CRM Metrics : What To Measure In The Performance Of CRM

By May 20, 2020 CRM

We have already established that customers are the real reason any business is going to stay in operation. You need to cultivate a solid relationship with your customers and that is where Customer relationship management (CRM) comes in. A metric is simply something you can measure. CRM metrics help track performance and ultimately success.

CRM performs data analytics to map patterns and predict trends, line up leads, improve efficiency, and track customers. And given that salespeople have been collecting information about their clients, it helps streamline the entire sales cycle. The CRM Metrics are already in motion.

The most difficult part of integrating your system with CRM metrics is deciding to adopt CRM. Going forth, it is a smooth ride. Salespeople often see CRM as another tool, as more work and just another way for their bosses to keep track of their work.

Metrics give you better control over your sales and marketing effort. Metrics allow you to track performance more closely than a seat-of-the-pants approach. By following what is happening more closely we can react more effectively to what is going on and how it affects our overall performance. Metrics give precision to our sales and marketing, allowing us to respond with rapier-like precision to changes, or to initiate changes.

There are many different metrics for CRM success. Which ones you choose to adopt depends mainly on your sales and marketing goals.

CRM is not about technology. CRM can help you track success, but it does not work independently. It feeds on data, provided by manually and goes forth to do monitoring of what is going on in your organization closely, CRM can help steer you along the appropriate path, but ultimately your success depends on the efforts of your marketing team.

Related: Reasons why Small and Medium Enterprises (SMEs) need CRM

List of CRM Metrics That You Should Measure

1. Up-Selling And Cross-Selling

It is easier and makes more business sense to sell related products and services to already existing customers. Imagine going through the same hassle of getting fresh clients every time for your products – yes, that’s cumbersome. These CRM Metrics will tell you if your salespeople are selling to existing customers additional products and accessories.

2. Referrals

CRM Metrics well help you determine the rate at which referrals for your services and product are being made. A happy customer can easily refer others to you for business.

3. Rate Of Renewal

This is the measurement of business growth and the acquisition of new customers. For any subscription-based business, the strategy works for measuring the percentage of the customers. These customers are most likely to upgrade their contracts at the end of every month.

For example, if you are executing a business that has 100 customers at the start of the year, and only 95 renew their contracts, the rate of renewal will be 95%. It’s a very easy metric to measure CRM but highly effective for organizational success.

Those organizations with a rapid success graph are acquiring this CRM metric for getting valuable business returns over some time.

4. Customer Lifetime Value (CLV)

This is the estimated amount of money an individual will spend throughout their relationship with your company.

To calculate CLV, multiply the average annual profit you make off of customers by the average retention time per customer. Then, subtract the cost of acquiring the customer (CAC) to find your CLV.

This metric helps you discern how to better invest in your existing customers to increase their value over time, since acquiring a new customer costs 5x more than retaining an existing customer.

5. Length Of Sales Cycle

This metric measures the amount of time from when a lead is first identified to the time that the sale is closed. Depending on the type of enterprise, this cycle could be anywhere from the same day to weeks or even months. The goal when coaching to this metric is to shorten the sales cycle, thereby allowing your salespeople more time for cultivating additional prospects.

6. Sales Closing Rate

It’s important to know how many prospects are turning into actual sales. This metric tells you how successful your sales team is at closing deals. Of course, the higher the better, and hopefully it increases over time. Looking at this metric for each salesperson will allow you to coach each person individually to have the best success.

7. Time to Recoup Customer Acquisition Cost

This metric indicates how long it takes to pay back the cost of acquiring a customer. This number also differs a great deal by industry and pricing model.

To find this figure, divide the CAC by the margin-adjusted revenue per month for the average new customer. The resulting number will be the number of months required until a payback.

8. Customer Value

The customer is king – cliche but relevant. Therefore, there are two metrics that you should pay attention to regarding customer value: the value of the individual customer and the value of your average customer. Knowing what a customer is worth to the company gives management sufficient information to make good decisions regarding things like logistics, productions, personnel, and other business expenses.

Conclusion

When you set out to make measurements, the results are set to be good after a while. CRM Metrics are essential to assess how you’re doing in your marketing and sales efforts. Use them in your business as a cornerstone for a better way forward.

 

MonkeyPesa joins the industry of Customer Relations Management with a ready-made CRM Software that helps streamline everything from Leads to Deals, Accounts, and contacts.

MonkeyPesa is genuinely built for Sales teams. It is simple but well streamlined and organized.

This CRM Software allows for the integration of services like Email Marketing, SMS, and Social Media marketing and customer support, all in a single business system.

You can contact us on or by a phone call or WhatsApp +256757537658

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