully engaged, you can figure out which areas are most in need of improvement.

Using KPIs to optimize the CRM system

A CRM exists to help you improve your customer relations through sales and marketing. For many CRMs, that includes using your CRM to directly engage your customers. Your KPIs can help you identify if you’re successfully driving results with your CRM.

For example, your sales reports might reveal that you’re not hitting your win rate goals and losing potential leads during the sales process. By investigating your sales process in your CRM, you can identify potential improvements, such as how you assign leads to sales reps or how often you send out automated follow-up emails.

By examining your KPI reports, you can identify areas for improvement. From there, you can make the necessary changes to improve your CRM and the way you use it. Often, it helps to integrate your CRM with other systems. Also, if you aren’t already doing so, it’s a good idea to define your sales process, create custom pipelines, and automate as many day-to-day sales tasks as you can since it removes the tendency for human error.

Nutshell can help you with setting up metrics and KPIs

To sum up, KPIs are a crucial part of any CRM system. Tracking KPIs can help businesses optimize how they use their CRMs, as well as their marketing and sales as a whole. For this to be successful, you have to continuously monitor your KPIs and optimize your CRM and sales efforts based on what you learn.

The sooner you begin the CRM metric and KPI setup process, the better your results will be. It’s also important to choose the right CRM, and that’s where Nutshell comes in. Not only do we offer plenty of sales reporting and analytics features, we also provide sales automation, email marketing, and a top-tier customer service team that can help you through any questions or problems you have.

Not sure if Nutshell is right for you? Just check out our 14-day free trial to see for yourself what our CRM can do for your business!

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