13 May CRM Mythology: how to measure the value of customer relations
CRM adoption is surrounded by numerous myths.
Do we really need a CRM platform? Will the investment pay off? Look, we’re doing just fine!
With Salesforce we have supported transformation of many businesses, helping them to unlock productivity and streamline business operations.
Let’s take a look at the most frequent questions on the way to better business management practices.
Myth: We don’t need a CRM platform!
Do you make commercial offers to your clients? Do you employ a calendar to organize your tasks for the week? Do you share meeting minutes and other important information? Do you follow up on the task assigned to you and your colleagues?
Congratulations! You are already employing a DIY CRM platform.
Yet your business information is spread across different work organization tools – a calendar app, email client, Excel sheets and even a good old notebook.
So far so good?
Companies start employing a centralized CRM tool when they outgrow this do-it-yourself approach, want to make work more efficient, improve information sharing between different departments, ensure better customer services or increase sales.
CRM deployment is part of ‘business adulting’ – a step up in management quality, along with quantifiable goals that the company aims to achieve with a CRM platform.
Myth: CRM is required only for large enterprises
According to software review platform Capterra, 65% of companies start using a CRM platform in the first 5 years of business. Even startups are advised to employ a CRM sooner rather than later.
A holistic approach to customer relationship management makes day-to-day company operations much easier. Sales, marketing, service center – every customer facing department can utilize superb relationship management as a competitive advantage.
Every sale or recurring customer contact produces a new datapoint for the ‘information bank’ of the company. Centralized process management helps to properly store and utilize this information for the very start of a company’s operations.
CRM also helps to define and clarify business processes. The earlier these processes are ‘set-in-stone’ (or – in a CRM – in this case), the easier it will be for a business to grow and avoid the associated growth pains.
Finally, most CRM platforms offer flexible pricing tiers, enabling even small startups to adopt a cutting-edge CRM for an affordable price.
Myth: Will my CRM investment ever pay off?
According to a customer survey, companies recorded an average 29% increase in sales after Salesforce deployment. CRM also increased the probability of winning new clients by three times.
Salesforce research indicates that a 1 Eur investment in CRM creates a return of 7.24 Eur in added value.
Yet CRM ROI can also be calculated by other sales unrelated metrics.
For instance, 30% of sales managers devote more than an hour per day for manual data entry and various reports. Salesforce automatically links emails, calls, meetings, proposals or salesmen notes with a particular customer account.
The platform also provides different reports, even including powerful sales forecasting tools. All these features are aimed at reducing manual work of salespeople so they can focus on higher value tasks.
Salesforce tools also help to reduce the workload of a call center by creating self-service platforms or online knowledge banks. Simple information sharing between different departments help employees to solve more service requests at the first point of contact.
Salesforce marketing tools allow to optimize new customer funnels and evaluate different channel efficiency.
To summarize, CRM return on investment is not only measured by increase in sales. CRM also improves employee efficiency, better utilization of company resources, and improves the overall customer experience.
Myth: How to evaluate customer experience?
According to Salesforce, the value of a loyal customer is ten times bigger than his first purchase. Companies have a 60-70% chance to make a second sale to their current clients, while the probability to sell to the new ones is only at 5-20%.
The value of customer experience can be simply determined by the company’s ability to retain customers and produce recurring purchases. Salesforce sales and customer service solutions help companies to achieve these goals.
Many companies employ NPS (Net Promoter Score) metric to evaluate customer experience. This score indicates what share of clients would recommend company’s services or products.
A customer needs at least 12 positive touchpoints to compensate for a single negative one. More than 90% will outright leave a company instead of writing a complaint. Finally, 62% of disappointed clients are likely to share their sentiment with friends. These numbers yet again showcase the importance of customer service.
Yet there is a silver lining. 72% of customers were likely to share their positive sentiments as well.
Superb customer relations not only reduces customer churn, but also increases the share of loyal customers, helps to produce recurring sales and make use of positive customer feedback.
Myth: Is CRM a silver bullet solution for all my business pains?
CRM is a great multifunctional tool to manage business processes. CRM deployment begins with an audit of business processes. Initially current business processes need to be structurized and defined, before adapting the CRM tool to digitize them.
As a telecommunications company you want to onboard customers faster and efficiently plan resources and materials for service installations? Want to solve more service requests at the first point of contact? Or to identify recurring sales opportunities for your current customer base?
Clear business goals will help your company to define realistic CRM expectations and return on investment.
So will a CRM platform automatically solve all your business issues?
There are plenty more fish in the sea. CRM will not automatically bring you the largest one.
Yet the CRM platform will provide company employees with the best tools for fishing, will help to define where and what to fish, and help to transform your employees into the best fishermen.