By Dick Wooden on August 18, 2015 at 8:30 AM
Your well-used CRM system has its worth updated every day.
Your CRM purpose-built system operates the way you need it to operate and so it is adding value to your business every day. Having this well-used CRM system is adding value to people every day in their productivity gains and the level of engagement with the customer. The customer service reps are genuinely helping on each customer support call. Additionally each customer is receiving a better experience they value greatly because of the way your people and your CRM knowledge database interact. The worth of insightful knowledge of organizations, of people and of the relationships is priceless.
Today you better understand your ever-evolving buyer....
In "Understanding the Value Points for CRM in Your Business" I mentioned CRM is about understanding the buying habits and preferences of your customers and prospects so you can:
Build and strengthen customer relationships to keep them coming back.
Provide value-added services which are difficult for competitors to duplicate.
Improve your product development and service delivery processes.
Increase your staff’s awareness of customer needs.
Reduce customer frustration by not asking the same questions over and over.
Consider the value-added benefits these bring to your organization. Also consider the Customer Value Improvements, mentioned below.
Measuring the Results of CRM
In "Measuring the Results of CRM" by Ruth P. Stevens covers metrics in three arenas: Cost savings, Revenue Enhancements and Customer Value Improvements.
Cost Savings - is a much easier sell than talking revenue. Operational efficiencies can be look at campaign expense reduction and internal process improvements.
Revenue Enhancement - most markets eagerly anticipate revenue increases will flow from their new efforts but increased revenue is where the greatest long-term value lies. Revenue sources include:
- Campaign response improvements - more orders, more new customers.
- Increased size of the average order to number of products in an order.
- Competitive wins, like an increase in share of the customer's wallet.
- Cross selling and up-selling opportunities during sales and service contracts
- Customer profitability - migrating customer groups from lower to higher value levels.
Customer Value Improvements - the best metrics revolves around customers themselves. Three important customer measures to track from Judy Kincaid, author of Customer Relationship Management: Getting It Right:
Lifetime Value (LTV) - the single most effective measure relating to revenues the customer will generate over the life of their relationships net of the variable cost of achieving those sales.
Customer Satisfaction - is measured by observing behavior and most likely captured by surveys.
Customer Attrition - loosely means someone who has not purchased over a certain period. The company’s churn rate should then be compared to industry benchmarks.Read more from Ruth in this excellent article as she mentions qualitative measure of CRM readiness, why it is so hard to measure CRM, and rules for successful CRM measurements.
Delivering on the One Version of the Truth
A well-used, valuable CRM system will be considered the one version of the truth where people in your organization rely upon and go to. It is where the sales person goes to get a snapshot of what has been happening in an account before they make important phone calls.
It is where the VP of sales heads for to check on sale productivity and determining which sales reps need some helpful coaching.
It is where the customer service representative turns to as they inform the customer on an updated service/support case.
How to Measure the Value of a CRM Solution
"Top management has the right to an effective, strong, and viable CRM value proposition in the form of a business case that contains metrics," says Barton Goldenberg, president of Information Systems Marketing Inc. (ISM), who developed a yardstick in the form of a six-point value proposition. To measure your CRM software success, say Goldenberg, look for the following indicators.
- Productivity Enhancements. Shoot for a 10 to 20 percent increase in productivity per user per year and reinvest this back in the system.
- Lower Costs. Look for a 5 to 10 percent annual reduction in marketing, sales and general administrative costs following system implementation.
- Superior employee morale. Goldenberg says a 10 percent reduction in turnover in customer-facing positions is a reasonable expectation. The number of qualified applicants increases, lured by state-of-the-art mobile ready CRM application.
- Improved customer knowledge. Within 24 months of CRM go live, expect to have a complete customer profile with knowledge which can be used in a variety of different ways.
- Improved customer satisfaction. Per year, satisfaction should increase at least 10 percent of the difference between where you are now and perfection. If your customer ratings are 60 percent now and 100 is perfection, then the 40 percent difference means you should see a 4 percent satisfaction increase annually
- Improved customer loyalty and retention. Goldenberg suggests looking for a 5 percent increase per year in the wallet share your customer spend with you versus the competitors and a 10 percent decline in customer rate of drop off.
Read the entire Selling Power article here...
Exploded Value of Mobility
Companies can reap substantial percentage improvements in their business metrics from mobilizing sales force automation technology and services.
How important is it to your business to:
- Increase field selling time 26%
- Eliminate redundant activities 27%
- Increase win rates 26%
- Reduce sales call costs 25%
- Increase forecast accuracy 25%
- Decrease administrative time 24%
- Decrease sales cycle 23%
Per the "Anywhere Enterprise-Large: U.S. Mobility and Business Applications Survey" from The Yankee Group. A similar studied showed the following:
Add in the value from the trusted CRM business partner
The success of the well-used CRM system is a valuable business asset also probably involved a well-experience business person who also is skilled in the design, implementation and support of the CRM system you have in place.
The CRM business partner presented the business drivers for change which matched your CRM leader's vision of the business improvements. Other stakeholders in the company were involved in conversations and the direction to be chosen. The 18 requirements for business success with CRM were incorporated into planning. New insights were shared with your team as well as best practices. Getting started guides helped understanding and getting everyone get on board
A road map was planned with key milestones for implementation measurements. The pilot team worked any of the kinks out and the business partner's development team made the helpful customizations - matching your business processes. In this collaborative trusted environment new ideas were discovered and added to the future roadmap.
Knowledge was transferred from the CRM business partner's staff to your organizations people through face-to-face meetings, conference calls, webinars, hands-on training, print materials and word of mouth. User engagement grew, people were getting the right actions done at the right time and the business stepped up the next level.
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Related value from these resources:
How to Measure the Value of a CRM Solution (Selling Power Magazine)
Measuring the Results of CRM - Ruth P. Stevens