What is to consider to evaluate the cost of your CRM ?
A CRM is not a simple software that can be quickly installed and used directly like many software. Or at least it shouldn’t. Because a CRM can take multiple shape and can be adapted to many different kind of company of multiple sizes the work underlying a good implementation can vary a lot. For this reason, the price will change a lot depending on many factors. Different aspects must be considered to properly understand those costs. Before everything else the CRM is supposed to give you the best Return On Investment possible over time. This being said, choosing the proper CRM also mean that if you are to pay more at first for one solution rather than another, this solution is suppose to give you a very good reason to do so in the long termThe platform SaaS
While it was a crucial question in the past the market tend to move to SaaS as the main deployment means, it gather many advantages (limited maintenance, regular update, accessible anywhere/anytime/anyhow…) with limited drawbacks (you need to insure where is stored your data and if the supplier comply with your requirements such as GDPR, you rely on the provider for availability).Choosing the right CRM :
We can’t stress this enough. Taking time to choose the proper CRM at the beginning is the cornerstone.
This means :
- Understanding your needs and expectation : goals to achieve, priorities, improvement, need and expectations not only from the management but also from each department perspective.
- Comparing those with what you have : gathering data to see if those needs are relevant according to what you already have.
- Find what offers are in the market : Having identified the best offers for your company you will then need presentations and demos from them.
CRM Subscription and licenses :
Knowing what offers are on the market and choosing the right one also means understanding the cost that they imply.
The kind of CRM itself : The price of the subscription itself can change a lot from one CRM to another. Some are free (careful though on that free often means no service/support) and others will cost hundreds every month… This price will depend on many factors : how customizable and how powerful the software is, what services are offered (assistance, maintenance,…), it’s popularity, it’s specialization, scalability etc…
To give you an idea of the differences this can imply let’s have a look to two major CRM tiers on the market :
Salesforce is the CRM market leader. It is highly customizable and very powerful but also quite expensive : The professional tier will cost 75€ / user / month and 150€ / user /month for the company tier (Price @Apr-2018). And most marketing/reporting/mobile/service function will comes as extra
Zoho is also a very popular CRM but way cheaper. Zoho is building up steam as it’ has a good balance between functionality & investment. Though it is less powerful and customizable than other CRM leader like Saleforce, it is definitely a smart & cost-effective choice for small and medium companies wanting to implement their first CRM. The professional tier will cost 20€ / user / month and 35€ / user /month for the company tier. 50€ / user / month for zoho plus including reporting chat etc… (Price @Apr-2018)
The licences / monthly fee : If the kind of CRM you choose will have a major impact on the final cost,the company will most likely have to invest in several licences / monthly fee. Indeed, as we already said in a previous articles [Link] , connections between key actors in the company is the key of a good use. But If you need multiple user connected at the same time you can’t just ask all the company to use the same licence. For this reason you will have to consider the price of licence and get the right number of it to be able to use the CRM as well as possible but not to spend too much in unnecessary licenced.
The number of licence will be closely related to the kind of licence you will purchase. To get the right number of licence it is important to distinguish the two kinds of licence usually available. One is dedicated to one user (Or at least IP), these licences is usually cheaper but you will have to buy one for every single user of the CRM. Another kind of licence is allowing a number of connection at the same time. This kind of licence is more expensive on itself but it can allow you to purchase less of it.
The Implementation of the CRM :
Given much the CRM flexible and user-friendly it is, Believing that the implementation will go smoothly in few days will undoubtedly lead you to a costly disappointment. It is easy to understand that a very flexible and powerful tool can’t perfectly fit the specificities of a company without spending some time and work in it. Therefore, the implementation must be considered on itself. It is important to take the time to do the implementation with care and this can be a costly process. Why? Because at the end of the day, if this is done properly you should be able to exploit the CRM at its best. This cost is an important investment to get a proper ROI on the long run.CRM and training :
Every medium and big company knows that defiance and resistance to change from the teams can hold back the best projects. A proper training will reduce this issues as you will be able to explain what are the goals and what advantages they can get from it. Involving employees and making them understand what are the key point will allow your company to avoid many human mistakes. This process takes time but it is what it takes to to make the project work properly. As always with a CRM you will have to think long term from the beginning for it to be as profitable as it can on the long run.CRM and Maintenance :
Having the most effective CRM well implemented will be of no use if you are not able to update it and to manage software and human issues. The CRM will help you a lot over time but this also mean that you will rely on it to do so. A crash might happen and you should be capable of managing the issue as soon as possible. Many options exist but each of them has a cost. Whether you choose to manage everything internally with your own IT team, to hire a consultant or to take a inclusive CRM licence including maintenance you need to take maintenance in consideration in your overall cost.Total cost of ownership :
To calculate your total cost let’s take an example, you have 3 sales person and 2 marketing person, and you have come to choose Zoho after seriously vetting the competition (by yourself or through a reliable independent consulting firm). You don’t have much in place so the customization will be limited (fields, and reports mostly). You want to automate a bit your workflow especially around leads coming from your website.
- License / monthly fee = 5 x 50 x 12 ~ 3,000 USD
- Implementation + training + support/ change 20 man days @ 600-1200 USD ~ 18,000 USD
- Your staff time (project leader / key user) say 30% of 1 sales and 1 marketing (salary 3,000 USD per month for the example) for 3 month then 10% for 6 month ~ 30/100 x 2 x 3,000 x 3 + 10/100 x 2 x 3,000 x 6 ~ 9,000 USD
Total : 30,000 USD
Conclusion
A CRM is a wide, powerful interconnecting tool allowing your company to think the long term but the first steps can be costly. Therefore implementing a CRM is not a decision to be taken lightly. Considering every cost on the short, medium and long term is already to adopt the right perspective to avoid disappointment on the long run.
The cost of a CRM in short
If you want to evaluate the cost of your future CRM you will have to consider :
Unless you have a very strong case against, go for SaaS CRM
The choosing of your CRM : Finding the right CRM means a proper understanding of your company and the orientations you want to take but also what are the offers on the market.
The kind of CRM and licenses you need. The services and flexibility of the CRM will induce a big difference of price between brands. You will also have to consider the kind and the number of licenses that you need to get the best out of your CRM.
No doubt that the implementation can be a long process but there is no good shortcut to avoid it. If you want to get the best Return On Investment you will have to adapt your CRM to your company’s needs as well as you can.
A proper training is about reducing the risks of slowing down the whole process because of bad habits and resistance to changes. The importance of this part is too often underestimated and can be quite costly.
After the implementation and the training you will have to be able to maintain the system running. The strength of a CRM can also its weakness if you can’t rely on somebody help the employees using it properly or in cases of cash.
Estimate your total cost so as to have a proper budget