What is the ROI of a CRM?
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According to a study by Nucleus Research, every dollar spent on CRM implementation returns as much as $8.71 in sales revenue.
Let’s face it…you can’t make it through a networking breakfast or an after-work mixer without hitting on the topic of customer relationship management, or CRM as we call it. (And if that’s not the case, you go to way cooler after-work mixers than I do).
So what’s the bottom line on CRMs? Is it possible to predict their return on investment (ROI)? How can you be sure the time and money you spend on a CRM tool is well spent?
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When most people speak of CRM’s ROI, they want to know the exact dollar amount they could earn for the money they spend on their CRM system.
And the research shows: the financial return on investment has the potential to far exceed your initial investment.
The CRM market may have been shaky in its early days, but its recent rise demands attention. Fortune Business Insights valued the CRM market at $101.41B in 2024. What’s the forecast? It’s expected to grow to $262.74B by 2032.
The market continues to ramp up its game, promising greater usability, functionality, and a fine-tuned user experience. In a best-case scenario, for every dollar spent by businesses on their CRM, they can expect to earn $42.72 or more (2024).
CRM improves many intangible factors in your business as well as your sales. With this in mind, calculating the gains from your CRM involves factoring in numbers such as sales generated, hours saved by your sales reps, and increase in money earned every business hour.
Once you have this number, you can calculate your CRM with this basic formula:
CRM ROI = (Gains from CRM investment – Cost of CRM investment) / Cost of CRM investment
To express the number in a percentage value:
CRM ROI = (Total profit/Total investment) * 100
Simply put, if the value brought by your CRM – including sales won, time saved, and other valuable benefits – is higher than the amount you’re investing, then your CRM ROI is positive and you’re gaining more than you’ve spent.
Calculating an accurate ROI for a CRM investment can be tricky. It’s easy enough to run numbers through an online ROI predictor such as Forrester’s Total Economic Impact (TEI), but the calculation is only as reliable as your data. If you’re looking to predict anticipated ROI, these calculations will assume good usage from your CRM, something that rarely happens in the real world. Oh, and they cost a lot of money.
Of course, improved productivity is a prime benefit of CRMs, especially in key departments such as sales. Return predictors make assumptions about optimal CRM adoption. But just like diet plans promising to shape mush into muscle won’t pan out if you don’t follow the rules, online ROI predictors won’t sync with your numbers if you don’t take a hard look at your patterns and commit to use your CRM to its full potential.
According to an IBM study, the ROI of a properly implemented CRM system has the potential to exceed 245%. A CRM is extremely valuable when you implement it fully, so simplicity of operation is a factor to consider when choosing your system.
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As you may have already guessed, CRM is not a magic wand. It won’t turn your business into a unicorn overnight. Take a hard look at your organization’s strengths and weaknesses.
Here are factors that can make or break your CRM:
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If you drive a Porsche in second gear, you can’t complain about performance. The same is true for predicting a strong CRM ROI. Be ready to shift into high gear. Identify key performance indicators, and weigh their influence. Then target the ones that will bring the most benefit to your business. Here’s how:
A CRM isn’t a silver bullet, but it is a powerful tool to manage, automate, and assess specific goals. Stuff like:
I’m tempted to send you to tools like “Forrester’s Total Economic Impact (TEI)” to determine the CRM ROI. But you don’t need a $2,500 report to tell you what works for your business.
Does your team have blind spots? Do they value tools that make them efficient? That’s the environment where CRM thrives.
Ultimately, the CRM that gives you the most ROI is the one your team actually uses. Here at Nutshell we understand that fast CRM implementation is key to business growth.
Nutshell’s simple and intuitive CRM is easy-to-use with key CRM features such as sales process automation, customizable reports, and intuitive contact management.
Plus, loads of native add-ons and suites for marketing and engagement, for when you choose to expand your CRM’s potential.
Try Nutshell free for 14 days (no card required), or contact our team to learn more about how Nutshell can help you grow your business.
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