Our Evaluation of the Information Quality Level on CRM ROI from Google Search Results

Executive Summary

• We review some of the highest-ranking sources on ERP CRM to answer the quality level of information on ERP CRM.

Introduction

We review some of the most popular articles on CRM ROI to understand what is generally available to those searching on this topic. Our own site has several articles that rank high for a search on “CRM ROI,” however, we will leave our own articles out of this analysis.

See our references for this article and related articles at this link.

Article #1: Insightly’s Calculate CRM ROI

A CRM vendor publishes this article. It makes the following claim around 1/2 way through the benefits of CRM.

Freeing up sales reps to sell more
Sales reps don’t want to waste time fumbling with spreadsheets or subpar CRM systems and arguing over lead assignments. They want to sell. Lead management, workflow automation, and assignment rules make sales reps more productive and less distracted. Focused sales reps find more time for prospecting, which results in a healthier pipeline.

This is a curious claim as numerous salespeople I have discussed CRM systems normally complain that CRM systems consume their time and give them little back. Evidence for this is that CRM systems normally have poor quality information and salespeople have to be forced into using CRM systems.

Your sales team tries their best. No one doubts that. Aside from their personal anecdotes, however, how can you definitively know which actions and team members are contributing to your success? Without a CRM, it’s difficult to track and measure performance.

Does your sales leadership definitively know which actions are effective? And only CRM systems measure how much each salesperson sold. That is odd because salespeople received commissions long before CRM systems arrived on the scene. This claim about only a CRM system being able to measure performance is false.

In today’s virtual world, sales and marketing teams frequently operate in isolation from each other. Marketing focuses on content creation and delivering MQLs, while sales builds pipeline. This sounds great in theory, but, in reality, it rarely works due to goal misalignment.

CRM technology bridges the divide between sales and marketing. Marketers gain insights to understand which leads convert into paying customers. Sales reps enjoy greater visibility into the status of important marketing initiatives and lead flow. All of this creates a virtuous cycle that, hopefully, leads to enhanced communication and collaboration between two vital departments.

CRM systems have been implemented broadly for at least 15 years. Yet schisms between marketing and sales are still commonplace. Marketing measures itself on leads or things like the number of campaigns run, etc.., while sales measures itself on sales, which is highly dependent on the quality of the leads. There is simply no evidence of this claim, and it is a strange claim as marketing does not use CRM systems.

A CRM overcomes data silos by centralizing all of your most important customer, project, and business intelligence into a single, collaborative ecosystem. Team members can instantly search, filter, and view data from any web-enabled device—rather than digging through countless documents, spreadsheets, and network folders.

CRM systems are not a single collaborative ecosystem. Most people try to get out of CRM systems as quickly as they can.

At the end of the day, calculating return on investment for your CRM is a multi-faceted endeavor. When measuring CRM ROI, consider all of the ways that your CRM impacts revenue, expense management, and productivity. In doing so, you will likely find that the benefits outweigh the cost.

This is sort of the standard explanation of ROI by a vendor. It explains ROI at a very high level and then asserts that CRM systems have more benefits than cost. Naturally, this is a company with a CRM system to sell.

Article #2: Discover’s CRM ROI Implementing CRM

This quote is from the article.

Research by Nucleus has shown that for each $1 spent, a CRM will generate a return of $8.71, which is an extremely attractive percentage. This is why CRM savvy companies are constantly looking at making further investments into their systems

Nucleus Research on CRM ROI

It is important to cover the Nucleus Research study, as it is repeatedly referred to articles about the ROI of CRM systems.

Here are the most important quotes in our view from this study.

In looking at the case studies published since our last analysis, Nucleus found that for every dollar a company spends on CRM, they now get back $8.70.

The first question that presented itself was “Why are none of the case studies mentioned or otherwise listed?”

This article you are reading is already long, and this analysis just made it longer. So we took our analysis of the Nucleus Research CRM ROI estimate and have that as a separate article you can read at How Likely is it That the Often Quoted Nucleus Research CRM ROI Estimates Are Correct?

