How to Determine a ROI on your CRM Investment

It’s possible to quantify, or at least theoretically quantify the return on investment for the use of a Customer Relationship Management system. There are two essential steps:

  1. Examine and Record the potential efficiencies of your organization. Based on some of the benefits we listed above, it may be possible to select specific tasks from your existing business process. Examples include:
    • Automated Communication (How much time do staff use each week/month to perform communication that could be automated?)
    • Consolidated Information (How much time do staff spend looking up information as they go about their daily tasks?)
    • Process Design/Support/Enforcement. (How much time might be saved from either Business Process Re-Engineering and the subsequent CRM enforcement thereof, or how much time might be saved if existing processes were better supported/enforced?)
  2. Perform a Calculation. This can be a simple ROI calculation and can be supported by something as simple as the following spreadsheet:
ROI Calc for CRM

Simple ROI Calculation

The figure above represents the extremely simple calculation of ROI based on two common tasks:

  1. Writing a simple thank-you email each time a sale is made.
  2. Finding an important email[1].

To use this concept, create a spreadsheet like the one above and use the formulas below.  You can add as many Process/Tasks as you like. Naturally, your numbers will differ entirely from the examples above.  You will need to discover and enter the following cells A2(+) à F2(+).

Here is the very simple set of formulas for the remaining cells that allow you to achieve a result, whether it be positive or negative:

  • Hours Savings: =(D2*B2*E2)-(D2*B2*F2)
  • TimeFrame Savings: =H2 * G2
  • License Cost (please contact your Microsoft Partner for the best price[2])
  • ROI: =i2-j2
  • AVG ROI: =AVERAGE(K2:K3)
Please note that we average the ROI when there are more than one tasks listed.

This simple ROI calculation can, of course, be modified to suit the special circumstances of your organization, and different formulas may be used to reflect the special circumstances surrounding the various tasks.

!  Pitfall ! Depending on the size of your deployment, license costs may not be the only cost to consider. In the Deployment Strategy section of this blog, we walk through the steps of discovering and then quantifying the potential costs of customization and configuration of Microsoft Dynamics 365.  This may or may not apply to your deployment. If it does, then adjust the formula above by adding those costs (and potentially amortizing them across time) accordingly.

[1] In this case, the presumption is that email tracking is enabled per Contact / Organization / Opportunity / Lead, etc of your Microsoft Dynamics 365 deployment.

[2] Your Partner will know which license is appropriate for the users in question.  Depending on which entities the user is using, pricing can vary widely!  Contact us with questions.  As always, we are happy to help.