How to Measure CRM ROI to Optimize Your CRM Performance

In this guide:

• Key performance indicators (KPIs) for a CRM system
• Measuring customer engagement in CRM software
• Measuring sales and revenue with a CRM system
• Comparing CRM costs vs. benefits
• Best practices for successful CRM strategy

Key performance indicators (KPIs) for a CRM system

Tracking key performance indicators—that is, crucial metrics related to your CRM’s performance—is one of the most effective ways to assess your CRM. Some of the best KPIs to track include:

• Net promoter score (NPS)
• Customer churn rate
• Close rate
• Sales pipeline velocity
• Win rate

The best way to identify key metrics is to consider your business goals and then look at which metrics best measure those goals. You can track these metrics using different tools, from Google Analytics to customer surveys. Then you can import the data into your CRM and use it to generate reports.

From there, it’s simply a matter of optimizing your CRM based on what you learn.

Measuring customer engagement in CRM software

Another area to measure when determining your overall CRM system ROI is customer engagement. It’s important that your CRM help you maintain high customer engagement because, without it, your customers won’t stay customers for long.

Some of the ways you can measure customer engagement include:

• Tracking customer interactions
• Analyzing customer data
• Measuring customer loyalty

By continuously monitoring each of these things, you can get a good read on how engaged your customers are, helping you optimize any areas where it could be higher.

Measuring sales and revenue with a CRM system

Ultimately, the goal of your business comes down to driving sales and revenue. So, you naturally want your CRM to be good at doing that. To evaluate its performance, you’ll want to measure your CRM’s impact on sales and revenue.

Most CRMs make it easy to generate sales reports where you can attribute each sale to the campaigns and CRM workflows that drove it. That means you can identify the areas of your CRM that are less effective at driving sales, allowing you to reoptimize them accordingly.

You can also go beyond sales and assess the impact of your CRM on your marketing campaigns. Even marketing campaigns that aren’t directly run through your CRM still often benefit from the data contained there, so it’s helpful to assess those campaigns, too.

You can then take what you learn and reoptimize your CRM to drive even more sales and revenue for your business.

Comparing CRM costs vs. benefits

Once you’ve sized up the benefits your CRM is driving for your company, be sure to compare those benefits to the CRM’s overall cost. After all, you want to make sure you’re earning back everything you’re paying for your CRM and more. That’s where ROI enters the picture.

To calculate the ROI of your CRM, first determine the net profit generated with your CRM by subtracting its cost from the revenue it helped you bring in. Then, divide your net profit by the cost.

The ROI formula looks like this:

ROI = [(total revenue brought in by CRM – total cost of CRM) / total cost of CRM] x 100

Furthermore, if you work to improve the weak spots you identify in your CRM’s processes, you can continue to make it even better, driving up your ROI even more.

Best practices for successful CRM strategy

In order to help make your CRM as successful as possible for your business, you should aim to take a comprehensive approach. There are several best practices you can implement to improve your CRM’s effectiveness, including:

• Aligning your CRM with your business goals
• Focusing on addressing customer needs
• Integrating your CRM with other business systems
• Continuously monitoring and optimizing your CRM performance

It’s especially important that you maintain an ongoing training process for your team members to ensure they’re always up to date on the latest CRM best practices.

Nutshell is the ideal CRM for driving a high ROI

Having a CRM that’s capable of driving leads, sales, and revenue is crucial for the success of your business. That’s why it’s so vital that you take the time to implement the best practices listed above and reoptimize your CRM based on the insights you gain from your analytics.

With a customer-centric approach being so crucial, you need a CRM that’s capable of getting the job done. That’s why Nutshell is such a great option for your business. Not only does it feature data categorization and sales automation capabilities, but it can also generate extensive reports on its own performance.

Not sure if Nutshell is right for you? Just check out our 14-day free trial today!