Customer relationship management (CRM) can be a complex and costly venture. Yet, many organizations drastically underestimate the total cost of ownership (TCO) of a CRM solution. Additionally, they often harbor unrealistic expectations and miscalculate the real business benefits they expect to achieve. As a result, they often fail to realize a tangible, measurable CRM ROI (return on investment).
Without the ability to justify the time and money spent on their CRM initiative, IT and departmental managers may find themselves with reduced resources and project budgets.
So, what can you do to help your company maximize its CRM ROI?
Set an Accurate Budget
Customer relationship management strategies require large investments in applications, hardware, software, telecommunications, and both internal and external human resources.
Few companies correctly plan for these expenses, and later find themselves scrambling for the needed budget money just as they approach a crucial point in their project. These unplanned costs can minimize CRM ROI, and cause financial executives to view the initiative unfavorably.
Set Reasonable Goals
Many project teams make the crucial mistake of inflating expected CRM ROI in order to build a compelling business case and obtain the needed funding from executive management.
Make sure the advantages you promise from your CRM solution can really be achieved. Whether you’re striving to increase revenue, reduce operating costs, or realize significant process improvements, be reasonable – setting unrealistic expectations will only cause your project to fail in the long run.
Implement Stringent Measurement Processes
Formal processes for tracking and analyzing goal achievement are critical to your ability to prove the value of your customer relationship management implementation.
Have managers and team leaders from your sales, marketing, and service departments establish several key performance indicators (i.e. % decrease in customer churn, % increase in up-sell or cross-sell revenue, % increase in marketing response and conversion rates, % decrease in service response times, etc.) and create a structured plan for measuring them.
Results should be frequently reported back to departmental and executive management, to demonstrate ongoing CRM ROI.
Hold Stakeholders Accountable
A successful CRM initiative often requires workflow and process changes within and across various customer-facing divisions.
Make sure managers from each involved business unit are assigned the responsibility of controlling the impact of CRM-related spending on profit and loss and operating budgets. Additionally, they must be held accountable for ensuring that the needed procedures are put in place to meet goals and realize expected benefits.
Many companies link bonuses to performance metrics, to ensure that all stakeholders have a vested interest in the success of the CRM project.
Keep Total Cost of Ownership Down
In addition to hardware, software, and other technology costs, make sure to include all staff-related expenses, and the costs associated with process restructuring into your initial TCO estimate.
Additionally, developing a formal plan for ongoing implementation, maintenance, and enhancements for your solution can help you eliminate any unexpected costs, minimize your TCO, and accelerate your CRM ROI.