Key Performance Indicators (KPIs) are measurements used to track the performance of a system, business, or activity. KPIs are used to assess the effectiveness of customer relationship management (CRM) strategies and to identify areas where improvements can be made. CRM KPIs can include metrics such as customer retention rate, customer satisfaction, lead-to-customer conversion rate, and customer loyalty rate. By using CRM KPIs, companies can assess their performance in customer relationship management and make informed decisions to improve that performance.

What is a CRM KPI used for?

Being able to report the effectiveness of a strategy or a campaign is essential when setting up a campaign or software. Accountability is a natural element in business, which is why it is necessary to be able to evaluate the performance of each mission undertaken. Let’s give ourselves a little time to define the KPIs of a CRM but also to make the distinction with the performance indicators.

Definition of a KPI

Measuring the success of a CRM strategy is crucial for evaluating the effectiveness of the efforts being made and for making informed decisions when it comes to managing customer relationships. KPIs (key performance indicators) are important tools for monitoring and evaluating the results of your CRM strategy.

They allow you to set clear goals for your CRM strategy, track progress, and identify areas that need improvement. There are different types, including CRM KPIs for customer satisfaction, sales performance, marketing performance, and team performance.

By using the right key metrics, you can track trends in your CRM activities like Dynamics CRM, identify growth opportunities, and make informed decisions to improve your business performance. It is therefore important to choose the most relevant key indicators for your business and integrate them into your decision-making processes to continuously improve your CRM strategy.

Difference Between KPIs and Performance Indicators

KPIs and performance indicators are often used interchangeably, but there is a fundamental difference between the two.

The first mentioned is a quantitative measure that makes it possible to follow the progress made in relation to specific objectives. they are generally used to evaluate the results of a strategy or an action plan and are generally linked to short or medium term objectives. 

Performance indicators, on the other hand, are measures used to assess the results of an activity, process or initiative. They are generally used to assess long-term results and can be used to assess the performance of the business as a whole. 

In summary, CRM KPIs are key indicators that track progress against specific goals, while performance indicators are measurements used to assess the results of an activity, process, or an initiative over a longer period of time.

The key CRM KPIs to measure the success of your strategy

It is important for each action plan to be able to check your key performance indicators at a given time, this allows you to be reassured or alerted to the various strategies put in place and above all to be able to observe the effectiveness. The key to performance is in our ability to interpret the figures and take action to reverse the trend towards the positive.

I- Customer satisfaction

Measuring the immediate performance of customer satisfaction allows you to understand how you can improve your brand images and what process your company has in place. Here are two examples of CRM KPIs to see more clearly:

#1 – Customer retention rate

Customer retention rate is a key KPI for measuring customer satisfaction and loyalty to a business. It is calculated by dividing the number of customers who bought again after a given period (eg, one year) by the total number of customers at the start of that period. The result is expressed as a percentage.

For example, if a business has 100 customers at the start of the year and 80 of them have purchased again by the end of the year, the customer retention rate is 80%.

#2 – The NPS

The NPS (Net Promoter Score) is an indicator for measuring customer satisfaction and loyalty. It is based on a simple question: “On a scale of 0 to 10, how would you recommend our company to a friend or colleague?” Responses are grouped into three categories: detractors (those who answered 0 to 6), passives (those who answered 7 or 8) and promoters (those who answered 9 or 10).

NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. For example, if 30% of respondents are detractors, 50% are passives, and 20% are promoters, the NPS is 20 (20 – 30 = -10).

II – KPI CRM of sales performance

Having an interface presenting concrete sales efficiency figures allows you to see the operational health of your teams at a glance.  

#1 – Conversion rate

Conversion rate is a CRM KPI that measures the percentage of website visitors who complete a desired action, such as making a purchase, signing up for a newsletter, or downloading. It is calculated by dividing the number of conversions (desired actions) by the number of visitors to the website and expressing the result as a percentage.

For example, if a website has 100 visitors and 10 of them make a purchase, the conversion rate is 10%.

#2 – Turnover per customer

Revenue per customer is a KPI that measures the average value of a customer to a business. It is calculated by dividing the total turnover of the company by the total number of customers. This helps determine how much money each customer brings to the business.

For example, if a company has total revenue of $100,000 and has 1,000 customers, the revenue per customer is $100.

Revenue per customer is an important indicator of customer profitability and the value they bring to the business. It is used to identify the most profitable and least profitable customers, to assess the profitability of marketing campaigns and to determine the cost of acquiring a customer.

