Business Benefits

Benefits of Using CRM

Organisations use Customer Relationship Management (CRM) to improve the performance of sales, marketing and customer service teams and to simplify the management of those teams. Key areas of benefit that companies report benefits from implementing a CRM solution include:

• Increased staff productivity
• Increased profits on sales
• Reduced personnel costs
• Reduced marketing costs
• Reduced integration costs
• Reduced consulting costs
• Reduced training costs.

Companies considering a CRM deployment can expect to achieve their greatest benefits through their utilisation of CRM in the following functional areas:

• Sales lead and client record management. Salespeople can collect leads routed to them from various sources, track prospects from initiation to sale, and maintain information about existing client relationships.
• Customer service case management. Customer support staff can view client account records to determine appropriate service levels, and then track cases from complaint to resolution
  according to company rules.
• Results from Marketing Campaign. Marketing managers can monitor the returns from the individual marketing campaigns and adjust spend according to results.
• Performance and forecast reporting. Sales managers can keep tabs on the sales pipeline and can compare success rates across reps, regions, products, or clients. Customer service managers can view open trouble tickets or employees’ time-to-response patterns.
• Process definition and management. Managers can establish forms, workflow rules, and escalation paths all in accordance with company terminology and protocols.

Improved Sales Performance and Management
CRM applications promise to solve problems that many sales teams face as they grow: Rolodexes and spreadsheets have become inadequate for the volume of leads required to make quotas, individual reps unwittingly pursue the same leads — but use different sales methodologies — and managers struggle to control and coordinate team efforts. For companies plagued by problems like these, CRM provides tools for sales forces that can enable them to do their jobs more efficiently and more effectively.

A number of features within CRM application offer potential productivity gains to sales teams. The contact manager enables salespeople to find and update contact information more easily than they could with a system based on paper or simple desktop spreadsheet. Easy access to the entire history of interactions with a given contact or client also reduces the odds that salespeople will make a call that they, or someone else, have already made — rework that not only wastes time but also erodes customer trust. Automated lead routing helps inside sales staff hand off qualified leads much more quickly.

The off-line capability of the CRM client lets outside sales recoup hours of productivity formerly lost to travel time.

Optional integration with Financials/ERP application further enables quick quote generation and inventory verification. Changes like these all reduce the cost of selling and contribute to the ROI from a CRM deployment.

Sales managers can realise their own productivity gains. CRM’s workflow editor and administrative tools makes it relatively easy for them to define the workflow rules and user access profiles that push leads to the right salespeople and that enforce specified sales processes. This means less time hounding sales staff, policing policies, and remedying errors — leaving more time for truly productive efforts.

To calculate the value of productivity gains, companies should identify which tasks can be accelerated, how many employees perform those tasks, and how often they perform them. We also recommends that a correction factor — 50 percent is a reasonable standard — be applied to any time-savings estimate before it is multiplied by the hourly, fully loaded cost of labour.

Key returns from improved sales performance and management include the following:

• Increased salesperson productivity
• Increased sales management productivity
• Decreased cost of customer acquisition
• Increased revenues (increased profits on revenues)
• Decreased administrative overhead
• Reduced employee training costs.

Improved Customer Service Operation and Management
CRM also addresses the needs of customer service departments, enabling service staff to resolve client issues with less time and effort, and helping them satisfy customers in ways that lead to repeat business and increased revenue.

Customer service teams can expect productivity gains that parallel those enjoyed by sales groups. Because the system’s query and search functionality provides fast access to customer records, reps in the call center can respond more rapidly to customer concerns.

A simple knowledge base helps teams leverage their shared expertise to resolve customer problems quickly. Direct access to the product catalog can likewise accelerate case resolution. Workflow rules that automate case routing not only ensure that service requests don’t fall through the cracks, but also saves reps the additional time they now spend finding “the right person” to address problems that demand special expertise. Contract access helps reps determine which customers deserve higher priority and more time. Ultimately, changes like these can enable a company to serve more customers without having to increase staff, or to serve the same number of customers with a smaller staff.

Enabling service staff to give customers better answers faster can lead directly to revenue gains. Nucleus has found that the use of a CRM solution can boost customer renewal and repeat sales rates when coupled with effective service policies — thereby not only saving money that would have been spent to acquire new customers, but also locking in repeat customers that tend to increase their orders over time. The resulting increase in profits experienced by individual companies will vary based on the typical order size of new versus repeat customers, and on product profit margins.

Key returns from improved customer service operation and management include the following:

• Increased employee productivity
• Decreased personnel costs
• Decreased cost of sales
• Increased revenues (increased profits on revenues)
• Decreased administrative overhead
• Reduced employee training.

Improved Information Analysis for Decision Making
CRM’s data analysis and reporting applications can also have a positive impact on the company’s bottom line. They not only reduce the time needed to analyse data and generate reports, but can also increase profits by furnishing more accurate reports to decision-makers with greater speed.

The reporting tools bundled into CRM applications can increase staff productivity by significantly reducing the time required to create reports. This will apply to report processes that analyse data like sales staff performance, lead generation, customer trends, and service requests. To develop similar reports from isolated spreadsheets kept on each employee’s desktop requires several more hours per report, and creates many more opportunities for errors that need to be checked and addressed through time consuming manual efforts.

With accurate reports quickly in hand, business managers are in a position to make better, more profitable decisions. Sales directors, apprised of surges in demand for particular products, can alert salespeople to look for cross-selling opportunities. Directors can also redistribute sales staff to take advantage of spikes in regional demand. By the same token, whenever demand for a given product falters, or sales prospects shrink, managers can instruct the back office to scale back inventory replenishment and supply purchasing. Thus, companies will realise returns in the form of increased profits on sales and decreased spending on inventory.

Rreporting features in CRM solutions can also help marketing groups spend less. By plotting and comparing the success rates of specific direct marketing campaigns and trade shows, marketing directors can stop paying for programs that don’t pay off. The money saved becomes working capital — an opportunity to increase investments in efforts that have reliably led to new revenue in the past, or to try out new programs.

Key returns from improved information organisation and access include the following:

• Reduced report creation time and administrative overhead
• Increased profits on revenues
• Reduced inventory costs
• Increase in working capital
• Reduced marketing costs.

CONCLUSION
CRM solutions enables sales and service groups to acquire customers, to sell to accounts, and to resolve client service requests more efficiently; if coupled with effective sales and service programs, it may also lead to increased revenue. The core application organises and facilitates access to customer information. Its workflow and rules definition tools allow business managers to reinforce and to automate successful sales and service protocols. Data analysis and reporting functionality supports improved decisions in areas like resource planning. On top of those key benefits, CRM can also ease burdens on IT personnel by simplifying integration, development, and system administration.

Companies whose representatives currently keep lead and customer information using combinations of card files, isolated spreadsheets, and carbon-copy trouble tickets are likely to see the greatest returns from deploying CRM.

Other companies that already have a simple off-the-shelf CRM package or a homegrown solution will likely achieve positive ROI, too, thanks to a simpler interface, simplified integration with external data sources, and broader functionality.