What CRM metrics should your company track?
Below I break down the top objectives every small business owner should consider.
Let’s take a look!
CRM Business Performance Metrics
Business performance metrics track various data types, including the following:
- Sales pipeline
- Sales performance
- Average sales cycle
- Customer retention cost
These important CRM metrics track a company’s overall performance and progress toward its goals.
As you will see, most of these metrics are sales-based.
Business Performance Metric Examples You Should Be Tracking
Below I’ve compiled four critical business performance metrics your small business must track.
Observing these metrics helps measure CRM success and encourages higher sales.
Still trying to figure out how vital CRM metrics are? Let’s dive in!
1. Sales Close Rate
The sales close rate is the percentage of sales leads and outreach efforts that result in customer conversions and sales.
Further, this rate measures the ratio of closed deals to sales contracts.
Sales close rates are critical to analyze because they indicate the value of sales methods and marketing strategies.
Put simply, this important sales metric ensures your company isn’t spending too much on acquiring new customers!
2. Length of Sales Cycle
The length of the sales cycle measures how long it takes to close a deal.
Additionally, this metric helps explain the time necessary for lead nurturing and customer engagement.
When observing your company’s sales cycle length, you want to strive for a shorter cycle as they indicate more efficient processes.
This metric is among the most important sales metrics because it ensures your team identifies and pursues the right leads!
3. Customer Retention Costs
Customer retention cost (CRC) is how much your company spends on maintaining existing customers during a specific period.
In simpler terms, the customer retention rate tells you how much your team spends on marketing costs or investments to improve customer loyalty.
Why are customer retention efforts significant?
It is cheaper for a business to sell its products and services to repeat customers rather than acquire new customers.
Therefore, aiming for a higher customer retention rate is essential to save money!
4. Customer Lifetime Value (CLV)
Customer lifetime value (CLV) is the total amount of money customers spend on your company’s products or services during their time as a customer.
Further, this metric helps measure customer loyalty and indicates how much revenue your company can expect from existing customers over time.
What do I mean by customer lifetime value? Let’s look at an example:
A customer spends $100 monthly on products or services for 12 months. In this instance, their total customer lifetime value equals $1,200.
Sales metrics like customer lifetime value indicate why your business MUST build strong customer relationships.
When customers enjoy their shopping experience with a business, they’re likelier to return to buy more products and recommend the brand to a friend!
CRM User Adoption Metrics
CRM user adoption metrics focus on how a company utilizes its CRM software.
Some user adoption metrics include the following:
- How employees use the technology
- The number of employees actively using a CRM system
- Aspects of a CRM that employees don’t use
One of the leading reasons companies abandon their CRM is the lack of use. While this is a significant hurdle to overcome, it results in productivity, more sales, and higher customer satisfaction rates.
Therefore, focusing on high user adoption rates is critical for long-term CRM success!
User Adoption Metric Examples You Should Be Tracking
How can you measure CRM effectiveness and user adoption?
Below I’ve listed four simple yet revealing metrics that observe how employees utilize CRMs. Let’s look closer!
1. Users Logged in the Last Seven Days
One metric you should track is the number of users logged into their CRM accounts within the past seven days.
This metric shows how many people on your team actively use the CRM technology and do the bare minimum (logging in)!
Reach out to the employees who need to log into their accounts and see why they aren’t using the technology.
Many employees hesitate to use new technology because they believe it will slow them down.
Explain why CRMs are integral and how the software saves your employees time once they get accustomed to the technology.
2. Users Never Logged In
Regarding the first metric I mentioned, it’s critical to analyze the employees who never log in to your CRM system.
There are several reasons people don’t use CRMs initially, including the following reasons:
- Hesitant to use new technology
- Afraid of change
- Unsure how to use the software
- Lack of training
Schedule meetings with the employees who refuse to log in to their accounts and see why they aren’t using the software.
Work with these team members and find ways to get them to implement the technology into their daily work routine.
Some employees need extra training time to get accustomed to the software. Therefore, you may need to dial back some employees’ workloads if they need more training.
3. Accounts Created by Role Owner
This user adoption metric measures how many accounts the CRM’s owner creates.
A company’s owners or leaders should spearhead CRM implementation and use it to create an example for other team members to follow.
For instance, if your sales managers aren’t using CRMs for their daily tasks, neither will your sales reps!
Therefore, observe how many accounts your CRM’s role-owner has created and ensure they actively use the software.
Remember, marketing and sales success is contingent upon whether your team actually uses the software!
4. Activities Completed
The final metric on our list is activities completed by your employees.
This metric highlights if the CRM’s role-owner (the person responsible for creating and managing accounts) actually uses their account.
Additionally, this metric shows how many tasks your employees complete in a specific time.
Following up on how often a user logs into their account can be difficult, but you can measure the number of activities they complete.
For example, how many emails do your employees send, and how many deals do they close?
You can track numerous activities, and your CRM system can send reminders for specific tasks.
Ensuring your employees use the software to check off the tasks they complete in the CRM system is essential.
When you initially implement CRM technology, employees often forget to check off the tasks they complete (that’s why reminders are so helpful!).
CRM Marketing Metrics
Marketing metrics track your company’s effectiveness at attracting new customers to your brand.
Marketing and sales efforts work hand in hand, with marketing acting as the first step. CRMs help you understand new customers that fit into your target audience.
Still, it’s essential your marketing team isn’t spending too much money trying to acquire new customers!
CRM Marketing Metric Examples You Should Be Tracking
A common mistake small business owners make is spending too much money on marketing efforts.
