“How much does CRM cost?”
Many people ask me during the first meeting “How much will CRM cost?” and the obvious response is “how long is a piece of string?”
CRM costs can vary massively, we have implemented systems for a couple of thousand to hundreds of thousands – so it really is that varied.
What many people do not know about CRM is where all the costs lie and what to think of when building a budget. These days there are a lot of ‘free’ CRM offerings and even the clear per user/per month costings can be a bit misleading for those calculating a budget as the software is just one element of a CRM project.
I break CRM costs down to the three key areas – Software, Services and Support.
CRM Cost 1: Software
This is the easiest thing to work out and the most fixed cost. This usually comes from the author, in our case Microsoft. There can be many options of how to buy licenses (own it and pay everything up front or subscription based cloud offerings). You must work out what is best for you and even calculating both over 5 years can help you see the Total Cost of Ownership. More and more people are moving to the cloud and this is the easiest one to price up (On-Premise has lots of different agreements – Enterprise, Open Value etc.)
First you need to work out the number of the users and then you must work out the roles they will be doing within CRM. Will they be full users or will they just be using it to read and update contact information? Sales or Customer Service? Provide this information to your CRM partner and they can advise on the license breakdown and the associated costs. Sorted.
CRM Cost 2: Services
Now the complicated bit. These costs cover all the services you pay a CRM partner to assist with the design, build and implementation of your CRM. This looks at the length of time they require to implement the system to meet your requirements. This can vary massively and can change based on budgets. If you have a limited budget then you may take responsibility for a number of tasks – these may include some data migration or training other users. There are also options to get training on customisations/administration to allow you to change some forms and build reports without the requirement to pay your CRM partner. This all depends on your budget as well as the resource you have available internally to do the CRM work. Although there may be a cost to pay a CRM partner to do it, it is likely they can do it much quicker/better than your resource and allows you to get on with your normal day job.
CRM Services can be broken down in to many areas but usually cover:
- Analysis/Requirements Gathering
- Install and set up
- Security configuration
- Screen designs, system views and workflows (automation)
- Custom development
- Data Migration
As you can see, there are a lot of areas involved in a successful CRM implementation and it is not just a case of “put it in and see what happens”. CRM is just a piece of software, how you design, build and use it are key to the success. The more you put in to a CRM the more you will get out.
Speak to your CRM partner and discuss potential budgets early on, there are usually more than 1 or 2 ways to do anything in CRM. If your budget is low then the partner can look at a more basic way to meet a requirement – it may not be ideal but it could be a first phase that could be developed later.
Another thing to think about is future phases. My experience is that almost every company starts to get a vision half way through the implementation process. They start to see the screens and understand better how their system will work for them. This gives them ideas of new functionality and can often cause “scope creep”. It is key to budget for these before you begin (although it is difficult), and you can always park some of these new ideas to the side and look at doing them in Phase 2 or 3 once the initial system has been embedded into the company.
CRM Cost 3: Support
The backup you need to maintain your system. This is usually an annual cost that should be calculated on the number of users or complexity of your system. This is the CRM Partners estimation of the amount of time you will need help/support in that year. Make sure you understand what is included and how the support is handled by the CRM Partner.
There is sometimes a bit of resistance with support costs – however the best way I try to explain it is comparing it to insurance. It isn’t always something you like to pay, and you hope you don’t have to use it but you are very grateful when something goes wrong and you have someone to call to help.
You should always have a CRM Administrator that can act as a first line support however there will be issues that are a bit more complex that will require a CRM Partner with experience. Your CRM Administrator should log the calls with the CRM Partner and build the relationship, this way there is a transfer of knowledge and you gain greater independence for the future.
A bit of a long blog but there is a lot to consider when implementing a CRM system. Be wary of people who simplify the process and imply “it just works” when you install it. Be open with your CRM Partner about your expected costs and work with them to get the most out of the available budget. Also, when building a budget always remember the potential cost savings (from automation and streamlining processes) and the additional revenue (more sales/quicker deals/less missed opportunities) that could come from investing wisely in a CRM solution. As always, get in touch if you want more details about planning a CRM project.