See It in Action
Construction Customer Relationship Management (CRM) software helps businesses convert prospects into customers, nurture leads, and retain existing clients throughout the customer lifecycle. For construction companies, a CRM like ProjectMark’s can significantly enhance relationships with clients, increase loyalty, improve close rates, and boost profits.
In the article, we’ll explore what exactly a construction CRM does, how to define and calculate the return on investment (ROI) you’ll get from a construction CRM platform, and why it differs from traditional CRM tools. We’ll also delve into key performance indicators, and the tangible and intangible benefits that contribute to a comprehensive construction CRM ROI analysis.
A CRM system like ProjectMark’s assists construction firms by identifying key workflows to tailor solutions that maximize efficiency in these areas. By doing so, the CRM saves hours, reduces costs, and significantly enhances ROI across all the following areas:
A construction CRM streamlines project pipeline management, enhancing visibility and control. Optimizing project tracking significantly boosts ROI through increased project wins and efficient resource allocation.
Effective relationship management is critical in construction. After all, construction is a people game. A CRM helps maintain and nurture client relationships, leading to higher customer retention and repeat business, directly impacting ROI.
A construction CRM improves task management and collaboration by centralizing communication and assignments. This allows your team to get aligned with all tasks related to project pursuit prep or ensuring you’re staying top of mind with the right people involved in the construction project pursuit phase.
A construction CRM enables data-driven decisions by comprehensively understanding KPIs like your win-loss ratio, top-performing sectors, and clients with whom you have the best historical success. These insights are fundamental for effectively deploying your resources and energy and increasing your ROI.
Post-contract data management is streamlined with a construction CRM, ensuring all project data is organized and accessible. This accessibility is crucial for responding to RFPs or prepping for project interviews, ensuring you include the most relevant and up-to-date data for every project pursuit. This efficiency reduces administrative burdens and saves valuable hours.
A construction CRM makes it simple to pull together the company assets, team resumes, and project history to create beautiful and impactful RFP documents. This leads to greater engagement, quicker responses to opportunities, and increased chances of winning contracts which boosts ROI.
Effective CRM usage unifies commercial strategies and leverages multi-threaded engagements, leading to revenue growth that, on average, outperforms competitors by 50%.
Understanding the ROI of a construction CRM system is crucial for construction companies looking to optimize their operations and enhance profitability. Read our blog about maximizing your return on investment and getting the most out of your construction CRM to learn more.
In the context of a construction CRM platform like ProjectMark’s, ROI is measured by the efficiency gains and increased revenue opportunities resulting from the CRM's implementation. Based on what we’re seeing with current clientele, ProjectMark estimates an average time savings of 50 hours of work per year for each user, translating into more time dedicated to business development and improving proposal quality, which ultimately increases the win rate for new projects. And this time savings will only continue to increase as the platform evolves and more features get added.
When calculating ROI for a construction CRM, several KPIs are particularly relevant:
For instance, consider a scenario where:
Using these metrics, ProjectMark demonstrates its ROI by calculating as follows:
(50 hours saved per year x 5 sales team members) ÷ (25 hours per opportunity) x ($3,000,000 average contract value x 5% win rate) = $1,500,000 in potential growth.
To spell it out in a less math-y way, that calculation shows that ProjectMark’s CRM system can save your team 250 hours per year, allowing them to pursue 10 more opportunities annually. At a $3,000,000 average contract value with a 5% win rate, this translates to an estimated $1,500,000 in growth!
Unlike traditional CRM tools that focus primarily on client acquisition, a construction CRM also emphasizes maintaining key vendor, project partner, and client relationships. This approach ensures that time and resources are spent effectively, enhancing both new business opportunities and the quality of existing relationships. This concept of Return on Relationship Investment (RORI) is critical in the construction industry. So critical that we just wrote a whole blog about it! It highlights the importance of spending resources in the right places to strengthen relationships, which in turn boosts the chances of securing quality projects. Strengthening relationships leads to better traceability, accountability, and streamlined team workflows.
ROI calculations for a construction CRM should account for both tangible benefits (such as time savings and increased win rates) and intangible benefits (such as improved relationships and workflow efficiencies). For example, identifying data patterns that reveal why certain projects are lost can help companies adjust their strategies, leading to better project selections and higher success rates.
ProjectMark has designed an ROI Calculator to help construction companies quantify these benefits.
Check out this new tool now featured on our website.
Now you’ve reached the end, you might be wondering, "I already have enough business, so why should I invest in this software?" Fair question. But you see, a construction CRM isn't just about getting new projects – it's also about maintaining and improving ongoing relationships. This ensures your thriving business is sustainable and sees longevity. On the flip side, perhaps you're a general contractor facing shrinking profit margins due to intense competition in the bidding arena, and you might find it hard to justify investing in new technology. Once again, it's all about relationships. Retention and satisfaction of vendors, project partners, and customers are key competitive advantages in today's crowded marketplace.
Calculating the ROI for a construction CRM requires a unique approach involving a thorough analysis of both quantitative and qualitative metrics. Our soon-to-go-live ROI calculator is designed specifically for this purpose because the benefits of using a construction CRM are extensive, and this tool will give greater clarity and visibility to what that extent would look like for your construction business. For those interested in exploring the full potential of a construction CRM, request a demo today and see the ProjectMark platform in action.
