You’re up to your ears with all the data your CRM system collects. You have so many options for slicing and dicing your data you don’t know where to start.
Here are six key CRM metrics that provide valuable insight into your business.
Sales are the lifeblood of every business. Unless you have hordes of prospects beating down your door every day, the sales call is a key part of your sales process. Sales call volume needs to be measured.
Each salesperson needs to know how many calls they’re making. Your sales manager needs to know how many calls are being made by each individual and by the team. These call volume numbers form the basis for metrics that are even more useful.
You can determine the average number of sales calls per sale. You can track sales calls for different time periods and identify trends. You can see who might be rushing to get off the phone and who isn’t pulling their weight. You can calculate the productivity gains from implementing a new CRM system or tweaking your sales process.
Sales Closing Rate
Your close rate is a simple but powerful metric that determines sales effectiveness. It’s a measurement of how many leads were converted to customers for a given time period.
No matter how outstanding your close rate is, there’s always room for improvement. And improving your close rate increases profits, sometimes dramatically.
Calculate close rates for each of your salespeople. Examine the success and failure rates at every step in your sales process. Look for patterns.
What are your best and worst lead sources? What are the most common objections and reasons for winning new business?
Knowing how often your prospects become customers is critical for strategic decision making in all areas of your business. If your sales team isn’t closing deals at an acceptable rate, that could mean changes to your staff, your sales process, your marketing, or your product are needed.
Length of Sales Cycle
How long does it take you to close the sale from the time you first identify a prospect? Knowing your average sales cycle helps you:
- Create accurate sales forecasts
- Project revenue
- Measure sales performance
- Identify areas for improvement
Whether your sales cycle lasts a few days or several months, you’re probably going to want to shorten it. By monitoring the length of your sales cycle over time, you can see how changes to your sales process or other areas of your business impact your time to close.
Customer Retention Rate
Conventional wisdom states that it costs significantly more to land a new customer than it does to retain an existing one. So there’s value in keeping your customers coming back. That makes it important to measure how successful you are at maintaining relationships with your existing customers.
You can measure your retention rate by subtracting the number of new customers you acquired for a given timeframe from the total number of customers you had at the end of the period. Then divide by the number of customers you had at the beginning of the period to get your customer retention rate.
Once you know your client retention rate, you can work on improving it. Your CRM system should capture not just wins and losses but also the reasons for those wins and losses.
What were the contributing factors for your losses? What patterns emerge?
Understanding why some customers stay and others leave will give you actionable intelligence you can use to grow your business.
Lifetime Customer Value
You can determine what a customer is worth to you based on customer spending and the length of time a customer stays with you. You can break it down further and look at the value of each individual customer as well as the value of your average customer.
Determining how much each of your customers contributes to your bottom line can be an eye-opening experience. But it’s one that has to be done.
Understanding your lifetime customer value allows you to prioritize. You can focus your efforts toward retaining your most profitable customers, finding new customers that fit the patterns your best existing customers display, and mining your best sources for lead generation.
Marketing Campaign ROI
The dollars you spend on marketing are not all equal. Your customer acquisition costs by channel can vary widely. You need to stay on top of the rate of return for your marketing investments.
Which campaigns or events brought in the most leads? How many leads converted to customers? How much revenue did those customers generate relative to the cost of the campaign?
You’ll need this information when it comes time to set your marketing budget and to steer your future marketing efforts.
There are several CRM metrics you need to pay attention to in order to keep your business growing. Everyone from the C suite to each salesperson should know what it takes to find a new customer, how much that customer is worth, and how well you do when it comes to retaining that customer. A good CRM system makes those numbers accessible.
If you’re looking for an easy to use CRM system that puts your most important data right at your fingertips, sign up for a free Salesnet demo today.