Article #3: Worketc’s Part 9 Can CRM Deliver a Tangible Return on Investment

If you’re looking to get a greater ROI from CRM, then you may want to consider a multi-purpose CRM solution that includes other features such as accounting and project management. You’ll be able to cut the costs of other solutions and increase productivity even more by being able to manage every aspect of your business from a single location.

Does this author really have any evidence that a multifunction CRM system or a larger scope has a higher ROI? What is curious is that this CRM vendor happens to offer just such a CRM system?

The end of the paragraph makes the typical “all in one” fallacy, that the more things you do from a single application, the better the ROI. There is nothing to support this after decades of vendors making this claim. Normally a vendor that makes the best software in one area makes inferior software in another area. Therefore, buying a broader scope from one vendor normally results in reduced satisfaction and reduced ROI. This is actually a major problem with ERP systems.

This article is a series of unsubstantiated assertions that are backward engineered to make their product seem like the best to choose.

This is the third article in a row like this. Articles that are filled with false information or unsubstantiated assertions are going to get a score of one.

Article #4: Business 2 Community’s Calculating ROI CRM Business Leaders Guide

Here we have another estimate from Nucleus listed.

And the signs are that if you get it right, you can quickly realize a very attractive ROI. In a recent survey of CRM decision makers, Nucleus Research discovered that successful projects are generating a return of up to $5.60 for every $1 spent.

This is lower than the previous estimate because it is older and Nucleus Research states that the ROI from CRM systems is increasing due to lowering prices and better products.

Notice the following quote.

Unfortunately, however, some CRM projects still deliver disappointing returns or fail altogether. Business leaders coming new to the market can see the wisdom of buying a system, but without first aligning their purchase with specific business requirements – essential for accurately forecasting a return on their investment – the missing link can become a fatal flaw in the project.

So what is the average ROI when the failed projects are included? Isn’t there a problem when only the successful projects are estimated?

This article pretty much falls apart at the end. It appears to be incomplete.

Article #5: Nimble’s ROI CRM Small Business

This is yet another article by a software vendor.

CRMs help to establish an optimized workflow within your sales and marketing strategies and can amplify your business by helping your work smarter, faster, and better — wherever your job may take you. The right Customer Relationship Management software (CRM) helps organize business processes and to identify the necessary leads or prospects to engage with in order to grow to scale.

This is typical. The CRM vendor assumes all of these benefits from CRM and makes it sound as if it is unequivocal.

More robust CRMs such as Salesforce can cost a pretty penny and might have too many features that your team has no use for.

This comment was funny. Salesforce is not only a low-quality system, but it is the opposite of robust. It has a very dated and weak set of supporting technologies. It is the opposite of robust.

CRM solutions can cost anywhere from $5/user/month to $500/user/month, but the average amount companies spend of a CRM is $30/user/month. Nimble charges $9 a month when paid annually for its basic contact plan, and $19 a month when paid annually for its upgraded business plan.

Cloud CRM solutions can indeed be very reasonably priced. In fact, given the low cost of so many cloud CRM systems, it’s difficult to see why anyone would purchase a CRM system from any mega-vendors that want inflated prices for a glorified online database.

However, overall, due to the incorrect information, we still scored this article low.

Article #6: Nutshell’s ROI of CRM

Nutshell is another CRM vendor. This article requoted the Nucleus Research study again.

According to a 2014 study by Nucleus Research, every dollar spent on CRM implementation returns as much as $8.71 in sales revenue.

And it continues..

Sometimes it’s hard to admit that your best practices are no longer the best. The data and analysis capability of your CRM may point to new paradigms for your business. Take these as as “growth opportunities.” Change means work, negotiation, and discomfort. If your business culture tends to see change less as an opportunity and more as a grumble-fest, your CRM will under-perform. And so will your business.

It is strange to hear software vendors describe CRM systems. They make them sound as if they are essential to sales. At Brightwork R&A, we don’t even use a CRM system but instead use Airtable to create a multi-tabbed database that allows elements to relate to one another. We have an email that tells us the dates of interaction, and then we record who we talked to per company, etc.. The biggest challenge is companies getting back to us after declaring a research interest. This issue is not solved with a CRM system.

A CRM vendor might say

“A ha, the CRM system can tell you how long it has been since you sent an email without getting a response.”

