January 17, 2022

How to Use CRM Metrics To Your Advantage: A Simple Guide

CRM metrics are the bread and butter of your entire sales strategy. They help you identify sales leads, contact information, and activity details so that you can track how well your CRM is working for you. But many marketers don’t know how to use them properly.


What are CRM metrics?

CRM metrics are the numeric values that show you how well your CRM campaigns and marketing efforts are working. As a sales person, there's no better way to learn what works for you than having an objective metric on which to gauge your progress!

When it comes to CRM Metrics, most of us take them at face value without a second thought—like that time I forgot my calculator when asking our client if we could give him six months of free service.

While you can still get away with this kind of mistake in CRM, it's a much better idea to use data-driven metrics that show the performance and impact your marketing efforts have on sales results (and how well they are performing). This allows you to make adjustments as needed so that your campaigns meet or exceed their goals—so keep reading!

What Kinds Of Metrics Are There?

There are three basic categories of metrics you can use:

• Performance Metrics – These show how well each individual campaign and opportunity is performing. This type of metric will tell you, for example, which campaigns are doing best or worst at converting leads into sales .

• Customer Lifetime Value (CLV) - How much money your customers generate over the long term from all their transactions with your company. For instance, if a customer spends $500 on something every six months, they are generating CLV of $100/month or $1,200 over the course of a year. This metric will show you how much total profit your customers generate for you each month.

• Customer Acquisition Cost (CAC) - How much money it costs to get new customers into your funnel and onto the sales funnels in the first place. From here on out, all leads that meet certain criteria (such as purchasing a certain amount of product, signing up for the free trial or opting in to receive more emails) are eligible for all sales funnels. The CAC metric will show you how much it costs to acquire each new customer and convert them into paying customers.


How Do You Calculate CRM Metrics?

To calculate these metrics, you need to first identify your funnel. This includes who the target customers are, what their buying criteria is and how you get them into your sales process (like an email campaign or a landing page).

For example: If you want to know how much money each of three different lead sources generates for you per month, it would be as follows:

Lead source #1 – $100/mo CLV = 100 x 12 mos = 1200

With such a wide range of metrics, you should be able to find customer lifetime value easily enough by looking at your funnel data. CAC is just as easy - it's the cost per acquisition divided by the number of conversions.

How Do You Compare Them?

The most important thing to remember is that metrics are based on averages. For instance, if you have 1,000 leads and only 10% of them generate CLV or CAC above $200/mo., then the metric has a lot more room for error than it might seem like at first glance. On the other hand, if your average CLV increases by just 50 cents per month (which happens in some industries), then the metric will have made a lot of progress.

Tracking And Reviewing Them

You'll need to keep track of your metrics on an ongoing basis, so you can spot trends and adjust as needed. For instance, if you notice that one lead source is consistently churning leads at a higher rate than another, then you may want to try switching to the other source for some time. Also pay attention when measuring CAC and CLV - if there's been too much fluctuation in either of these numbers over several months or quarters, it might mean that your sales process is way off track.

When comparing CACs and CLVs across multiple sources (like from email campaigns vs website forms), remember that all metrics should be taken with their own set of limitations: Email-based lead generation will have far lower limits on both sides compared to those who are drawn by ads online .

On the other hand, email-based lead generation may have a harder time reaching out to people who are looking for new cars. If you're hoping that your website forms will produce sales at an average of $200 or above, but haven't been able to achieve this goal in months , then it might be worthwhile to look into ways of improving clickthrough rate and conversion rates on these forms. You can also review each metric daily (or weekly) so that you spot trends immediately rather than after several months when they've become too obvious to miss them!


How to use CRM metrics to your advantage

As you start using your CRM system to monitor and track progress on leads, sales opportunities, and client relationships , remember that tracking metrics is only half the battle. It's equally important to analyze what these figures mean - after all, if no one ever knows how well they're doing then it doesn't matter whether or not the numbers are accurate!

For instance: If I have a $100 CAC for an email campaign but my revenue from this source has been steady at about $2 per month for two months running , then as far as I can tell there hasn't been any change in my revenue.

However, if I see a CAC value of $400 in this case, then it would make sense to believe that more people have been opening my email messages and clicking on the links within them - thus generating much higher revenues than before.

