What is the ROI of a CRM system?
There’s a statistical report prepared by a non-profit organization that every penny you spend on CRM, you get x9 returns. According to a study by Nucleus Research, a research firm, return on investment (ROI) of using a Customer Relationship Management system is a whopping 700%. In simple words, for every dollar you spend, CRM will give you the ROI of $8.71. This ROI is on track to grow more in recent years.
Going by the history, CRMs have been expensive, difficult to implement and not business friendly. In recent years, the advancement of the internet and software has paved the way for user friendly and practically priced CRMs. Now, CRM systems are being built with industry specificity in mind, they are more customizable tailoring the needs of every business and much easier to use. Ever increasing consumer demand has propelled the need for CRM even more.
Customer Engagement and Success is a game changer for every business. For customer success, CRM is a game changer. A proper CRM is an absolute necessity when trying to keep up with the modern day customer.
If something is improving your customers’ experience multifold and at the same time giving a huge ROI to your business, then why look anywhere else? In the early 2000s, the CRM market was very scratchy and in a toddler stage with very few competitors, but it has gained a lot of momentum in recent years. As the market continues to grow, CRMs are only becoming more cost effective. In the early 2010s, CRMs paid back maybe a dollar or three in return for every dollar spent. According to the 2016’s forecast, it is set to triple the previous measured ROI by early 2020s.
Calculating the exact ROI can be quite complex as it involves a lot of factors. It’s not just limited to cost factor but extends beyond that. Overall revenue, cost per lead, time saved, resource utilization, effective use of a CRM system, sales/marketing/service metrics, collaboration and productivity can be some factors. Let’s say your business is generating a revenue of $50,000 but your overhead costs like software and hardware, IT support, wages are costing you $45,000 in which case your profit is just $5,000. The CRM implementation in your business can not only cut these costs by almost half but also increase the revenue and gather everything at one place.