Yes, but I can also just create a field in Airtable that does that also. No, it won’t prompt me, but it is easy to look down a list. Secondly, follow up emails are much less effective than if the company gets back to you of their own volition. When a company drops off, that tends to be a sign of declining interest.

With what a simple online database can do and how it can be customized, it is improbable that a full CRM system would add much over something like Airtable. The highest-rated CRM system by Brightwork Research & Analysis is BaseCRM. However, I still prefer creating a CRM/customer database in Airtable. We have around 50 databases created in Airtable. The CRM-type or customer database is just one of many databases we have created with the application.

This article is ok, but it suffers from the same exaggerated claims of all the CRM articles by vendors, and it presents inaccurate estimations of the ROI of CRM. Furthermore, there is not that much in the article about the ROI of CRM systems.

Article #7: Productiv CRM’s ROI What’s the Value of Your CRM Applications

As we mentioned earlier, Salesforce licensing is complicated. Like many other firms, you probably have multiple licenses and tiers, which makes it hard to figure out whether the right people have access to the type of license they need. You wind up guessing which employees need access to specific features.

This is true.

With Productiv, you can assess CRM activity down to the feature and action so that you have optimal Salesforce CRM ROI. That information allows you to not only make better decisions about provisioning licenses, it enables you to make smarter renewal decisions.

With Productiv, you can understand who’s using your CRM, how they’re using it, and whether they’re getting the most value out of it by utilizing premium features. Productiv allows you to make better decisions based on data.

This is interesting. This is a vendor that makes SaaS auditing software. This article makes reasonable claims and measuring the use of systems important.

Article #8: Technology Consulting’s What is the ROI of Salesforce CRM?

This article begins as follows:

Your customer is your business. Whether you are a B2B or a B2C organization, understanding and serving your customer is the key to success today. A CRM is a system for just that. It aims to make it easier to build quality relationships with your new and existing customers. The resulting benefits of implementing CRM are quite significant.

This is an assertion that is hard to see how it could be true. CRM allows you to track sales progress. It does not allow you to build quality relationships.

When all your key business information is stored and managed in one place, you gain better analytics and reporting. With full views to your customer data, you can sell smarter, service faster, and market easier.

This is the same “single system” claim that has not worked out time after time.

Great things happen when teams work together. The research on this fact is prolific. But there are still a number of organizations that operate in daily silos. Perhaps your customer service team uses one tool, and your accounting another.

How does a CRM system reduce silos? Who else uses the CRM system except for sales? I can’t even recall other departments talk about CRM usage.

With the help of a CRM, you can better understand your customer. What they need, what they want, and their buying behavior. And when you can see the patterns, you can adapt your marketing campaigns to target them more effectively.

How is this true?

A CRM system only records information about a customer. This same information could be stored in many types of systems.

This all boils down to a better customer experience – and higher revenues. Don’t believe us? Research shows that 3 out of every 4 customers say they will spend more with a business because of a positive experience. If that doesn’t showcase the benefits of using a CRM, we’re not sure what does.

This is a spurious association. It is not established that CRM improves customer experiences. Normally a customer experience comes from experience with the item the salesperson is selling.

This article is chocked full of false claims and receives our lowest scores.

Article #9: Set Shape’s CRM ROI 5 Simple Formulas to Measure the ROI on Your CRM Investment

Shape uses the suspect Nucleus Research claim again.

According to the global tech analysis firm Nucleus Research, the answer to this equation is an average of $8.71. That means that, on average, CRM systems return almost $9 for every $1 invested.

Imagine if Nucleus Research estimated a very low ROI from CRM. Take a guess how frequently that estimate would be used in articles by CRM vendors.

Exactly, it wouldn’t. You will see also that there are other estimates for the ROI of CRM, but the articles I review in this article on the ROI for CRM all use the Nucleus Research estimate.

This article tries to position SetShape CRM as a good CRM because it allows one to be responsive to the customer by recording the contact from a web page and getting back to them. However, do you really need a CRM system for this? At Brightwork R&A, we have a contact box in the lower-left corner. People can leave a message, and we get back to them. SetShape proposes that you must instantly get back to customers. I suppose it can depend on what you are selling. However, we have deliberately disabled our instant chat, as we are both not interested in staffing the messenger for instant chatting. Still, if we were to enable it, we found that it emboldens readers not to think through their questions. We had a particular problem with Indians who thought we should solve technical problems for them for free.

