How to set KPIs: Measuring how successful your CRM strategy is

A Customer Relationship Management (CRM) strategy will enable you to create stronger relationships with customers and sell more, and it will also help your company accomplish other tasks successfully.

One thing is certain – to be able to answer the question of whether your CRM strategy is working, you need to find an answer: how good your CRM works. This is where Key Performance Indicators, or KPIs, come in. KPIs help you keep your CRM on track and tell if it is meeting your desired goals.

This post provides an insight into the essential steps to define meaningful KPIs to measure CRM success.

1. Identify Your CRM Goals

Before choosing your KPIs, it is important to have the CRM strategy set up. These goals should be in line with your business objectives as a whole. Common CRM goals include:

Drive sales: Higher lead conversion and increased revenues.
Boost customer happiness: Increase customer service and attrition.
Improving operations performance: Automating repeatable tasks and reducing time consuming manual touch points
Increasing customer loyalty: Raise your own value to ensure repeat purchases and referrals.

Your KPIs should relate directly back to these goals, so that you are using the appropriate metrics to measure progress.

2. Select KPIs That Correlate with Your Objectives

After you define your goals, you should choose particular KPIs that will help track progress. Here are some common KPIs you can track depending on your desired goals for the CRM-related purpose.

a. Sales and Revenue KPIs

Lead Conversion Rate: The percent of leads that convert into customers. This is a KPI to gauge how well your CRM platform is aiding the sales process.
Sales Growth: how much more business the CRM is helping to generate by looking at revenue growth over a period.
Average deal size: The overall closed deals, divided by the number of your closed deals. This insight can track if the issues are related to CRM and that change will allow sales teams to focus on larger dollar opportunities.

b. Customer Satisfaction KPIs

Customer Satisfaction Score (CSAT): A measurement of customer satisfaction that is based on the experience they had. If you score high, your CRM is good at managing customer interactions.
Net Promoter Score (NPS): This measures customer loyalty and likelihood to recommend your brand. Increased NPS means stronger customer relationships achieved through successful CRM strategies.
SimpleMetrics Customer Retention Rate: % of customers who stick with you over time. Customer Loyalty: By achieving better retention your CRM is, in effect, keeping customers loyal.

c.KPIs for Efficiency and Productivity

Average Time to Close Deals: This is the number of days it usually takes a lead to move through your sales pipeline and eventually become a closed deal. By cutting down process time, you are demonstrating that your CRM is in fact fast tracking sales.
On-time task completion rate: proportion of tasks being done on time if they were due for follow-up or after an update. Indeed, this KPI gauges how efficient CRM tools are in bringing team productivity forward.
Impact of Automation: How much manual work is ERP automation saving, and with it, how are you experiencing improved operational efficiency. This can mean less time on data entry or in lead follow-up.

3. Set SMART KPIs

When setting your KPIs, you want them to be effective which means it follows under the SMART framework.

Measurable: Be objective in what each KPI measures. Lead Conversion: Increase Q4 Target Lead Conversion Rate to 10%
Ex: Specific: Ensure your KPIs can be measured using data so you can track your progress over time.
As we discussed with short-term goals: these targets should be realistic in the frame that we currently exist; our resources, restrictions and what team can truly do now.
They also need to be referenced appropriately: ideally ought they should relate back to your CRM strategy and business objectives.
That is to say, Time-bound: what timeframe are you setting for yourself to #hack your way out of Mediocreville with these KPIs every month/quarter?

The use of SMART KPIs is an excellent way to ensure that the metrics you track accurately reflect your CRM performance, and allows you to adapt as necessary.

4. Using CRM Data to Monitor Results

The data from your CRM system is actually a goldmine in the process of measuring KPIs. Top CRM platforms include reporting and analytics features that you can use to monitor key metrics in real time. How you can get the most out of your CRM data

Automate KPI Tracking: Schedule automated reports to fetch required data and keep updating you about the KPI status. You can save time finding info, accurate and up to date information.
Build Dashboards: Utilize CRM dashboards to visualize important data points. Your team is able to monitor progress and make decisions based on the data with ease.
Analyses Dashboard: Keep an eye on long term KPI trend/ trend over time. When you regularly see increases or decreases in various metrics, it usually means your CRM strategy is either working…or not.

5. Analyze and Optimize

But that is only the first step of many. The real value is in the analysis of this data to evolve your CRM strategy. Optimize by KPI performance would look like:

Focus on Strengths and Weaknesses: Identify the correlation between performance in certain KPIs and replicating behaviors to maintain or grow. Both of these means checking to see if the other KPIs are underperforming, and if they are, figure out why they are underperforming and try something new.
Reviewing the Performance: Organise regular meetings with your team to review how CRM is performing and look into areas that need improvement. This aligns everyone to your goals and reinforces a culture of constant progress.
TEST AND ITERATE: Utilize your KPI data to test new strategies, like different sales processes or customer engagement tactics. Monitor how these changes affect your KPIs, and adjust accordingly.

6. Involve Your Team

Having an integrated approach across departments for improving CRM adoption with KPIs. Ensure that the CRM KPIs are clear to your three main departments (sales, marketing and customer service) Foster open feedback on what is going well and what should be better. If everybody understands and owns this, making simple changes that lead to success is easier.

Conclusion

KRAs: Key results areas will allow you to understand if your CRM strategy is working or not. But to ensure your CRM efforts are driving real impact, you must be clear with what goals you are tracking, which metrics will give insights into those goals and how they can use SuiteCRM data track progress on these accounts. Analyzing and improving on these KPIs from time to time will help you make better your strategy and maintain healthy customer relationships, leading to sustainable business growth.