Sifting through the dirt is a skill that all business owners need to have to acquire the elusive treasure grove of success. While we've overcome the dilemma of not knowing things, we know too much. Finding the right CRM metrics for your goals is much the same.
One of the significant issues we now face is having too much information and not knowing what to do with it all. It's like needing help to choose a suitable dish from a vast menu list at a top-class restaurant, or worse yet, needing help to choose a restaurant!
When it comes to customer relationship management (CRM), the same dilemma is true. With endless data streams, businesses can find themselves just as lost as in any other information-overload situation.
What are CRM metrics?
CRM metrics are numerical measurements of customer relationships, such as the rates of getting new customers and keeping old ones and the average purchase value. Companies designed them to help businesses understand how their customers interact with them and what actions they should take to increase revenue.
Simply put, CRM metrics provide valuable insights that you can use to improve a business's overall performance.
Types of CRM Metrics
There are three main types of CRM metrics that we can categorize any business-related statistic under:
1. Business Performance Metrics
These are usually the essential CRM metrics, as they measure the success of a business. Examples include sales figures, customer acquisition and retention rates, average purchase values, and more.
2. Customer Experience Metrics
This metric measures customer satisfaction when using your products or services. They do it through surveys on customer satisfaction or feedback from product reviews.
3. Operational Efficiency Metrics
This type of metric measures how efficient a business is in carrying out its operations, including order processing times and cost per unit sold.
How to choose the best CRM for your business
Choosing the right CRM for your business is like choosing the right sock size for your foot. Of course, there's more to it than size; you must also consider the design, color preferences, texture, and price.
In the same way, when choosing a CRM for your business, you should consider the reporting functions, integration options with other platforms, customization possibilities, user-friendliness, and scalability.
Just like we can all agree that we should put on socks before putting on shoes, most analysts will advocate for these 5 CRM metrics to follow for your business:
Customer Acquisition Rate
Customers are vital to any business's success. To measure the acquisition rate of customers, you measure the rate at which you gain new customers, usually expressed as a percentage of total sales. It helps you understand how effective your marketing campaigns are at striking a nerve with customers and where you need to focus your resources to generate more leads!
Customer Retention Rate
This metric measures the number of customers who make repeat purchases over a certain period and is also expressed as a percentage of total sales. It's an important indicator because it shows your business's success in gaining customer loyalty and keeping them hooked on your products and services.
Average Purchase Value
This metric is all about money (the good stuff), measuring the average amount each customer spends on your products or services. It helps you understand how much revenue your business makes from its customers and where you might need to focus more on increasing sales.
Rate of Renewal
This is a critical metric to track to understand how well your business is performing in the online business world. It measures how many customers keep subscriptions to your product, which shows how happy they are with it.
Last but not least is the metric we don't want to look at but have to: customer turnover. Yes, this metric tells you how many customers say "bye-bye" to your products and services. It may be upsetting to look at, but tracking it will help immensely in helping you restrategize for long-term success.
The importance of CRM metrics in today's data-driven world can't be overstated. Businesses can learn more about their customers' needs and preferences by closely monitoring the top 5 CRM metrics. They look at customer acquisition rate, customer retention rate, average purchase value, rate of renewal, and customer turnover rate.
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