Measuring CRM benefits for your business


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Understanding CRM benefits and most importantly the return on investment can be tricky. KStar Associates has helped a number of companies in this area by assessing CRM benefits across the full value chain & working with management to understand which key 'value levers' they want to focus upon to drive most value.

Customer Relationship Management Crucial to Business Success

By optimising a CRM system to your full advantage, you can achieve outstanding business success. This may be tricky especially if there is a lack of understanding of CRM system capabilities. That's why clients approach us to hire a specialist CRM consultant.

KStar Associates is a renowned CRM Consultancy firm in the UK and Germany. We help you assess CRM key value levers that impact revenue growth, cost and operational efficiency. We provide you quality advice on how to use CRM to its full potential for profit maximisation that leads to business success.

Understanding your organisation's value levers

While all businesses are different in their own right, most share the same value levers in terms of revenue growth, operational efficiency, cost reduction, and governance & audit. All these areas ultimately aim to serve the most important lever which is that of profit maximisation. If implemented correctly together with clearly defined processes, CRM has a number of key benefit drivers across all four levers.

 

KStar CRM Value Chain

As part of any system deployment, we recommend taking time to form a detailed value chain of your company to understand how for example the implementation of a system can help increase sales effectiveness (Revenue growth), or allow for greater automation to enable resources to focus on higher value tasks (Cost effectiveness) etc. In developing system proposals, we usually find the best place to start is by looking at financial and operational data held by the company. There is usually a treasure trove of insights available that will allow specific measures and metrics to be applied against each benefit driver. Another benefit usually gained by financial data is seeing where most of a company's costs are, how the revenue is split by customer or product area, % of product recalls / refunds, etc. Depending on what the data together with insights from senior management show, a company should have a good starting point to understand which top 3 areas of the company to focus on to achieve maximum benefit from the deployment of a system. This usually kicks off process analysis which digs a layer deeper by working with stakeholders in a business to very quickly understand what the as-is process for doing certain activities (e.g. Sales process, Service process) is and identifying areas of inefficiency where using a system would help. By applying indicative timings to key steps within the defined processes, it is then possible to quantify the exact time / cost savings that a system would bring in terms of cost effectiveness & operational efficiency. Defining processes also help formulate much stronger governance and audit capabilities for a company as it effectively identifies information flow and where system touchpoints can be introduced to ensure greater visibility for reporting and tracking of business activity. For revenue growth, this becomes much more subjective and reliant upon market research and insights from senior management for driving improvements in sales effectiveness, channel offerings, customer insights, pricing analytics and conversion.

Typical CRM benefits observed

From working with companies, our own experience has been that 10-20% increases in revenue are achievable with CRM by enabling streamlined sales and service to customers. It allows companies to open up their service offerings across multiple channels and develop stronger relationships which in turn provide greater customer insights from collected data that is tracked by the system. The automation and increased collaboration can also provide up to 40% reductions in an average sales cycle while increasing productivity by 30% depending on industry. The key however is ensuring a clear set of processes that link system requirements back to a company's value chain. A popular CRM solution is Microsoft dynamics which allows for modules to be added for additional functionality covering sales, marketing, customer service, finance, supply chain, reporting and HR. Depending on existing systems that a company has, it's often possible to simplify the IT infrastructure by having everything streamlined through a single CRM platform. The benefits of this can be significant from reduced capex in supporting multiple systems, user licence and hosting costs. IT costs can usually be reduced by 10-20% in this area with a further decrease in maintenance costs depending on current systems in place and to what degree CRM replaces existing IT systems.

Measuring CRM benefits

Typical system implementations can take from 3 months to 18 months to analyse, design, build, test and deploy depending on the size of the business and scale of the system. During this period however there will be capital expenditure involved in having the solution developed. The CRM consultant and system integrator should be able to provide a fixed view on costs, which together with internal estimates on existing costs / potential for process improvements should enable management to come up with a view on projected internal rates of return. We usually advise clients to seek a minimum 20% annual return from investing in such a project with a clear plan on benefits realisation that can be tracked during once the system/processes are operationalised; this should tie back to your value chain and specific levers that you are looking to target.

By carefully assessing potential benefits across your company's value chain and then using process optimisation and solution design around it, it is possible to drive business improvement while maintaining a healthy return on capital to shareholders.

Customer Relationship Management Crucial to Business Success

By optimising the CRM system to your full advantage, you can achieve outstanding business success. This may be tricky especially if you lack understanding of the CRM system. Therefore it is advisable to hire an experienced CRM consultant.

KStar Associates is a renowned CRM Consultancy firm in the UK and Germany. We help you assess CRM key value levers that impact revenue growth, cost and operational efficiency. We provide you quality advice on how to use CRM to its full potential for profit maximisation that leads to business success.

If you have questions on this piece or wish to discuss how it could work within your organisation, please do not hesitate to reach out and contact us for a free no-obligation chat. We're always happy to help.