CRM Performance Metrics: How You Know if Your CRM Is Working


Key Performance IndicatorsWe’ve all heard the quote attributed to management consultant Peter Drucker, who said, “If you can’t measure it, you can’t manage it.”

Some have challenged the validity of this statement, saying that emotion and instinct play as important a role as hard data in building customer relationships. That may be true to an extent.

However, many of these same people aren’t using the right metrics when measuring performance, leaving holes in their analysis. For example, a lot of organizations live and die by whether sales quotas are being met. These metrics are important but don’t come close to telling the whole story.

That’s why I would take Mr. Drucker’s quote one step further and say, “If you aren’t measuring the right performance metrics, you can’t manage them.”

Nobody can debate the value of having easy access to data that is accurate, complete, up-to-date and easily accessible. Measuring the right data, understanding what these metrics mean, and using these metrics to adapt and improve business processes will determine the success or failure of your customer relationship management (CRM) system investment.

There are key performance metrics that top performers use before and after implementation. The first step is to set baseline metrics involving company performance and system usage prior to launching your CRM. A CRM will only boost sales, productivity and marketing effectiveness if everyone commits to using it.

With the help of a CRM consultant, organizations need to determine who should be using the CRM and how frequently, and establish baseline metrics for data accuracy and completeness. Employees should also understand how to maximize performance by using data to target, segment and personalize interactions with customers and prospects.

Once baseline metrics are set and the CRM is deployed, you can begin to measure staff performance, such as the percentage of sales reps that achieve quota. However, this requires realistic sales targets and forecasts, and a realistic expectation for meeting quotas – both of which can be achieved with a CRM that provides greater visibility into past and present sales data.

One important but often overlooked metric is the turnover of sales reps. While turnover is common among low-performing reps, high turnover among top performers could be a sign of a problem. It’s important to properly classify your sales reps and keep as many of your top performers as possible.

Of course, baseline metrics set prior to launch will always come into play. What is the system utilization rate for your CRM? Is data accurate and complete? Integrating data and eliminating redundancy and errors will streamline operations and improve productivity. Also, look for higher customer growth and conversion rates as signs that your CRM is working.

Keep in mind that there are dozens of metrics to use when measuring CRM performance. Beware of CRM vendors that try to sell you a solution by rattling off a laundry list of metrics before they even know your business processes.

The key is to focus on those CRM performance metrics that are most relevant to your business, especially when you first get started. From there, you’ll probably find more ways to use CRM data to improve sales, marketing and operations.