How to calculate CRM costsSchedule a Free Demo
CRM is definitely a solution that every company needs at one point. However, the cost can substantially vary, depending on multiple factors. One question that all companies must ask at one point is how much will everything cost? Do not dread the answer, learn how to calculate CRM costs and correctly evaluate your budget.
Different categories of CRM costs
When buying software as a small business, you always need to think about the cost. As with everything else, when thinking about how to calculate CRM costs, you need to consider two categories:
- Transparent costs;
- Hidden costs;
However, something that people don’t understand is that money is not the only currency you will spend in this case. CRM implementation also requires a lot of time and effort. With that in mind, you need to think about the best ways to use both time and money when purchasing a moving company CRM solution.
Give me a ballpark value
Do not be disappointed, but there is no ballpark value when it comes to CRM costs. It all depends on the type of vendor you choose, the features you need, and the number of users. Some companies charge a monthly plan per a fixed number of contacts and users. For example, you may pay $100 for 1000 contacts with up to 50 users. Another option is a per-user license that can cost around $150 on a high-end, and $10-15 on a low-end deal.
There is also the implementation price, which can range between $1000 and $5000. However, some companies do the implementation and migration for free and only charge a per-user license. You may even find some vendors that charge a flat fee, no matter what the quantity is.
Transparent fees of CRM platforms
Transparent fees are the most obvious ones to notice. They include subscription or service level costs, costs per user, and potential implementation fees. Service level costs depend on the plan you purchase, the number of contacts or users, and whether you want additional features or not. The suggestion is to only purchase features you will need to run the core of your business. You can always upgrade later and get add-ons that will make the job easier.
When it comes to transparent time investments, you will mostly spend time on research of potential platforms, preparing data for migration, implementing the CRM system, and training the people.
Another element that will decide the cost is whether you want a cloud-based CRM solution or on-premise. The main difference is that cloud-based CRM lives online. Your company pays a subscription to get a license. Cloud computing is always a more flexible solution because you can access the platform from all devices.
If you decide on the on-premise platform, that means you are purchasing the entire application and hosting it on your server. You are also responsible for all maintenance and updates. A cloud-based system is more popular, and cheaper than on-premise.
Potential hidden fees to think about
Remember, whatever you hear from vendors, know that hidden fees always exist. They can come in many forms, so don’t allow them to surprise you.
When it comes to CRM, the most common hidden fees are service fees you never knew existed or premium add-ons you thought were free. Furthermore, think about hidden time fees as well. You will probably spend a lot of time in the beginning, trying to figure out why some features don’t work the way you thought they are.
Hidden fees are never pleasant, and they can appear for two reasons; either the vendor was not completely honest about the costs, or the customer didn’t ask the right questions.
Where to look for hidden fees
Customization of the platform may often create additional fees. For example, adding more users, or enabling features that were not offered as a part of your plan. Furthermore, overtime implementation hours can also cost more. That happens if your company needs to speed up the implementation process. Data migration can also be charged additionally, and some vendors also charge for the staff training or customer support. CRM training is valuable, so that does not come as a surprise.
To avoid all of this, speak with your chosen vendor in great detail about the plan you are purchasing. For customization, check if there are any limitations to adding users, creating dashboards, workflows, or pipelines. Furthermore, make sure you don’t need to pay extra for adding custom fields, or managing and adding permissions.
Another important question to ask is whether the data migration is included in the price or not. The same applies to staff training and customer support. Have in mind that some vendors offer free specialization courses as a one-time thing. Additional sessions are usually charged.
Premium add-ons and additional features allow you to improve the processes you use for your business. Ask your vendor to explain how these are paid. For example, you might purchase an add-on that will help you organize and send e-mails to clients. However, check if sending e-mails comes with a per-user or per e-mail cost. All of these questions will teach you how to calculate CRM costs more precisely.
How to calculate CRM costs explained
Let’s do a quick summary of CRM expenses. There are hidden and transparent costs that require both additional finances and time spent. Have a detailed meeting with your vendor to understand what type of CRM you need, how much the plan costs, and what features it supports. Furthermore, speak about the implementation process, staff training, updates and add-ons, and customer support.
To understand how to calculate CRM costs, you also need to invest a lot of time. The selection process needs to be tough, so make sure you know exactly what your business needs and what your budget is. Otherwise, you are risking a situation where you start the implementation process only to realize that this platform does not provide everything your business needs. At that moment, you need to stop everything and look for a different vendor, wasting both time and money. Be clever when purchasing CRM, and take the time to do it properly!