KPI CRM- Peter Drucker, in his classic 1954 book called “The Practice of Management” said, “What gets measured gets managed”.
When you manage something, you can
- extract observations
- convert them into insights
- use those insights to fuel the growth further
When you have implemented a new CRM system, how do you extract insights and see its progress?
The answer is:
Measure the right metrics.
What to measure when measuring CRM success?
You can write down certain goals in plain English to achieve with your CRM. But the CRM software doesn’t measure your goals for you. You must translate these goals into “Key Performance Indicators” (KPIs).
KPIs can be directly associated with stats/numbers from the CRM.
This section explores the sales KPIs that you must measure with your CRM.
1. Customer attrition
Also known as Customer Churn, this metric measures how many customers you lost in any given period. It measures customer retention in a reverse way. The lower the customer churn the better it is for your company.
For example, suppose you started 2020 with 99 customers on Jan 1st. Then, you bagged 3 new customers each in January and February. You had 105 customers at the end of February.
However, your most productive salesperson quit in March and he took your 10 best accounts with him to his next company. You lost these 10 customers and ended up with 95 customers at the end of March 2020.
So, your customer churn is calculated as given below:
(99-95) / 99
= 4 / 99
You had a customer churn rate of 4.04% in the last quarter of FY20.
2. Close rate
It’s a ratio of the number of deals closed against the number of deals in the pipeline, over a given period of time. It’s the simplest of all metrics and used as a measure of a sales team’s success.
For example, suppose you closed 10 out of 50 deals in your pipeline in a given quarter. This means you have a close rate of 20%.
If the close rate of a certain number of months after new CRM implementation is significantly more than the same number of months before the new CRM was implemented, then your CRM is doing its job of helping you close more deals.