Crm Software - What Are Your Deployment Options And How Do You Calculate Your Roi

The business result you should achieve by implementing CRM software is to maximise your corporate 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. Firstly, which system do I select? Secondly, how can I justify spending the time and money with a credible return on investment.

Which system do I select?

The two choices you have are an in-house tailored or a web based CRM software solution. If your immediate needs are to communicate to other critical systems such as finance, an ERP application or your warehousing system then you would likely be best suited to an in-house tailored solution.

Software as a service or a web hosted solution will give you a fast entry into CRM provided you consider a number of key areas:

- A "vanilla" CRM will be suitable which means that you will require minimal if any customisation and you do not want to interface into other systems.
- Your basic needs are to manage your customer contacts and to manage and report on marketing activities and lead generation.
- You do not have the infrastructure nor staff 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 receive ongoing upgrades. You should also consider your future needs and expected company growth. If there is likelihood that you might bring your CRM in-house, then it would be sensible in your assessment to look at CRM systems such as Microsoft CRM software that give you a seamless migration from a web based to in-house tailored 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 very expensive.

Analyzing the return on investment can be hard. A direct way of looking at this is to determine how you want to organize your sales team and make them more productive. You can quantify your ROI into 2 areas:

- By increasing sales representative selling time.
- By decreasing the length of the sales cycle.

By considering the sales persons time you need to put together the facts about the activities of your sales reps and managers including:

- The number of leads worked on each month.
- Average number of transactions closed monthly.
- Total annual transactions.
- Average size of each transaction.
- Total hours worked per year.
- Average revenue per hour.

For 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 $10,000 per transaction this sales person would yield $600,000 each year and have a productivity rate of $446/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 $60,000 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 $30,000.

Therefore for this salesperson the uplift in revenue by having a well defined CRM software business system results in additional revenue of $90,000 per year or 15% productivity.

There are other points that can be considered in your return on investment calculations including 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 straightforward.

- How you will use CRM? Do you need to use Outlook, have access to it on a browser or even on your mobile?
- Will you deploy as software or as a service?
- Will you rent or buy?
- 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.