Therefore, the claims made by SetShape about instantaneous responsiveness did not match our experience. And again, a messenger can be set to accept chats (and you can staff for instant messaging). This is not a CRM specific item.

Article #10: Workwise’s CRM ROI Justifying CRM Software

This is another article that just rolls out the standard arguments for CRM. There is not much at all about ROI.

Article #11: CRM Gamified’s CRM ROI Calculator

The article begins by referring to a study by Forrester.

The article begins with data from Forrester’s Total Economic Impact of Microsoft® Dynamics CRM 2011. The research states that a 2,000-employee diversified professional services composite organization, based on nine organizations interviewed by Forrester, would see a ROI of 245% as a result of the implementation of MS Dynamics CRM for 50 of its users. The return, according to the data, would turn positive (meaning the CRM “would pay for itself”) after 4 months.

This is far less than the ROI estimated by Nucleus Research. That is saying something as Forrester will always overstate the ROI of software, as they are normally paid by vendors and use vendor-provided data to make the estimate.

Then the article goes on to list benefits from a study by Perlta.

Peralta chooses to highlight a few indicators that contributed to the success of the CRM:

Sales
Acceleration of sales conversion cycle by 50% (teams worked better together across different business systems, processes, and geographies.)
Increased sales productivity of 5 percent
10% reduction in consultant time spent in proposal preparation
2% revenue increase due to improved deal conversion

Pablo Perlta provided this information. I had no heard of this person before. So I can’t comment on their credibility. The first improvement is substantial, but then one wonders why the other bullet points are comparatively

so low.

Something that is left out of this analysis is opportunity cost. A salesperson who uses the CRM system is not doing something else. Secondly, a 2% deal conversion, which is the real measure of the CRM system, is not very large. And with the time consumed by the CRM system, one wonders what other things could be done instead of focusing on CRM systems and improvement.

This is a reasonable article that provides some interesting statistics. However, what is clear is that there is very little supporting all of these claims.

Article #12: CRM Software Blog’s Microsoft Dynamics CRM ROI Calculator

At 338 words, this is barely an article and is not worth commenting on.

Article #13: Software Suggest’s How to Measure and Improve CRM RIO

And the Nucleus Research study appears again.

The importance of CRM can be identified from the fact that companies, on average, earn more than $8.71 for every dollar spent on the implementation of CRM, as per the study by Nucleus Research in 2014.

As has been noted, there is not much to support this conclusion. However, it seems that close to 1/2 of all the articles have referenced the study as a strongly supported fact.

Companies using CRM have witnessed more than 12% of improvements in their overall sales figure.
Nearly 90% of organizations are happy with CRM results and likely to use it for a longer time.
Hence, there’s no denying that the value of such systems does play a quintessential role to cater to your business needs.

Really? Because I deny it right now. First, where is the claim of 12% of improvements sourced? Where is the source for 90% of organizations happy with CRM because that does not match my clients’ experience? Many salespeople hate their CRM systems.

The sixth and last metric is nothing but the client retention rate. This will tell you the effort you need to put in for marketing activities to maintain your existing customer base. Furthermore, this will let you know the expenses related to your influencer marketing strategies.

Why is the retention rate measurement of the CRM system?

Yes, I am aware that CRM systems keep metastasizing in scope, but there is even less evidence that CRM systems are dual purpose for both sales and customer service than they evidence they are good for sales.  Customer service and ticket software is its own category. Should you be using CRM software for ticket management?

I don’t think so.

The article continues by describing how to measure ROI. Still, none of the beginning assumptions presented were demonstrated in the article, so the later part of the article is based on these assumptions, which the author has not provided evidence as true. In fact, the author appears to have a deficient standard of evidence himself. This type of article is going to receive our lowest score.

Article #14: Technology Advice’s Use Calculation to Find CRM ROI

This article starts with a surprising quote.

Implementing a customer relationship management (CRM) product can be a precarious undertaking. Estimated failure rates for CRM implementation (defined as not meeting the business objectives of the project) are typically high.

