With today’s growing CRM functionality, it is quickly becoming the core business solution to generate revenue and reduce costs by expanding sales, increasing marketing effectiveness and improving the customer experience. When properly implemented, a mature CRM solution can support sophisticated and complex business processes to give management powerful information to help run a profitable business. Such technology investments can be a costly venture which begs the big question, “what is my return on investment?”
One of the first steps to realizing multiple ROI possibilities is to map out your unique business processes and identify key performance indicators. Then, select a technology solution that supports your processes and provides essential reporting tools that will give you the necessary insights into your business. Your technology solution should be viewed as a tool to run your business, allowing you to manage by exception and be a single source of truth to your organization.
Software is a Tool – Like any good tool of the trade, it won’t run your business but it should give you valuable information to help you make key decisions about your business.
Consider the analogy of a good building inspector who uses a thermal infrared tool to find moisture between the walls or under a newly installed carpet. The tool won’t tell how to fix the problem, but will provide valuable information that warrants further investigation into the situation to determine if this would be minor repair or a costly unexpected investment. Just as the inspector sheds a red light on what may be between the walls and under the carpet, a CRM solution can tell you what you don’t know about your business. Do you know what your top five profitable products are? What is your average sales cycle? How can you shorten it? What is your customer retention? And how can you increase it? If you could have this information readily available to you via dashboard or custom report how would that help you make key decisions about your business?
By using the many reporting tools and dashboards within CRM you can gather valuable information on your KPI daily, weekly, monthly and/or annually. And, when combined with your industry experience, knowledge and skill set, you will be able to make informed decisions to help increase revenue and reduce costs.
Management by Exception – ROIs come in many different forms and one of those forms is the time and money it can save you and your employees. A successful discrete manufacturing owner once shared with me that if a job is going according to plan and it’s making him money, he didn’t want to worry about it – it’s the job that is costing him money that he wanted to know about earlier on and have the ability to drill into those details while he still had time to turn it around and make a profit.
When you automate key business processes by setting up workflows, you can have the system alert you when the process falls above or below your standards, which gives you the opportunity to take immediate action on items could make or break your business. Issues that need to be addressed to ensure sales growth or reduced costs will surface to the top and not get lost among the items that are on track. Thus, you are focusing your time and talent on the critical issues of the business.
We all know the sales cycle numbers game. Over time, metrics will tell you how many leads you need to have at the top of the funnel to ensure X amount of sales in a given period of time. What happens when sales opportunities dip at the top of the funnel? You can expect sales to drop. Unless you set an alert to ping you immediately when this drops, you won’t notice the decrease in sales until you get to the end of your sales cycle and analyze the data. This is when you scratch your head and say, “I wish I knew about this early on when I could have reacted.”
Successfully establishing good management by exception is knowing where the key trigger points are and how they may affect your business. Like the human body, pain in one area generally radiates to another part of body. If you fix one part of the business it could help fix another part of the business and as you continue to fix the pain points, you increasingly become a healthy, growing organization.
Single Source of Truth – Most organizations have multiple information systems, each of which needs access to data relating to the same entities (like a customer) and cannot be modified in non-trivial ways. Thus, having one interface that acts as the golden record that will update all other entities accordingly can yield a big savings within an organization.
Having an integration of information across the enterprise gives you stronger insights into the profiles of your customers, their buying habits and business trends. The power of this information can help you upsell or cross-sell into new areas you may not have considered in the past. Good online retailers excel at this concept by offering suggestions of other products based on the same or similar items customers have bought.
Having a single view into the customer can help improve customer service and retention by being able to react faster to requests or be proactive to specific needs. Knowing the full customer story from marketing, sales, customer support and accounting can help increase the line of communication both internally and externally.
Overall, a well-planned CRM project can yield great returns on your time, resources and investments. Whether you are a small organization or large enterprise, the needs are the same – you want to increase revenue and reduce costs.