According to a recent study by Nucleus Research, a leading research firm, the return on investment (ROI) from using a customer relationship management (CRM) system is over 700%. The report stated, for every $1 spent on a CRM the ROI has grown from $5.60 in 2011 to $8.71 in 2014. THE BOTTOM LINE: Average ROI is 771%. For 2015, based on the numbers reported, the ROI is closer to an astounding 900%!*
The Internet has Changed Everything!
Historically speaking, CRM’s are expensive, not industry focused, not user friendly, and difficult to learn. In the past several years, the advancement of internet based software means almost everything has changed!
Now, CRM’s are more practically priced, often built for specific industries, customizable, much easier to learn/use, and the best software companies have taken an active role in user engagement. But the most important reason CRM’s have such high returns, is because the ever evolving consumer is demanding a completely different experience than ever before.
Let’s take a look at why and how a CRM can produce such huge returns!
Today, the internet is facilitating more industry focused technology tools and resources at a much smaller investment for businesses of all sizes. Specifically, CRM’s are among those tools which are having the most impact to the bottom-line of small to mid-size businesses.
Why software comes with your own personal IT Support Team
In the world of software, Customer Service is referred to as Customer Success and Engagement and it’s a game changer for small to mid-size businesses! In the past, implementing a software product was a huge undertaking. You not only bought the software program, but you also purchased the hardware (computers, servers, etc.) to run it, as well as, the training and support. You would typically pay for everything with a large upfront fee and then get nickeled and dimed for upgrades and additional training and support. Sometimes you even had to hire someone to manage all this.
Now, you simply access software through an internet enabled device (laptop, desktop, phone or tablet), similar to accessing your email account. Due to various market conditions, ie: subscription model pricing and stiff competition, software companies have a vested interest in making sure the product is used and provides a very clear ROI. Enter the era of Customer Success and Engagement, which to you, means a dedicated ongoing training and support team (your own IT dept.) at no additional cost.
Any software product you are looking at today should come with a dedicated support team to help implement the product, as well as, provide ongoing training and support. If not, you are likely working with an outdated company and product!
A CRM is an absolute necessity when trying to keep up with the modern day consumer!
The Ever Evolving Consumer: Are you keeping up?
The internet has not only transformed the software business, but also, as you know, the consumer. Consumers today, are more informed than ever before. Some estimate that 90% of consumers begin shopping online and a majority of these folks have made their purchasing decision before they ever leave their house. Keeping pace with today’s consumer must be a business owner’s primary focus and that is where CRM’s show their true value and ROI!
A CRM is an absolute necessity when trying to keep up with the modern day consumer! If you disagree, you might be like the frog in the pot of boiling water. You won’t know any better until it is too late.
A CRM will allow you to manage online leads so you can begin your relationship with prospects while they are still making decisions. If you are not connecting with them while they are online or shortly after, you are likely missing out on their business. A CRM will capture these leads so you can connect with the consumer in real time.
Every business owner should be controlling the sales process in their store! How are your salespeople leading prospects through the sales cycle? What kind of service and follow-up are they providing? If you don’t have your finger on the pulse of your salespeople then you are missing out on opportunity. A CRM will help you manage your sales process as well as hold your salespeople accountable.
Finally, a CRM will improve your customer’s experience! In the Jan/Feb 2016 issue of Premiere Flooring Retailer, Benchmark, Inc and the WFCA published the results of a secret shopper study. They shopped 108 top flooring retailers for customer experience related to quote and follow-up and the average experience rating was 41.4 out of 100 points…not very good! Surprisingly, Big Box stores finished higher (45.3) than Independents (39.2). The fact is, customers are not receiving the follow-up and service they want. What are you doing to change this in your business? A CRM will help your salespeople provide a better customer experience, leading them, not following them, through the sale cycle.
If you are still skeptical about the power of a CRM, I have to ask, what are you doing today to grow your business and stay ahead of the ever, evolving consumer? In the March 16th issue of the Harvard Business Review, Frank V. Cespedes and Frank Hamilton say, in their article, Selling To Customers Who Do Their Homework Online, “Profitable growth is determined by how the buyers buy today and tomorrow, not yesterday…”** There aren’t very many business owners who wouldn’t investigate a strategy which studies show can provide a 771% return.
*Based on the Nucleus study, the average annual growth rate is $1.04 per year from 2011 to 2014. All things being equal that means the 2015 ROI is probably around $9.75 or 875%.
**Frank V Cespedes and Jared Hamilton (March 16, 2016). Selling To Customers Who Do Their Homework Online. Harvard Business Review