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CRM ROI calculator

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What is CRM ROI?

CRM ROI (Return on Investment) measures the profitability of investing in a customer relationship management (CRM) system compared to the relevant costs. Understanding this metric is important to developing an optimized CRM system that contributes to revenue generation and cost savings.

Relevant channels: HubSpot, Salesforce, Zoho CRM, Pipedrive, Freshworks CRM

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How to use this CRM ROI calculator

To calculate your CRM ROI, fill in the following inputs:

  • Revenue increase

  • Time saved

  • Hourly rate of employees involved

  • Increase in retention rate (in percentage)

  • Customer lifetime value (CLV)

  • Software costs

  • Implementation costs

  • Operational costs

Based on these inputs, the tool will instantly calculate your CRM ROI, giving you insights into the overall financial impact of your CRM system.

CRM ROI formula

An image showing CRM ROI formula

CRM ROI = [(Net Gain from CRM − Total CRM Investment Cost) / Total CRM Investment Cost] × 100

Here,

Net Gain from CRM = Revenue Increase + Cost Savings from Efficiency + Customer Retention Benefits

Cost Savings from Efficiency = Time Saved × Hourly Rate of Employees Involved

Customer Retention Benefits = Increase in Retention Rate × Customer Lifetime Value (CLV)

Total CRM Investment = Software Costs + Implementation Costs + Operational Costs

Understanding the CRM ROI result

The ideal CRM ROI depends on the size of the business, the complexity of the CRM system, and the effectiveness of its implementation. Generally:

  • A high CRM ROI indicates that your CRM system is providing value through increased revenue and operational efficiency.

  • A low CRM ROI suggests that the system may not be delivering the expected returns, and adjustments may be needed in how it’s being used. If the value is negative, you may require a review of the investment.

When to calculate CRM ROI

  • After implementing or upgrading a CRM system to assess its effectiveness

  • Before renewing or switching CRM platforms to evaluate their financial impact

  • After significant business process changes that affect CRM usage

  • During regular business reviews to measure ongoing CRM and retention marketing performance

How to calculate CRM ROI (with example)

Imagine your CRM system helped increase your revenue by $50,000, saved you 500 hours of employee time (with an hourly rate of $30), and improved customer retention by 10%, with a customer lifetime value (CLV) of $5,000.

The total CRM investment included $10,000 in software costs, $5,000 in implementation, and $3,000 in operational costs. Here’s how you can calculate your CRM ROI:

CRM ROI = [(Net Gain from CRM − Total CRM Investment Cost) / Total CRM Investment Cost] × 100

Cost Savings from Efficiency = 500 hours × $30 = $15,000

Customer Retention Benefits = 10% × $5,000 = $500

Net Gain from CRM = $50,000 + $15,000 + $500 = $65,500

Total CRM Investment = $10,000 + $5,000 + $3,000 = $18,000

CRM ROI = [($65,500 − $18,000) / $18,000] × 100 = 264%

This means your CRM system generated a 264% ROI, indicating a highly profitable investment.

How to improve your CRM ROI

  • Streamline processes and automate routine tasks to save time

  • Optimize CRM workflows to increase employee productivity

  • Use CRM data to personalize customer interactions and boost retention

  • Continuously train your team to maximize CRM usage

  • Regularly evaluate your CRM system for feature upgrades that enhance efficiency

  • Leverage customer insights from the CRM to fine-tune your marketing strategies

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