Make CRM Analytics Work: Effective Metrics Tracking
After making the decision about implementing a CRM, and actually taking the pains to roll it out, business owners are often disappointed at the effects taking too long to be felt. It often concerns the “deep insight” into company affairs, overall performance as well as detailed account of which campaigns/actions/staff members are most successful, which are not and why. In reality, gathering and storing loads of data without proper analysis hardly does the company any good.
So, to uncover its hidden potential, CRM software needs proper metrics to be set up, measured, and their results - interpreted correctly. A CRM is capable of tracking loads of metrics, and it might leave you clueless as to where to start and which metrics should be paid attention to in the first place. This is what we are going to deal with in this post.
First of all, there are several “typical” sets of metrics that are usually measured for nearly each business. However, if you want the CRM analytics to really work for your benefit, some specific data might be required.
Work Out a Result-Oriented CRM Strategy
So, the following steps are recommended by experts in the field as the best practice for defining which metrics to set up in your CRM system:
Determine your business goals. Ultimately, to gain more profits, you need to either grow revenue or cut down the expenses. Specify, how exactly you plan to achieve it and define the measurable terms for each goal.
Specify your strategies and tactics. Create a roadmap towards your key goals and determine the tactics for key departments, like sales, marketing and support.
Identify appropriate metrics. Each business objective (like, receiving bigger revenue from new clients) should have a corresponding strategy (focus on selling bundled products to them) and metrics to measure success (like, average revenue per sales representative and average deal size).
The strong point of this approach is tying the metrics and the overall company strategy, rather than measuring the traditional KPIs without connecting them to the business objectives.
Important Metrics to Track
Working out the effective CRM strategy takes time and efforts, and is not so simple to implement, especially for companies just getting acquainted with their new CRM. So, we would like to attract your attention to the most effective metrics that definitely should not be omitted, whatever approach to CRM strategy you take.
Customer values - this metrics is the most important and the most difficult to calculate, too. It includes the following:
Customer lifetime value (LTV) - this helps discover an overall profitability of a customer by determining not only the revenue brought by their purchases, but also time and efforts spent for engagement. There are actually two different values here: the value of individual client and the value of an average customer. This metrics helps improve marketing campaigns by discovering sources and types of the most profitable clients, and directing efforts on their acquisition and engagement.
Customer satisfaction - traditionally measured using polls and surveys.
Customer retention rates - according to experts, these should be measured in each particular customer segment, due to customer values differences across segments. 60% retention rate is said to be a good indicator, but again, everything depends on the business specifics.
Funnel drop-off rate - this metrics helps find out how many prospects are “lost” in the funnel on their way to a sale. For instance, this metrics shows how many prospects unsubscribed from the newsletter, how many read the emails and end up becoming customers. This information helps identify the stumbling blocks within your sales funnel and address these problems to improve sales efficiency.
Actions per engagement - this metrics helps analyze how often prospects respond to attempts to engage them. This allows discovering a sort of pattern to know how many times a client needs to be reached out before buying. It is also an important indicator of the threshold beyond which customers typically stop replying or unsubscribe. This data can help make the sales cycle more efficient.
Response time - the KPIs for this metric are especially relevant for companies using a lead-generation form or something similar. The point is, the time it takes you to reach out to prospects may seriously influence the conversion rate. Therefore, it is important to monitor what response time is the most effective for generating the maximum number of successful sales. Relationship freshness - this metrics can uncover a hidden potential of staying in touch with your clients. In other words, it means tracking the last interaction with each customer. By simply taking steps to maintain a relationship with your clients and reach out to them at the right time you might be able to grow the revenue and customer satisfaction levels.
Read our FREE whitepaper here CRM Analytics Workshop: Set Up Effective Metrics
Let’s talk about how we can work together.
Being able to set up and monitor the right metrics is crucial to ensure business growth. It provides an all-round view of your customer relationship management and sales effectiveness, helping to find ways to improve user experience and win more loyal customers.
The metrics described above are just a few of the useful ones that are recommended and popular among successful businesses. Nevertheless, it is your industry, type of business, and objectives that should be determining the CRM analytics strategy, and correspondingly the metrics and KPIs to track.