If that is true, then how are so many average benefits and average ROI figures so high?

The failed CRM projects must be averaged from the middling and the successful in arriving at the overall average. If the best outcomes are cherry-picked, then the study is not following any research standard.

The article points to CIO Magazine as the source for this. We will get to this article later.

This article continues to explain how costs and benefits work. It is generic coverage on these topics.

Article #15: EISGP’s CRM ROI How to Get What You Pay For

And here comes the Nucleus Research study yet again. My my, how these two studies from NR have gotten around the CRM ecosystem.

Nucleus Research says for every $1 spent on a customer resource management (CRM) software platform, the return is between $5.60 and $8.71.

And then, the article follows up with this quote.

Now here’s the bad news; HubSpot says 40% of sales reps don’t even use this tool to manage leads, instead relying on Excel spreadsheets or perhaps Rolodex cards to control their sales funnel and foster customer relationships.

This matches my experience supporting clients. I also notice this tends to be more experienced reps, less under the thumb of management to follow their orders no matter how much the advice does or does not make sense.

It is not true that sales reps universally see the value of the CRM system.

A CRM database serves as a data warehouse centered on client interactions, so marketing, billing, customer service, and other departments should all be able to use it as a centralized repository for information.

This gets back to the metastasized scope of CRM.

Metastasized CRM is the Best CRM?

Rather than improving applications, constantly cobbling on the new scope is often the death of applications. This is how Oracle DB became so bloated. Oracle won’t stop adding new functionality, much of which should not be in a database. One reason vendors do this is to block out other vendors. For example, Oracle is trying to block out virtualization by putting things in the virtual machine in the database.

Your CRM System is a Data Warehouse?

How can a CRM system be a data warehouse?

The definition of a data warehouse is it brings together data from many applications. Any CRM application is by definition not a data warehouse.

This is another example of application scope creep.

CRM for Billing?

And why is CRM now doing billing? There are plenty of good inexpensive invoicing applications out there. However, now the invoicing system has to be the CRM system?

CRM Cobbleathon

Previously when ERP systems were the hot application category, they were the central repository of information. Now that CRM systems are the hot category, they have gone from being a very narrow application to the central repository of information at least according to this quote.

This article is probably the most interesting so far, but not because it is accurate. Instead, this article perfectly illustrates how exaggerated expectations and scope are piled onto an application.

Objective ROI Information from Forrester

..interestingly Microsoft hired Forrester to conduct an analysis of CRM ROI for their Dynamics 365 product. Let’s look at what Forrester discovered about their online product.

Ultimately, Forrester cited Microsoft Dynamics 365 online as having a 75% CRM ROI rate overall, a figure that places the Dynamics CRM as a highly-rated product worth considering.

To find out more about Microsoft Dynamics 365, contact IES and let us show you the software and help you get the most for your investment.

What is Forrester’s History in its Vendor Sponsored Studies?

Any vendor can hire Forrester to show a positive ROI. We covered Forrester’s compliance to vendors in the article How to Understand Forrester’s Fake S/4HANA TCO Study.

Secondly, why is Dynamics CRM so low? 75%? We have come to expect between 560% to 870% from Nucleus Research.

IESGP would like you to contact them to see how to get the most from your CRM.

However, it makes little sense to buy any enterprise application from Microsoft. Dealing with Microsoft means dealing with highly corrupt Microsoft and their account reps. So I would be very fearful of what analysis I would receive from IES.

There are so many good inexpensive CRM systems, why on earth would anyone contact Microsoft to get caught up in their web of lies? Microsoft does not have any applications out outside of the Office Suite that is competitive with other applications in their respective class, and Google Docs is close to eliminating the historical advantage in the Office Suite. There is increasingly a reason to use Microsoft as a vendor for things outside of Windows.

Article #16: SugarCRM Presenting CRM ROI Leadership Team

CRM Return On Investment (ROI) is a complex topic. Many organizations are simply using ROI calculations to spice up presentations and aren’t using ROI metrics as a proven, valuable and trackable metric.

Yes, this is true.

And cue to the reference to the unsupported NR study.

