The cost of ownership and return on investment of your customer management relationship solution depends on your requirements initially and longterm. As your business changes, so do your CRM needs.  A well planned CRM software strategy will immediately save you money and time, yet allow you to scale your system as your company grows.

For many companies, a cost of ownership model over a 3-5 year timeframe will give a better return on investment with an in-house tailored system. To justify this however, you need to think out your strategy carefully. One of the key decision points is whether you will need to integrate CRM software into your accounting system or a specialised customer service or ERP system. In this case, although the initial cost of ownership can be quite substantial your return will justify such an upfront investment. The initial costs for example will involve license fees, consulting fees and deployment costs.

Quantifying your ROI can be thought of as tangible and intangible factors.

Tangible factors are easier to quantify. For example, if your sales team can identify new sales and cross-sell opportunities faster and close transactions 20 percent earlier then you can easily measure your productivity increases along with the increase in revenue .

In another example, your CRM lets you run specific marketing campaigns. Segmenting your database and recording client and prospect interests will enable you to more effectively target campaigns. A specific campaign run from your CRM assists ROI per lead to be calculated.  Your return based on actual sales as a result of your marketing campaign can be measured specifically.

The intangible factors can be more difficult to quantify. CRM software enables you to automate your sales and marketing processes. To substantiate gains in productivity you need to be clear in your understanding of your manual processes. For example, many sales people have to develop their own quotations and work on spreadsheets. Others have a sales administrator to assist them. These tasks are time consuming, affecting your productivity and costs.

Firstly you should set up the goals and objectives on intangible benefits prior to the CRM project starting. If your goal is to make your sales team 20 percent more productive, then you need to determine what CRM processes are to be developed to give sales 20 percent more time to generate and close more opportunities. At the same time, if automating your sales processes reduces sales closure rates from 6 to 5 months then your goal is to increase sales by 15 percent.

Customer service modules also can be measured if you reduce your incident rates through better handling, escalation and knowledge. Increasing customer satisfaction by reducing customer complaints will have a positive effect on your revenue and profit.

Automating sales, marketing and customer service can make a significant difference to your bottom line.  You can then use your customer relationship management solution to automate a variety of processes to increase your company’s productivity.

Firstly, understand your needs when thinking about investing in CRM software. This will determine what system, in-house or a web based CRM software solution is right for you. This will also help you determine what CRM products and services are suitable. Your initial cost of ownership depends on this. Secondly, develop your goals and objectives to justify your return on investment. To do this, you will need to be clear on your current sales, marketing and customer service processes and then set the benchmarks you will need to attain to achieve a solid return.

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