Ask The CRM Expert: Questions & Answers

Measuring the effectiveness of CRM

Measuring the effectiveness of CRM

By  Richard Boardman, Founder, Mareeba

SearchCRM.com

After implementing CRM, how should we go about measuring and evaluating the effectiveness of CRM across our organization? How can we work this into our overall CRM strategy?
The key is to be crystal clear about what you want CRM to achieve. A lot of organizations have a feeling that good things will happen if they buy CRM technology, but that's as specific as they get. CRM technology is a tool -- it won't produce results on its own, you need to work out what you want it to do for you.

Once you are clear on what you are looking to achieve then it's a case of defining the metrics that will help you evaluate performance in this area. So, for example, if the goal is to improve your management of leads, you might identify a range of relevant metrics such as: numbers received, analysis by source,

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cost per lead, cost per sale, lead to sale conversion rates, average time to close, etc.

It's important to note that in most cases your reporting requirements will not be met with the out of the box CRM reports in your CRM system. As your business processes are likely to be unique, you will generally require customized reports to manage them, and these can involve a significant investment of time and money. CRM vendors will probably tell you different, but I can tell from the front-line working with lots of different CRM technologies, extracting meaningful management data can be expensive and time-consuming, and you need to budget accordingly.