If you’re looking to justify your impending CRM purchase, you no longer need to fret about whether that money would be better invested in Treasury bonds, gold bullion, whisky futures or lottery tickets. Research has revealed that for every dollar spent on CRM software, businesses can expect an average of $8.71 back—a staggering 771% return on investment (ROI).
That’s according to a report from Nucleus Research, a firm that specializes in case-based technology research. The analysis included data from 2011 to 2014, and considered companies from start-ups to large corporations across a wide range of industries. The findings revealed that the ROI for a CRM implementation—in the form of increased revenues and improved operational efficiency—is substantial. Furthermore, it continues to grow over time because of software design improvements and fierce pricing competition.
A brief primer on CRM
Customer relationship management (CRM) software is crucial to any company in the business of selling (which is to say, just about everyone). These applications provide one platform to track every interaction with current and potential customers, helping businesses improve client relationships and prospect more efficiently. Modern iterations of CRM have been used by companies across many sectors since 1995 but continue to evolve, encompassing more pieces of the customer-business relationship and providing additional ways to maintain it.
It’s certainly more efficient and powerful than Microsoft Excel. Not only that, but the ROI only continues to climb as more providers innovate on existing technology. It’s already 1.5 times higher than it was three years ago.
There are a few reasons why CRM investments continue to yield increasing returns.
More possibility in the cloud
Cloud-based technology has been at the fore of software innovation, enabling companies to store their data and use it across platforms and on multiple devices. Switching to the cloud costs little, tends to be faster and further increases the return on investment. According to Nucleus research, cloud technology for CRM delivers 1.7 times greater return on investment than a desktop or server-based implementation.
A move away from traditional IT
Historically, CRM software was a component of a company’s in-house IT department, often supported by expensive technology consultants. Knowledge of how to use and get the most out of the software was several steps removed from the employees who actually interacted with clients and prospects.
Today, the decision to invest in technology is usually driven by the business—with a greater burden on the vendor to ensure a smooth and successful implementation process. The end users are closer than ever before to requirements gathering, vendor selection and deployment, and are more comfortable demanding what they want.
Now CRM software can more easily be used by employees throughout the company, empowering them to make smarter business decisions and collaborate more seamlessly. The emergence of this user-friendly approach has allowed businesses to adopt a more systematic process for tracking and managing customer relations.
Three of the four largest software vendors in the world are making aggressive investments to improve their CRM market positions. More and more, vendors are including embedded analytics and automation tools to make the technology more intuitive and insightful. The software is also increasingly being designed to deliver productivity and results, rather than just functionality. And the more CRM software applications become streamlined, the more time the user has to focus on high-value tasks.
How it helps brokers
For the commercial real estate industry, CRM software allows brokers to segment contacts according to their own criteria, browse through available properties based on client needs, and automate frequent activities like lease expirations and meeting follow-ups.
It helps brokers make sure they’re prioritizing the right leads, and allows everyone to see the history of a client or potential client. Gone are the days of hunting through different programs to figure out who to call or how to keep track of the status of a client.
Many companies have already churned through a CRM or two in the decades since they achieved mainstream popularity, but continued investment in the space and improved technology are ensuring that the functionality is only getting better and the return is only increasing. And with the availability of scalable, cost-effective cloud-based CRMs designed specifically for the commercial real estate industry, even brokerages that have been skeptical have more reasons than ever to give them a try: 8.71 reasons, in fact.