"The purpose of a business is to create and keep customers"
-- Theodore Levitt

In this economy, many of us are faced with increased pressure for making the right purchasing decision. We pointed out in our January 29 newsletter, "Why Customer Centricity?" that along with "Creating and Maintaining Customer Satisfaction", "Providing a Return on Investment" was listed as the number one concern that kept executives up at night.

Return on Investment (ROI) has always been difficult to measure. Many companies shy away from it altogether because of the seemingly infinite amount of variables that can influence the return on any given investment. Many small to mid sized companies wrestle with the feeling that they don't have the time, finances, or resources to do a detailed investigation and analysis of their current business, and the potential returns and gains that are needed to justify expenditures.

While that may be true in many cases, it is much wiser to do as much due dilligence as possible on the front end to avoid regrets and failed implementations that could have been avoided, if more analysis and planning was done up front.

Acknowledging that there are a number of variables that cannot possibly be foreseen or taken into consideration, it still makes sense to do an ROI analysis before spending any money on a CRM implementation. By creating a scoring system, an organization can assess where they are, where they want to go, and can plot a chart to reach their goals.

Each and every company implements a CRM solution for different reasons. Although there are some crossovers, most companies have a different starting point, a critical problem they need to solve immediately. Unfortunatley, sometimes organizations, like individuals, have been hampered by a crippling defect for so long, they have accepted that they just need to deal with it. This is not how it needs to stay, however.

In this newsletter, I will try and highlight some objective areas that have been used to measure ROI by some of our clients, across a variety of industries.

Generally, there are 3 levels within an organization which a CRM initiative can provide a compelling return on investment:
    1. At the organizational level
     2. At the department level
     3. At the end user level

By establishing and understanding what you stand to gain, you can begin to understand if a CRM initiative could benefit your organization.

Below are some ideas to help you begin to see if there is opportunity to gain from a CRM initiative in your organization. You might approach each of these with three questions:
    1. Where are we today?
     2. Where would we like to be?
     3. What would be the financial impact (either in cost savings
         or an increase in revenue) of moving to the desired level          of achievement?

ORGANIZATIONAL
· Customer Satisfaction Levels (What is the level of customer   satisfaction?)
· Customer Attrition Rate (How many customers do you lose each   year to a competitor, or non-purchase?)
· Customer Value Levels (How much is your average customer worth   to your organization?)

DEPARTMENTAL
a. Sales
· Visibilty of sales manager to pipeline (How long does it take for your   sales manager to see all opportnities in the sales funnel?)
· Accuracy of forecasting (How accurate are your sales forecasts?)
· Time to close an opportunity (How long is an opportunity open   before a customer makes a 'buy' decision?)
· Deals closed per lead source (What is your most profitable lead   source?)
· Sharing of department documents (How are documents and   procedure documents stored, retrieved, and distributed?)

b. Order Processing
· Order Processing Time (How long does it take to ship an order once   it is placed?)
· Order Processing Costs (How expensive is the process to recieve   the order, and get it out the door?)
· Order Entry Mistakes (How many order entry mistakes are made per   month?)
· Shipping Mistakes (How many shipping mistakes are made per   month?)
· Billing Mistakes (How many billing mistakes are made per month?)

c. Customer Service and Support
· Customer Wait Time (How long does a customer wait before they   speak to someone? How long do they wait while waiting for an   answer?)
· First Call Resolution (How many incoming calls are resolved on the   1st call?)
· Support Ticket Resolution Time (How long is the average support   ticket open?)
· Most common problems (Do you have visibility to your most   common incoming calls?)

d. Marketing
· Execute a direct mail campaign (How long does it take to execute a   direct mail campaign from concept to delivery?)
· Execute an email campaign (How long does it take to execute an   email campaign from concept to delivery?)
· Measure results of a campaign (How much time and effort does it   take to measure campaign effectiveness?)

END USERS
a. Sales
· Time to generate a quote
· Time to generate an email or letter
· Search for a document
· Generate a report
· Produce a forecast
· Find history of contact interaction

b. Customer Service and Support
· Log a ticket
· Resolve a support ticket
· Search for a common problem
· Generate a report
· Produce a list of all open tickets

c. Marketing
· Create a target mailing list
· Generate a report
· Measure campaign profitability
· Sort and segment customer/prospect base

This is by no means an exhaustive list, but hopefully provides a starting point for you to begin to consider ways for you to help your organization become more profitable.