CRM Metrics to Measure Success
Apart from streamlining your business processes, CRM systems provide you with a wealth of data known as CRM metrics. Why are these metrics vital your company’s bottom line? They help you measure CRM success and the performance of different business units. You can use this data to shift your company in new directions, design loyalty programs, and even develop new products. Knowing how to use CRM success factors can boost sales in the short-term and transform the way you use your system. Before diving too deep into the usage, make sure you know the key CRM metrics to achieve CRM success. If you’re looking how to measure CRM effectiveness, look no further. Here are 5 CRM metrics to measure the success of your system.
1. Customer retention rate
To put it simply, your customer retention rate indicates the level of customers making repeat purchases. Since acquiring new business cost five times more, companies prefer repeat sales from existing clients. Depending on the industry, retention rates tend to stay in the ballpark of 20 to 25%. This CRM metric compares the number of customers at the beginning of a period vs the end (i.e. a year).
On the other side of the spectrum, you will find the churn rate. This rate measures a loss of subscriptions and renewal services. The good news is, CRM systems calculate both these metrics for you. While the customer retention rate is a good high-level metric, you should also focus on the small details. If you notice this rate dropping, look at the whole sales cycle – from the first interaction to the delivery. You can also use this powerful data to roll out a customer loyalty program to increase retention. A CRM system like Pipedrive can help you do this.
2. Client satisfaction level
Without satisfied clients, you won’t see returning business and your company’s reputation is at stake. Client satisfaction level goes hand-in-hand with retention and lifetime customer value CRM metrics. However, analyzing your customer retention rate is not sufficient to determine client satisfaction. A successful CRM strategy to grasp satisfaction is to create an automated survey on your CRM. This gives you an option to gauge your customer’s experience, oftentimes in exchange for rewards.
Apart from analyzing satisfaction, you can actually use a few CRM metrics to increase it. To keep your customers happy, you need to create a positive experience from start to finish. Develop a personal relationship with your customers starting with the initial contact. After the first sale, maintain the relationship by staying in touch with them. Not only will this boost sales, but it also personalizes the customer’s experience. With Salesmate, for example, you can easily toggle between screens to email and call customers in just seconds. Lastly, you can compile data on what your target market wants and use it in a way to cater to your clientele.
3. Marketing ROI
Considering that businesses spend 7-8% of their revenue on marketing, it’s important to visualize the return. A CRM makes it possible to create a link between the marketing and sales department. Every time you generate a new sale, your CRM will store the ‘source,’ which is where the lead came from. In some cases, sales staff will have to enter this information upon completing an order. Some CRMs, like HubSpot, let you create required fields where your customers enter the source.
As long as you can accurately track the source of the lead, you can analyze your marketing ROI. To calculate this figure, take the net return divided by the total investment expense. Once you get your ROI, you can then create benchmarks and discontinue campaigns that are not working. Additionally, you should invest more in the most lucrative campaigns. It’s crucial to audit your lead sources periodically to make sure that the correct data is populated.
4. Customer acquisition cost
The less it costs to turn a lead into a sale, the higher your net income. From the sales pitch to cost per click on an advertising campaign, every factor comes into play. A CRM system gives you the power to quantify everything leading up to the final delivery of the product or service. You can then optimize your expenses to meet a desired gross margin. By tracking your lead sources, you get an idea of what marketing techniques are most effective. Knowing where your sales originate from might be one of the most useful CRM analytics tools. If you actively use your CRM to amend the sales process, you can actually reduce your customer acquisition cost using your CRM itself.
5. Lifetime customer value
Every good business owner knows that a new customer is like gold, if they have a high lifetime value, that is. Since acquiring new customers is undoubtedly expensive, knowing your customer’s lifetime value determines the need for pursuing new clients. With a CRM, you have the ability to assess a particular customer’s spending over a period of time. Should your analysis not be ideal, CRM systems have powerful tools to increase customer satisfaction and engagement. Once you start to pinpoint the lifetime values of your customers, it’s vital that the sales team safely files all documents containing private client information.
Employing CRM metrics during the holiday season
During the holidays, you’re likely running limited-time campaigns to advertise sales and bring in customers. A CRM system is your biggest friend during this time of the year. Using a CRM system, you can suggest Christmas gifts to your customers and create a level of personalization. Not only that, but you also see where your sales and leads are coming from. Don’t necessarily calculate your ROI but monitor your traffic and optimize your campaigns in real-time. If you notice a campaign performing poorly, either cut it completely or make changes to enhance it. Lastly, you can get an idea of your customer’s satisfaction during this hectic time of the year by asking them to complete a survey.
Use the power of CRM data to benchmark your success
If you’re not using your CRM system to analyze trends and other data points, you’re not fully utilizing it. With so many CRM metrics, you have more capabilities than you realize. From putting a number on customer happiness to calculating returns on your next campaign, there are endless possibilities with a CRM system.