CRM metrics

What CRM Metrics Should Your Small Business Be Tracking?

Last week, I highlighted five CRM metrics you should be tracking. This week, I’ve got five more to share.

Let’s get started!

Customer Retention Rate

This one’s pretty self-explanatory. Your customer retention rate refers to how many customers you retain over a period of time. To figure this out, you must first specify your time period. Subtract the number of new customers you acquired by the total number of customers you have at the end of that time period. Then, you divide that number by the number of customers you started with during that period. 

In other words: 

  • Customer retention rate = (total customers – new customers) / existing customers 

How to use:  If you have 1,250 total customers at the beginning of the year (total customers), gain 500 more (new customers), and have 1,000 customers at the end of the year (existing customers), then:

  • Customer retention rate = (1,250 – 500) / 1000 = 75% 

This CRM metric works well when determining how many new customers you need to acquire to meet other benchmarks. If your retention rate varies, it could indicate that you’re doing something right or need to improve your processes. 

New-Net Revenue

This CRM metric tells you how much you’re making from your new customers. Since this is net revenue and not gross revenue, the formula is as follows:

  •  Net revenue = Gross revenue – expenses 

How to use: Suppose you picked up ten new customers this month who purchased $1,000 in product (a.k.a. $100 per customer on average). If the products cost $10/each to make ($100 altogether) and you spent $250 in marketing, your new-net revenue is: 

  • $1,000 – $100 – $250 = $650 

Quota Attainment 

Your quota attainment measures how close you reach or exceed your sales goals. This CRM metric is pretty common in sales, but it’s also applicable in other business situations. Here’s the formula:

  • Quota attainment = Completed sales / quota period 

How to use: Your quota is a great benchmark when prospecting new customers. You can gamify it by trying to exceed previous goals or hire someone to do the work for you. However, keep in mind that your customer quality still matters. If you’re hitting sales quotas but have a poor customer retention rate, it’s time to examine your pipeline. 

Upsell Rate

Regarding sales, this CRM metric tells you how many new and existing customers upgraded their purchases. Like others, it’s a simple formula:

  • Upsell rate = # of customers upsold / Customers approached about upselling

Note: You’re dividing your upsell rate by the total number of customers you’ve approached, not your total number of customers. If these numbers are different, your upsell rate will be inaccurate. 

How to use: Are you trying to convince customers to go up a tier in your service offerings? Reach out to your base and make the pitch! The better your pitch or offering, the more likely you will have a higher upsell rate. If you get crickets, then it’s time to reassess your offering. Maybe it’s not aligned with what your audience wants. Either way, you’ll be better prepared next time. 

Depending on your customer base, you should first ask for feedback regarding what you’re selling and what other pain points you may be able to address. Then, A/B test your pitch to a small percentage of your customers before reaching out to everyone on your list.  

Net Promoter Score

While reaching out to customers, ask them how happy they are with your current offerings and if they are likely to become brand ambassadors. This CRM metric doesn’t have a formula. It’s a simple scale tailored to your brand. 

How to use: Include a survey with a straightforward question: How likely are you to recommend our product or service to others? Then, provide a scale of one to five (or ten, three, whatever works) and a comment form. Those on the “very likely” end of the scale are your brand promoters. If you’ve got a few responses on the “not likely” side, read their comments to see where you can make improvements. This type of feedback is extremely valuable because if one person is having a poor experience, others may be, too. 

Final Thoughts on CRM Metrics

Even after highlighting ten CRM metrics between this post and last week’s, there are still plenty more that can indicate how well your business is performing. Figure out which metrics are most relevant to you, and track them periodically to gauge your success.