So what is the return on CRM? Surprisingly, it’s a flat model. For each dollar spent on CRM, the ROI increases by $8.71 (it doesn’t matter if you’re spending $10,000 or $1,000,000 on your CRM investment). Interestingly, this model changes based on other variables:

Really?

That is the conclusion by NR? I don’t think so. Go back and read the study, and it does not say this—what a ludicrous extrapolation.

As an employee at a CRM partner who has done over 1,000 implementations, and interviewed countless successful customers for case studies, I know that productivity improvements are a large source of success for many organizations using CRM systems.

And apparently also done a lot fo lying about CRM. Even this sentence is misleading. The CRM partner (probably Deloitte, Accenture, etc..) has done over 1000 implementations. But how many did the author do?

This would be like saying,

“As an employee who worked for a company who served over 100 billion customers…”

That is McDonald’s. How many did you personally serve? That is your experience, not the totality of the company you work for.

Everyone Agrees on the Benefit of CRM?

But, as research companies have found in their studies, everyone discounts indirect benefits such as productivity. By using a correction factor, everyone can agree on the initial benefit and then discount it to be conservative. This usually satisfies skeptics and financial managers.

I would be careful with the term “everyone.” I’m afraid I have to disagree with these claimed benefits of CRM.

The article runs out of gas after one more paragraph. This type of deceptive article receives our lowest rating.

Article #17: CIO’s What To Do When Your CRM Project Fails

This is the article referenced in article 14 that we said we would get to later.

What is the Failure Rate of CRM Projects?

There are at least a dozen oft-quoted industry analyst reports that estimate the failure rate of customer relationship management (CRM) projects. The analysts’ methodologies and standards vary, so the resulting failure numbers are all over the place — between 18 percent and 69 percent.

That is a massive range. And failure is a relative term. I have seen many clients that don’t call their CRM implementation a failure but don’t get much out of the CRM system and the data in the CRM system is of poor quality.

This overall article has a very loosely goosey feel that I am uncomfortable with. Here is a sample of what I mean.

Was there real trust between the users and the project team?
Did any team members suspect each others’ motivations or required skills?
Were honest questions sometimes interpreted as challenges or even threats?
Did anyone throw a temper tantrum or threaten to quit?
Were some people simply unable to work together effectively?
Was any legal action threatened or invoked?

So this is moving into just standard project management advice and is not related specifically to the article’s title.

The article scores its only points in pointing out there is a large variance in the CRM project’s success. But it does not add much value after that observation is made.

The Logic for Stopping at This Point

There was really nothing new coming from any of these articles. And as we looked at more of the articles down the list in the search results. It didn’t seem as if there would be anything else coming down the pike if we continued to read more articles. So at this point, we decided that this would be where we would stop.

So now, let us get into the scores.

The Table of Our Scores

The following is a tabular form of the articles we just covered.

Conclusion

All of the articles reviewed above are quite repetitive.

• There were many false claims made in most of the articles.
• The articles were highly biased as most were written by those selling CRM software or consulting.
• Almost all the articles were written so that the author could put out a minimal level of effort.
• Few of the articles addressed the reality of the difficulty of an accurate CRM ROI calculation.
• Nearly all the articles appeared to presume that any ROI estimation of a CRM system would be positive and relied on industry-funded studies by companies not following research rules. However, none of the sources referenced are reliable.

The average score of the 17 articles reviewed was 2.3—the highest-scoring article coming from Productiv, which we scored a 7.5.

However, that was not the most interesting article. The most interesting article was by EISGP, which only scored a 1 out of 10. And it was so interesting because of how it proposed the benefits of enlarged scope CRM without providing evidence of the benefits of doing this or using this type of CRM system. We could find only one article, by Azamba, that asked if CRM scope has become too large. Since we could not find any coverage of this topic, we wrote an article on this topic right after completing it.

Overall, this highlights the low quality of information on CRM ROI, which is consistent with other poor quality information available on ROI on other software categories.

What Did We Expect?

We did not have great expectations of what we would find before performing this analysis. However, the results are far worse than we would have guessed.

It is difficult to say that any of these articles is worth the time to read. The only way it would be is if you were entirely new to CRM ROI.