In my last post I referred to a study done by Forrester research. The study dealt with three major areas that a CRM solution addresses; sales, marketing and customer service. The study showed where the return on investment could be found and shared percentages of gain in each category discussed. But how do these percentages actually translate into money saved and or revenue grown?
Let’s apply the findings of the study to a company and find out. Acme Products has annual revenue totaling $35,000,000. They normally realize a 20% profit from revenue. They currently do not use a CRM solution but are interested in what it would do for them financially. They employ 14 outside reps and 4 inside salespeople. In addition they have 3 administrative people in sales. They employ 3 fulltime marketing people and have 2 admin people in marketing as well. The customer service department consists of 5 CSR’s and 2 administrative employees. Outside reps average income is $80k and the inside reps earn an average of $45k. The marketing people earn $60k and the CSR’s earn $40k. All administrative people earn an average of $30k. Let’s apply the findings of the Forrester study to this company.
Productivity Gain 4.5%
- 14 sales reps X $80,000 income = $1,120,000. X a 4.5% gain in productivity means a savings of $50,400
- 4 inside reps X $45,000 = $180,000 X 4.5% productivity gain means a savings of $8,100
- 3 Marketing reps X $60,000 income = 180,000 X 4.5% = 8,100 gain
- 5 CSR’s X 40,000 income equals $200,000 X 4.5% = $9,000 gain in productivity which translates to money saved.
Potential savings because of gained productivity with CRM implementation $75,600
Profit Gain 4%;
- $35,000,000 in sales X 20% profit margin = $7,000,000 profit X 4% increase = $280,000
Estimated increase in profits gained by implementing a CRM solution $280,000.00
Reduced Cost 3.5%
- 7 Administrative support people X $30,000 income = $210,000 X 3.5% = $7,350 in reduced admin costs
Estimated reduction in admin expenses with a CRM implementation $7,350.00
The total estimated CRM ROI for Acme Products $362,950.00
There are also intangible areas of savings and revenue growth areas that are not as easily measured. One of the most obvious ones is in customer retention. It takes a lot more work and expense to find and develop a new customer then it does to keep a current one. A CRM solution like Microsoft Dynamics CRM is designed to assist your staff in consistently providing your hard earned customers with the very best service possible. Of course every company that considers a CRM and wants to see what their ROI would be will have different outcomes. Much of the return depends on how well the implementation went and how well the employees adopt the solution. At Beringer our total focus is on providing the best implementation and best user adoption of MSCRM which we truly believe will provide our customers with the best ROI.
Ready to see these productivity gains in your business
Your company should give sales reps the tools to perform their jobs like never before. Beringer Associates is here to help you realize the gains discussed in this article. We would love the opportunity to show you how this could happen in your business.
We are a Certified Microsoft Partner and have been helping clients with their IT needs for more than 20 years. Our services are different from other vendors on the market because we offer personalized assistance for customers by analyzing their unique operational demands and industry needs. Once an IT product is in place, we deliver 24/7 support to address any complications that come along.