While spending money on advertisements, email campaigns, etc., is critical, overspending takes money out of your profits.
Below, I’ve compiled a list of four essential marketing metrics your small business must track!
1. Customer Acquisition Cost (CAC) by Channel
Customer acquisition cost (CAC) is how much your company spends to get a new customer.
Further, this metric helps your team understand the return on investment of their efforts to expand your customer base.
You measure customer acquisition cost by adding costs associated with converting prospects (marketing, sales reps, advertising, etc.) and dividing it by customers acquired.
Customer acquisition efforts are critical to business operations. However, you must ensure your business doesn’t overspend on these efforts!
2. Time to Recoup Customer Acquisition Cost
Time to recoup customer acquisition cost is another metric that measures the efficiency of your efforts.
This metric evaluates how long businesses take to make back the money they spend on customer acquisition costs.
Therefore, the shorter your time to return on investment, the more efficient your marketing and sales team is!
It’s important to understand that some marketing efforts result in an almost immediate return on investment, while others take a few days (or weeks) to connect with customers.
Analyzing these performances and utilizing the data for future decisions ensures you continually improve your company’s marketing campaigns.
3. Percentage of Marketing Originated Customers (By Channel)
The percentage of marketing-originated customers indicates how many new customers reach your business due to your marketing efforts.
You can take this metric further by analyzing which channels attract new customers.
For example, your CRM may point out that 25% of customers visited your website after viewing a Facebook ad, while 5% of customers came from a print ad campaign.
This metric indicates the most effective marketing efforts, ensuring your team only pursues successful outlets.
Pursuing marketing campaigns with low conversion wastes time and money.
Instead, ensure your marketing team focuses on outlets that lead to more sales and repeat customers!
4. Revenue Generated Per Campaign
The revenue generated per campaign metric tells you how much money each marketing campaign brings in.
This metric is especially important when evaluating the success of specific campaigns and understanding which channels lead to more customers.
For instance, if your email campaign has a 20% success rate but generates double the revenue compared to other campaigns, it’s likely worth pursuing!
Using the revenue generated per campaign metric, you can decide which marketing campaigns are worth your time and money.
Additionally, this metric lets you understand which channels generate more income, ensuring future marketing efforts focus on successful outlets.
Without this metric, it’s likelier your company continually pursues marketing avenues that don’t reach your target audience.
Fortunately, with CRM data, you can quickly see whether your target market prefers email campaigns over Instagram ads and more!
Utilizing this information is vital to personalized marketing campaigns and high investment returns!
CRM Customer Service Metrics
Customer service metrics indicate how your customers interact with your business, their perceptions of your brand, and how happy they are when they have questions.
Providing excellent customer service is one of the most critical aspects you can focus on. Consumers value an excellent customer experience.
Most customers continue purchasing products or services from a company after having a pleasant experience.
So, if you thought customer support wasn’t essential to success, think again!
Customer Service Metric Examples You Should Be Tracking
How many customer service metrics should your team track? And how do these metrics impact the average purchase value per customer?
Below I’ve compiled four CRM metrics related to customer service that your team must analyze.
Still unsure about the value of customer satisfaction? Keep reading to see why these metrics are so critical to success!
1. Net Promoter Score (NPS)
A net promoter score (NPS) measures consumer experience and loyalty.
Companies measure net promotor scores with a single-question survey and are reported on a range of -100 to +100.
The higher the net promoter score, the better, with 70% being the start of a reasonable consumer experience rate.
High net promoter scores mean your company is efficient at converting new leads and generating revenue from these leads.
NPS is a quick method to see how many customers enjoy shopping with your company. However, it does rely on customers completing a survey, which some don’t do.
2. Average Time to Resolution
The average time to resolution measures how long it typically takes your customer support team to resolve a customer’s issue.
You measure this CRM metric by adding the total time it takes to resolve all customer request and dividing it by the number of requests.
Why does the average time to resolution matter?
Measuring the average time to resolution helps your business identify areas where your team can improve their customer support processes.
Reducing wait times and resolving issues quickly leads to higher customer satisfaction rates, meaning more positive reviews for your brand.
One mistake I’ve made is underestimating how much value consumers place on support experiences.
The average customer takes this metric seriously and uses their experiences to determine future shopping decisions.
Therefore, ensuring your company measures customer satisfaction is crucial!
3. Rate of Renewal
The rate of renewal tells you how many customers decided to continue using your service.
Renewal rates apply to subscription-based businesses and companies that rely on contracts.
This metric is especially useful when measuring customer loyalty and understanding why some customers decide to remain loyal while others don’t.
It’s also helpful in determining whether discounts increase the renewal rate.
Utilizing this information allows businesses to better target and retain customers.
Additionally, tracking the renewal rate can help your business understand which marketing campaigns successfully retain customers.
For instance, if a customer segment received an email about a sale but didn’t renew their subscriptions, this campaign wasn’t effective.
4. Customer Churn Rate
Customer churn rate measures the number of customers who stop using your services and products during a particular period.
The customer churn rate is especially useful in subscription-based companies, showing how successfully you keep customers engaged over time.
The higher the customer churn rate, the more money you’re losing on potential revenue from subscriptions and repeat purchases.
Fortunately, with CRM data, you can identify why churned customers are leaving and take steps to prevent them from canceling their subscriptions or returning to your company.
You can calculate churn rate by taking the total number of lost customers and dividing it by total customers at a specific period.
The industry average churn rate ranges between 3 and 7% for most companies. However, this number can change depending on several factors.