It's not always possible to identify trends from these metrics alone (for instance: you might also notice an increase in your number of open emails for a period after launch or some new high-value clients coming on board), but what is important is that you monitor your progress constantly. After all, it's no use sitting back and hoping that things will improve without being prepared to take action in the right direction!


What are the most important CRM metrics for a sales team?

If you're running a successful sales team , then the most important metric will be revenue. This could pick up on new clients coming your way, big ticket purchases from existing customers or an increase in online orders for products and services .

The more money that comes through to you every month as a result of this increased activity, the happier everyone is likely to be!

Once you've identified which key areas are driving your business forward - it's time to start paying attention even more closely than before. For example: 

If we assume our lead generation system is working well but there isn't much movement on the revenue front, then we need to analyze what's going wrong. What might be holding things back? Is it possible that our phone calls are being dropped during the call recording process? Or is it more likely that our sales team may simply not have enough time in their schedule for high-level meetings with large companies - something which used to happen naturally because of their workloads at work?

Whatever your findings, consider taking action on them as soon as you see fit (such as reviewing timeslots and task allocations) so they can no longer hold you up! The sooner these issues are dealt with, the sooner you'll be able to start making improvements on both fronts.

It's incredibly important that a sales team has metrics in place - but equally as vital is having people who can interpret them! What are your key performance indicators (KPIs)? Let us know within the comments section at the bottom of this post and we'd be more than happy to discuss further - or find out how we might help you if it's something else that needs addressing first!


How do you track leads?

Lead tracking is a vital part of any lead generation strategy, and it's something which most sales teams struggle with.

It can be easy to assume leads are sent out by the system automatically - but in reality there's more than likely an element of human intervention involved as well! When you're using a CRM tool like Salesforce , for example, you should expect that your leads will come from several different sources: third party applications (like Google Analytics), internal systems or databases (such as Mailchimp ), website analytics (such as Clicky ) etc. Whichever source they came from, though, it's vital that you track them so you can find out exactly where your leads are coming from and what they're doing on the site.

For example: a website analytics service such as Clicky might show an increase in traffic incoming to your site over recent days - this is obviously very useful information for the sales team to have. If there was no lead system in place (or if people weren't using one properly) then you wouldn't be able to see whether or not those new visitors were potential customers or simply someone who'd stumbled across something interesting (like a new blog post ) and become curious.

However, if you do have a lead system in place then the sales team should be able to look at that data and analyze it further - for example: How many leads did we get from each source? What percentage of all visitors came through Google Analytics or Clicky versus Mailchimp (or any other direct marketing tool)? Can we attribute this increase in traffic directly to our existing list, or is there more going on here than meets the eye? Do these new leads already have an email address linked into their profile?

How do you track contact information?

This is probably the most important part of any lead system, and it's something that people often forget about. When you're working with a CRM software like Salesforce , for example, your leads have contact information (e-mail addresses) associated with them - but this could be incorrect or out of date!

If you don't get in touch to check if they've received their order confirmation email within 24 hours then there's likely going to be confusion when someone asks what happened - "Oh yeah... I haven't got my shirt yet!" etc. That mistake might cost salespeople money for something that was meant to arrive in the post a few days ago.

So, if you're using an online CRM system like Salesforce or Hubspot , then it's worth adding fields for contact information (e-mail addresses) right at the beginning of your lead - this way you can quickly check whether they've received their order confirmation email and update them accordingly. If they haven't then there will be no point wasting time chasing down all these new leads!

On top of that, people often forget to add phone numbers later on as well - but don't just send out automated messages to everyone with a generic message about your products. This could easily turn people off and even if you do send out messages, don't forget to include an opt-out link so that they can unsubscribe from further mailings - this is especially important if you are sending e-commerce promotions into their inbox!


How do you track activity details?

It's important to track what salespeople are doing - and this is another area where many businesses fall down. For example, when working in an office environment there may be times that the person you've been given as a contact will have left early or they're out of your building for the day so it might not make sense from a business perspective to try and explain how things went with them if that was their last interaction!

So instead, use software like Salesforce (or even Excel ) which can automatically generate reports about all new leads at different stages: when they were received by customer service , when they were passed to a salesperson, etc. This way you can keep track of progress and see what's working well as well as how much time is being spent on each lead.

If your business relies heavily on email then use tools like Rapportive to help identify the people in your database who are missing from your CRM system - it will show you their LinkedIn profile along with other details about them that might not be readily apparent!

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