III – Marketing performance KPIs

There are several that companies can use to measure the effectiveness of their marketing efforts: Email open rates, click-through rates, conversion rates, etc. 

#1 – Email open rate

Email open rate measures the percentage of recipients who have opened a marketing email sent by a company. It is calculated by dividing the number of emails opened by the number of emails sent, expressed as a percentage.

For example, if a company sends 1000 emails and 200 of them are opened, the open rate is 20%.

#2 – Click-through rate

Click-through rate is a KPI that measures the percentage of recipients of a marketing email or ad who clicked on a link or call-to-action in the email or ad. It is calculated by dividing the number of clicks by the number of emails opened or ads viewed, expressed as a percentage.

For example, if a company sends 1000 emails and 200 of them are opened, and 40 of these 200 have been clicked, the click-through rate is 20% (40/200*100%).

#3 – The marketing conversion rate

The marketing conversion rate is a KPI that measures the percentage of people who took a desired action (purchase, subscribe to a newsletter, download, etc.) after being exposed to a marketing campaign (email, ad, landing page, etc. .). It is calculated by dividing the number of conversions (desired actions) by the number of people exposed to the campaign, expressed as a percentage.

For example, if a company sends 1000 emails for a marketing campaign and 50 people sign a contract following this campaign, the conversion rate is 5% (50/1000*100%).

How to set up KPIs to measure the success of your CRM strategy

Implementing tools of this type requires upstream analysis work. To establish the real needs in terms of reflection and actions to be taken, here is how to properly implement CRM KPIs. 

Identify the objectives of your CRM strategy

The objectives of a CRM (Customer Relationship Management) strategy vary depending on the company, its target and its business model, but here are some common examples of objectives that companies can set:

• Increase customer satisfaction: by improving the quality of the customer experience, responding quickly to customer needs and resolving problems quickly.
• Increase customer loyalty: by creating a lasting relationship and offering exclusive benefits to loyal customers.
• Improve customer profitability: by identifying the most profitable customers and targeting marketing efforts to retain them.
• Improve customer segmentation: Using customer data to better understand their needs and segment them into relevant groups for targeted marketing campaigns.

It is important to note that the objectives of the CRM strategy must be clear, measurable, achievable, relevant and time-bound to be effective. It is also important to monitor them regularly to ensure they are being met and to identify opportunities for improvement.

Select relevant CRM KPIs

The selection of relevant KPIs for a CRM strategy depends on the company, its target and its objectives, as mentioned above here is a summary of the CRM KPIs that may seem the most relevant:

• Customer retention rate 
• NPS (Net Promoter Score)
• Revenue per customer
• Conversion rate
• Customer Acquisition Cost (CAC)
• Response rate to support requests
• Problem resolution time
• Problem solving time. 

It is important to note that this list is not exhaustive and there may be company or industry specific indicators that may be relevant to a CRM strategy. It is also important to choose the relevant KPIs according to the objectives of the established CRM strategy.

Set up a data monitoring and analysis system

Implementing a data tracking and analysis system for a CRM strategy involves collecting, storing, organizing, and using customer data to evaluate strategy performance and improve the customer experience. There are several key steps to setting up this system:

• Data collection: It is important to collect customer data from different sources, such as registration forms, satisfaction surveys etc.

• Automation of reports: This allows you after data collection to automatically generate KPI reports. In the absence of automation you can use excel formulas. The CRM allows you to harmonize this data and generate clear and precise reports.

• Alert generation and export: You can program the CRM like Dynamics 365 in such a way that alerts are automatically triggered. So you are warned when one of your indicators is not at the expected level. You can also generate scheduled exports according to your needs.

Integrate KPIs into decision-making and continuous improvement processes

Once the relevant KPIs have been selected and a data monitoring and analysis system has been put in place, it is important to integrate them into the decision-making and continuous improvement processes of the CRM strategy. Here are some key steps to achieve this:

• Regular monitoring: It is important to regularly monitor selected key indicators to identify trends and opportunities for improvement. Data should be collected regularly and analyzed to spot trends and identify opportunities for improvement.

• Establishing performance thresholds: It is important to define performance thresholds for each selected KPI to know if the performance is satisfactory or not. These thresholds should be based on industry standards or the company’s past performance.

• Decision making: Collected and analyzed data should be used to make CRM strategy decisions. The results should be reviewed to identify opportunities for improvement, trends and issues.

• Continuous improvement: It is important to have continuous improvement processes in place to keep improving the CRM strategy based on KPI data and results. Corrective actions and improvements must be put in place to achieve the objectives of the CRM strategy and to improve the customer experience