The $1,000,000 question: how can one determine ROI for CRM (eCRM, iCRM, etc.)?

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The key to determining ROI for CRM or eCRM solutions is to build an investment matrix based on the following:

Sales Performance Metrics:

1. Specific quantifiable & trackable
2. Blend efficiency & effectiveness indicators
3. Linked to Customer Requirements
4. Linked to Strategy Sales Goals
5. Practical to Measure - Data Collection and reporting
6. Able to influence the desired behavior


Key Definitions:

Key Result Area (KRA): is a critical "must achieve" performance category for an organization.
Key Indicator (KI): is a specific measure which helps determine how well you are performing in a given KRA

Measuring ROI is an eight step process:

Identify corporate KRA's
Link functional strategies to sales process
Map the sub process
Define the management reporting system
Implement continuous improvement process

Identify Corporate KRA's:

Revenue Growth
Margins
Market share
Profitability
Shareholder value
Innovation of new products and services
Others

Link KRA's to Customer

Customer satisfaction
Customer Retention
Share of Customers
Customer Profitability

For more information on CRM ROI, check out searchCRM's Best Web Links on Measuring ROI.

This was first published in April 2001

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