Interacting with your customers requires more than a personalized, human touch. If you want to truly make an impact and do it at an enterprise scale, excel sheets and paper files on a desk will not cut it. And even if your organization uses tools to enable sales automation, that alone will not help differentiate you from your competitors. Now more than ever, investing in a Customer Relationship Management (CRM) system has become a fundamental requirement to run a business.
Sometimes it’s easier said than done.
Whether your organization doesn’t have a CRM platform or wants to get more out of it, investing in technology is often about the bottom line. And if there is no budget for the proposed CRM project or program, it will not get launched. Making the case for a CRM investment by using Business Value Metrics is a good first step to securing the necessary budget.
So, how can you build the business case for CRM investments?
Whether it’s a new CRM investment or programmatic improvements, calculating a CRM return on investment is a simple activity. We have many ways to approach this calculation, and security, regulatory, or brand perception can be factors to consider, but for now let’s focus on dollars and cents.
A CRM will provide the tools that enable companies to interact with their customers in a more meaningful way. And if a company thinks of their CRM investment only as a “tool,” then subtracting the cost from the benefits over time for that tool will yield a rate of return. But CRM is not simply a tool. It introduces capabilities that fundamentally reduces costs and improves revenue that are not one-time events. And it provides customer insights that drive innovation and intelligence that would not otherwise be possible. The question isn’t whether there will be a return on investment, but how much a company will benefit over time. CRM is a strategic investment, not an investment with the sole focus of reaping a payback period.
So, how do you measure it?
You take a holistic assessment of your costs and subtract how your organization will benefit.
The costs of doing business. The key factor isn’t the size of your organization, but the complexity of your business model. CRMs like Salesforce and their SaaS infrastructure enable powerful capabilities that scale by design. It doesn’t matter if your organization is 100 or 10,000 users. What does matter is how custom your processes need to be that may require code, may require integration with third-party systems to effectively function, may require multiple Salesforce instances, and may need to overcome limitations to ensure data cleanliness. This will influence the following factors:
- Initial Investment. This is the cost to initially stand-up a Salesforce instance. An out-of-the-box implementation for a group of pilot users could require minimal spending and span a matter of weeks. A far more complicated implementation could cost upwards of seven figures and span months. It’s recommended to start small and fast, and then scale to the complexity your organization needs.
- Recurring Cost. To get the most value from a CRM, it must be treated as a platform and not a tool. Maintaining a platform comes with ongoing costs:
- Licenses. SaaS models like Salesforce have annual subscription costs. Pricing will vary by the number of products your organization has purchased and which capabilities you are using within the platform.
- Technical Support. Like everything else in technology, if it can be built then it can be broken. Your organization must also consider the cost of Salesforce Administrators to support any challenges your systems may experience. The number of required administrators will vary by the total number of users actively using the platform.
- Ongoing Maintenance & Enhancements. As your business continues to grow, the systems which support it must also grow. And the more complicated your business model, a more experienced skillset is required to maintain it. This could be the difference between training existing employees to be administrators or hiring new Salesforce developers to meet these needs.
- Programmatic Costs. As your organization’s CRM footprint evolves, you will need to identify the next frontier of capabilities to become more agile within your market. This could include broader programs like enabling enterprise configure-price-quoting, or contract lifecycle management or extending your sales CRM capabilities to include services and marketing. These big investments also require big price tags. This is the cost of managing a CRM Roadmap.
The benefits from your strategic investment. We’ll focus largely on sales business value metrics (BVMs) although there is also a wide array of BVMs driven by services and marketing capabilities. These sales capabilities will give your organization three powerful toolsets that will ultimately lead to saving and opportunity gains that wouldn’t otherwise be realized:
- Sales Enablement. Ways to manage an organization’s sales lifecycle that wouldn’t otherwise be possible.
- Sales Efficiency. Performing activities faster and with intelligence so users can be more productive and confident in their day-to-day tasks.
- Sales Strategy. Generating sales insights that will drive better decision making.
*You can download a PDF copy of this checklist here.*
By taking this short list of impactful metrics, your organization can start to tally the tremendous benefits of a well-executed CRM. Also consider scale, and extrapolate the per person, per account, per opportunity value that it will reap. For example, simple and attainable improvement of 1% to customer retention could impact hundreds of thousands, if not millions of dollars. Remember: This is not a one-time benefit, but value that will be realized over the life of the CRM investment. It will be through these ways that an organization can truly make an impact, on an enterprise scale, while interacting with its customers.
To learn more about how to make the case for Salesforce investments with business value metrics, reach out to an Appirio expert.
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