measuring CRM ROI

Measuring CRM ROI: How Distributors Can Track the Value of Their Investment

As you consider customer relationship management (CRM) software, it’s crucial to understand the total costs beyond subscription price, as well as the estimated returns for your company.

CRM ROI includes financial cost savings as well as gains that are harder to quantify, such as your ability to close deals faster and identify new opportunities with greater visibility into your customers’ needs. 

You may have heard the frequently cited statistic from Nucleus Research, which estimates that every dollar spent on CRM implementation returns almost $9 in sales revenue. This is based on general research that took place over a decade ago, so it’s more meaningful to look at the costs and estimated CRM ROI for your specific organization. 

Here’s what you should know. 

First: Understand CRM Implementation Costs

CRM software often comes with hidden costs that may not be apparent until after you begin to implement that new solution. These include: 

  • Licensing costs, or fees for adding each new user, which can be upwards of $50 per person per month
  • Custom integration and training costs, which are common when distributors choose CRM software like Salesforce and HubSpot that don’t connect with their ERP system 
  • Data storage costs, which can add up quickly as your company grows
  • Maintenance and upgrade costs, which are more common with on-premise CRM solutions
  • Support costs, typically built in after CRM implementation as a tiered approach with enterprise solutions 

For distributors, the most significant costs tend to arise when they try to tailor a generic CRM solution to their specific needs. That includes the need to show the relationship between accounts and many different contacts or ship-to locations, building integrations to display purchasing history and pricing information, and setting up custom dashboards or reporting capabilities. 

Understanding CRM ROI

There are many benefits of CRM systems from automation and time savings to improved reporting efficiency. Here are a few questions that can help you estimate the impact of what you’ll gain by adding a CRM:

1. What are the cost savings of eliminating software subscriptions?

CRM tools provide a comprehensive solution for sales teams, marketing, and customer support that may allow you to eliminate other software, such as email marketing tools like Mailchimp or Constant Contact, and customer support platforms like Zendesk. 

Take inventory of current software solutions and their yearly or monthly costs. Next, compare the price of the new CRM. It’s likely your CRM solution will cost less than piecemealing software together. This makes CRM software more cost-effective and more efficient for your whole team to use — as long as they can all use it without those additional per-user fees. 

2. How much does your company spend on custom reporting? 

If custom reports require a help ticket to the IT department or the pricing analysis of an outside consultant, you’re not alone. Many distributors face this problem when they either don’t have a CRM or their existing solution doesn’t integrate with their ERP system.

These sunk costs waste time and energy, especially when you consider how many custom reports you’re creating to gain actionable data and customer insights. A CRM built for distributors and integrates seamlessly with your ERP empowers all employees to create, manage, and analyze custom reports. This optimizes and speeds up business processes for sales teams and across all departments. 

3. What sales and marketing tasks could be automated to improve efficiency?

If time is money, analyzing how your employees are spending theirs can make a big impact on your top line distribution sales.

Consider how many repetitive tasks could be relieved through the streamlined automation of a CRM solution. This includes writing numerous emails to each customer or prospect, reporting on marketing campaigns, and emailing other team members who need to take action after a deal closes.

Eliminate the busy work, streamline your sales processes, and watch your CRM ROI skyrocket. Your sales team will also appreciate that they can focus on their skills and what they do best: selling.

4. What hidden revenue lies within your existing customer base?

Without a CRM, it’s difficult to spot patterns and reasons why you’ve recently lost customers. Some churn is inevitable, but a CRM solution like White Cup can highlight at-risk customer accounts so you can proactively address concerns like late shipments or drops in order volume. 

And if you sell products on your website but can’t see abandoned carts or purchases from your eCommerce platform in your CRM, you’re missing opportunities to increase both online and offline sales. 

For instance, your sales reps could reach out to a customer who placed products in a cart but didn’t buy them to remind them to complete the purchase or ask if they have questions. They could also recommend related products based on that customer’s online order history. 

5. What prospecting opportunities are you missing?

While much of your team’s focus is on existing customers, a CRM also helps you market more efficiently to new prospects. Your marketing team can create email campaigns using pre-built templates, test subject lines to optimize open rates, and immediately see who clicked on each email. 

You can also create similar campaigns to increase sales among existing customers and track the return on investment for every activity. 


Make the Most of Your CRM Investment 

Considering these opportunities will help you track CRM ROI. Once you’ve chosen the right CRM for your company, there are several ways to maximize your investment. 

Here are a few recommendations: 

Highlight the benefits of a CRM for your team

When you show your whole team how CRM implementation will help them hit sales targets, improve marketing, strengthen customer relationships, and make them more efficient, you’ll improve user adoption and get better returns overall. Make CRM discussions a central part of company meetings, and take time to celebrate the wins.

Identify metrics that matter

Set specific KPIs your team can track with your customer relationship management software, including company-wide sales goals and individual goals for each sales rep. A CRM with built-in business intelligence makes it much easier to see your progress at a glance. 

Implement workflows

A CRM makes it easy to create workflows to automate time-consuming activities, such as: 

  • Introducing your company and your product offerings to a new prospect 
  • Following up on open deals 
  • Reaching out to customers with declining sales
  • Following up with customers who attempted but did not complete a purchase
  • Sharing monthly or quarterly sales reports with your executive team

These workflows can significantly improve sales productivity so your sales team can focus on having more valuable conversations and forming stronger customer relationships. 

White Cup CRM: A Faster Path to Revenue Growth

White Cup CRM is built for distributors, with everything your sales team needs to be effective from day one. There are no hidden costs that are common among other CRM systems, and there’s significant potential for returns because the CRM includes built-in business intelligence to show your entire team their best opportunities and empower them to act faster.

See why more than 850 companies trust White Cup as the ideal CRM system for distributors. Schedule a free consultation today.

Written By

Helen Pina Profile Image - 5 Biggest Business Challenges You Can Conquer in 2023 with a CRM

Helen Piña

VP of Marketing, White Cup

Helen Piña joined White Cup in 2021 as the Vice President of Marketing. She has 15 years of marketing and technology industry experience and over 20 years of customer-centricity focus. Prior to joining White Cup, Helen was a marketing leader at PROS (NYSE: PRO) for nine years across digital marketing, customer marketing, marketing operations, brand, corporate marketing, content strategy, and partner marketing functions.

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