Identifying the Return on Investment of CRM

It can be difficult to identify what return has actually been acheived from implementing a CRM system post system implementation. Key to getting a good feel for the ROI is doing some ground work prior to system installation and even in advance of system selection.

Ideally the project team will have identified the issues required to be resolved through implementing the system prior to choosing the system. The decision in selecting the best system should then have been assessed based on factors including the cost of the system but more importantly the ability of the system to address the issues previously identified. Based on all of this information an anticipated Return on Investment is calculated.

One the system has been implemented, each of the previously mentioned issues is re-assessed. The process used prior to implementing the system is evaluated against the process in place after implementation (remember most IT system functions are introduced to replace or complement existing manual processes). The time saving or extra time taken is calculated in man hours for each function. This is then multiplied by an hourly rate, which may differ between departments but should be based on the relevant wage rate plus relevant overheads.

This gives a good indication of the savings in terms of existing process improvements. Next we need to consider new functions. For example, the introduction of CRM often opens the way for much improved marketing automation. This can be more difficult to quantify since we need some measure of the response to the new procedures. This is where it really depends on the business. For example, a business with a web shop might start a direct mail marketing campaign. There could be a coupon code which the user enters when buying on the website. This would allow for an analysis of the volume of new business based on the new marketing technique. However, bear in mind that starting a new marketing campaign or technique may mean stopping another. So we now need to measure the value of response to the old technique and deduct this from the calculated value of the new one.

This can be a complex area, going too deep may involve a costly analysis which may in fact cost more than the benefit derived from the results. However, it is important to have a reasonably accurate valuation of the benefits in place post CRM “go-live”. Accountability is key.

categories CRM, Finance | admin | September 16, 2009 | comments Comments (0)

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Top Tips for Successful Direct Marketing

Whether it be via e-mail or mailshot, the content of the communication is critical to determining whether it is read or simply dumped immediately. You have two seconds to get the interest of the reader. For e-mail marketing, the subject line is critical, as is the sender name. For letters, the actual content itself is more important. However, in all cases, once the communication has been opened, the next hurdle is to keep the interest so that what you have taken the time to write is actually read. The following points should help:
·         Make sure you get to the decision maker
Does your offer of products and/or services match the needs of the recipient? Don’t make your pitch to the sales department if the CEO or MD is the decision-maker.
·         Get to the point
If you begin your letter with general, hazy information – you risk losing the reader. It’s critical you make your point in those first few lines.
·         Emphasise the benefit
It’s easy to spit out a list of the product’s features. However, you have to remember that the person you are targeting is not interested in what’s “in the box”, but more “what does this do for me?” The well-know drill analogy applies – a customer buying a drill is not primarily interested in the best machine money can buy – they want a hole in the wall as quickly as possible. So advertising the cleanest, fastest, most accurate method of getting a hole in the wall is much more successful than a bright, clean, shiny drill with lots of buttons and switches.
·         Keep it personal
Your communication should be personally addressed and should refer to the business name/sector in the body content. The contact’s first name should appear at least twice in the content.
·         Remember your objective
Direct marketing generates leads. That’s all. You are asking people to put a hand up, “yes I am interested in your product.” You are narrowing down a list of contacts to those who are genuinely interested. Don’t expect the orders to automatically arrive.
·         Keep it simple.
No Jargon. Unless it is a very specific product that you are targeting to a particular group of people, you need to keep the language simple – a twelve year old should be able to follow the text. People have been known to try the letter out on their kids!
·         Use a Postscript (P.S.)
If it’s there, everyone skips to the P.S. If that contains something interesting, there’s a good chance they’ll go back and read the body content.
·         Use short paragraphs.
Readers are often turned off by large gobs of text. Try to use short paragraphs, and bullets and/or numbered lists.
·         Keep it to one page.
One page is enough. By all means attach brochures, adverts, etc. if you wish, but generally one page should be enough to get the message across.
·         Get them to communicate with you.
Give the recipient the opportunity to come back to you. Offer further information, white papers, free draw, etc.
·         Make a deadline.
If there’s no limit on the time they have to act, the probably won’t. The thinking is, “I’ll do that later.” If there’s a discount by the end of the week, then you’re far more likely to hear.
·         Call to action!
There’s not much point in sending a communication if you don’t tell them what you want. “Contact me NOW for this limited time offer…”
·         Customer testimonials.
Nothing can sell your product or service better for you than your existing customers. Select customers you know are happy to give a good testimonial, and make sure that they won’t be put out by the odd phone call (prospects are ingenious at finding the contact details even if you don’t provide them). Don’t be too concerned if they give one or two negative points – every business is run by human beings and it helps to bolster confidence where this is pointed out.

categories CRM, Marketing, Sales | admin | September 15, 2009 | comments Comments (1)

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Dansette