CRM Software: What Are Your Deployment Options and How Do You Calculate Your ROI

CRM Software: What Are Your Deployment Options and How Do You Calculate Your ROI

CRM Software: What Are Your Deployment Options and How Do You Calculate Your ROI

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Home Page > Business > Management > CRM Software: What Are Your Deployment Options and How Do You Calculate Your ROI

CRM Software: What Are Your Deployment Options and How Do You Calculate Your ROI

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Posted: Nov 12, 2010 |Comments: 0
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The business result you should achieve by implementing CRM software is to maximise your people’s productivity and increase the value from your clients and prospects. There are two primary areas that you need to consider in deploying your CRM system – which system do I choose?  Secondly, how can I justify spending the time and money with a credible return on investment (ROI) analysis.

Which system do I choose? The options available to you are an in-house tailored or a web based CRM software solution. If your immediate needs are to interface to other critical systems such as finance, an ERP application or your warehousing application then you would likely be best suited to an in-house tailored solution.

A web based software as a service (SaaS) or hosted solution will give you a quick entry into CRM provided you consider a number of key areas:

You have no interface requirements or very little customisation is necessary. That is “vanilla” CRM is suitable
Your basic needs are to maintain customer contact management and to manage and report on staff activities such as marketing and leads generation.
You do not have the technical infrastructure to run and maintain a CRM system
You are comfortable with data storage and security being held off your premises.

SaaS is able to deliver you a pain free implementation and you get ongoing upgrades. You should also consider your future needs and expected company growth. If there is likelihood that you will bring your CRM in-house, then it would be prudent in your assessment to look at CRM systems that allow you a seamless migration from a web based to in-house customised solution.  However, don’t be blinded by the user based or seat pricing as often times the 5 year cost of ownership can still be quite expensive.

Assessing the return on investment can be difficult. A straightforward way of looking at this is to ask yourself how you want to organize your sales team and make them more productive. Two areas that can be quantified into an ROI are:

By increasing sales representative selling time
By decreasing the sales cycle length

By considering the sales person time you need to put together the facts each of your sales representatives and managers activities including:

The number of leads handled monthly
Average number of deals closed per month
Total transactions per year
Average size of each transaction
Total hours worked per year
Average revenue per hour

As an example a salesman might work 40 hours per week, 48 weeks per year resulting in 1,344 hours worked. Their productivity might be that they handled 20 leads and closed 5 transactions each month resulting in 60 transactions per year. At an average of ,000 per transaction this sales person would yield 0,000 each year and have a productivity rate of 6/hour.

Through your CRM deployment, if each sales representative is 10% more productive by having easy access to all customer related information and reducing the amount of administrative time spent, you can add an additional 135 hours of selling time per year per sales rep. Based on the average revenue this would mean an additional ,000 per year for each sales resource.

In this example, if the sales cycles can be reduced by 5%, then each sales resource can also potentially generate another 3 transactions annually, or ,000.

Therefore for this salesperson the uplift in revenue by having a well defined CRM software business system results in additional revenue of ,000 per year or 15% productivity.

There are other factors that can be included in your return on investment calculations for CRM such as sales management, marketing, customer service and accounting productivity. However, with sales being a direct contributor to revenue you will find that this is a more tangible way to justify the solution you choose.

In summary, your business choices are fairly simple.

How you will use CRM? Do you need to use Outlook, have access to it on a browser or even on your mobile?
How will you get the system – as software or as a service?
Will buy or rent?
Can you change as your business needs change?

At the same time, review your current sales productivity and using these facts create a credible justification to the revenue and profit impact deploying a customer management relationship system will have on your business.

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Antony Dutton -
About the Author:

Antony Dutton is CEO of Aaromba Technologies, CRM software & service management software specialists. Aaromba uses best of breed technology and methodologies, designing solutions to improve sales and marketing for CRM software including Microsoft CRM Software, Goldmine CRM Software and web based CRM software.

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Article Tags:
crm software, microsoft crm software, goldmine crm, web based crm, web based crm software

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