As Customer Relationship Management (CRM) systems move from being “nice to haves” to essential tools in keeping businesses competitive, their implementation is growing at a rate to match. And of course, price and cost play a vital role. However, the price of a CRM system is more than just the cost of the software and IT.
When budgeting for a project, assessing quotes from a solutions provider, or just trying to get a realistic idea of how much you’ll need to spend, here’s a guide to some of the key factors you need to consider.
1) Software Costs :
These usually consist of:
the price of software licences
the price of software maintenance.
2) Professional Service Costs:
Professional services refer to what you need to get done to get your CRM system up and running. They can include the costs of everything from scoping the project to software configuration, hardware and training. They include internal costs (such as the time of your own staff) as well as the price charged by your solutions provider.
3) Support Costs
Support costs generally refer to the price of assistance to keep the system going. They will usually include the costs of technical support, administrator support and user support, such as access to a help desk. Sometimes support costs include CRM software maintenance costs: it depends on wording and the vendor.
Building a system from scratch?
If you decide to build or implement a system yourself, you’ll need to include several other factors in the price. Probably the most significant costs will be developing or acquiring the wide mix of business, administration, management and technical skills. Do not underestimate how important these skills are to a successful CRM project. And if you go down this route, you’re well, quite literally, on your own.
So, assuming you intend to employ the help of a solutions provider, here’s a look at each of the three main areas of project costs in more detail:
The Price of CRM Software
Working out the price of software licences is usually straightforward. There will be a price for a single user licence, number of users or multiple user licences. Remember to allow for expansion with the number of software licences you buy: the number of users can quickly grow as the benefits of using it become apparent. It can also be useful to have extra licences on hand ready for new staff.
When buying CRM software there’s sometimes the choice between named or concurrent licences: most businesses prefer concurrent. Note some vendors only supply software licences in batch quantities, so you may have to buy 5, 10 or 15 etc.
Maintenance costs are to cover when the software manufacturers update, alter or modify the product to correct faults, improve its performance or adapt it to work under new conditions. This is usually charged as a separate line item per software licence, as a set annual fee (a bit like insurance). Some resellers make maintenance charges compulsory – meaning you can’t buy licences without maintenance. If it’s not a separate item check it is included in the licence or support price. Don’t buy CRM software without maintenance.
The Price of Professional Services:
Here’s where working out the cost of a CRM project starts getting more involved. Unlike software licences, which have a clearly identifiable unit price, professional service costs are not directly user-based. What’s more, professional services costs can be the largest expense – mainly because they encompass such a wide variety of different tasks. They also vary due to installation type, degree of customisation, business, solutions provider, level of integration with other office systems and so on.
A good starting point to estimating the price of professional services is by producing a project-scoping document. Once you’ve identified your business requirements, a project scoping document will help show what needs to be done to realise these requirements. It’s recommended that you use an experienced project manager or consultant to produce this, which may of course incur a charge in itself. However, you may be able to negotiate on this if you choose to work with the CRM solutions provider who produces the scoping document.
Depending on the nature and complexity of your CRM project, the project-scoping document may include:
Business process analysis
CRM project specification
Sales, marketing, and customer service systems design
Internal resources required (you’ll need high levels of input, and hence staff time, from several key areas within your company)
Project Management
CRM system design
System build and configuration
Data import
Data cleansing
System installation
Various levels of training
Internal procedure rewrite, updates
Hardware installation and upgrades
Additional software requirements
Depth of system integration to other office systems
There are identifiable issues that affect each of these elements, the complexity of a CRM project and hence the level of professional services you require.
For example, the price of your project will be affected by how much ‘out of the box’ software functionality you intend to use and the level of system configuration required. The sophistication of your reporting requirement will influence system design, while the number of staff, their existing skills and the system complexity will affect the levels of training. Existing IT infrastructure will dictate whether you need to buy additional hardware and software, and degree of change to your current customer facing procedures will also influence overall costs.
Data is also an important consideration when determining the price of professional services. Depending on what you do with it, it can take up significant internal resources. Usually your own staff are the best people to work on your data because they work with it day in and day out. You need to think hard about the value of existing data: how much of it will you use, what format is it in, how much reformatting is required and how much cleansing is needed. Data that’s taken years to build up may be heartbreaking to part with, but similarly it can also be over-valued, particularly if it’s going to take up skilled staff time to assess, cleanse and reformat. Do you really need to keep details of contacts from web-enquiries four years ago? Or even six months? It depends on your business. If you’re going to clean your data, a new CRM project is the ideal time, but don’t underestimate the work involved.
Once you’ve identified the professional services you’ll need, you can cost each factor – usually by working through the scoping document with your CRM solutions provider.
Costs of System Support
The price of CRM system and software support will depend on what’s offered by your solutions provider and the level you choose to take.
CRM solutions providers vary in terms of what they offer and how much they charge. However, most will be able to offer some level of support. If they don’t, or you prefer not to pay for a support contract, then if a support issue arises it will probably be priced as a professional service.
A typical support structure may include:
User assistance and support – ideally via a dedicated support line. Make sure it uses trained support staff who can answer questions from all levels of user: from ‘How do I…?’ to technical details.
Administrator assistance and support – again this should be via a dedicated support line to address issues connected with the running of the system.
Supply of software corrections and revisions (may be included as maintenance).
“Bug” reporting and control.
Remote intervention and remote diagnostics – web dial-in, with controlled access.
Self Service – some of the better CRM solutions providers offer 24/7 access to an online support centre. These will typically allows you to find out how your issue is progressing and provide access to a knowledge base.
Other CRM support costs to consider are system administration, additional user training, on-site visits, system developments and additional licence installs.
So How Much does a CRM System Cost?
It depends on your business requirements, what you want to do and how you’re going to do it.
Make sure you involve key staff from marketing, sales, customer service, IT and finance. The factors which need to be taken into consideration when pricing a project can be quite subtle, particularly because of the different requirements between businesses. This is where the input from experienced CRM specialists can be invaluable.
As well as costs, an independent CRM specialist can advise the best software to suit your business needs – what you want to achieve from it, your sector, your customer requirements, how it will fit into your existing systems and processes, how it will integrate with other business software, and of course your budget.
Concentrix is a leading UK Independent CRM Specialist
. Formed in 1999, Concentrix
provides a full range of CRM Software
and related services, working closely with key providers including Microsoft, Sage and FrontRange.
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The Many Facets of CRM Software
When hearing the term CRM, or customer relationship management, software, a person generally thinks that it’s a fancy, computerized address book. They don’t think that there are any other reasons for using this type of software. Those who don’t use CRM don’t see the point in it. They fail to realize what it can really do and how much it has to offer as a multi-faceted technological tool for keeping track of a growing customer base. True, it does keep track of names and email information and addresses.
Why shouldn’t it? Those things are important and too many people today have trouble with their businesses because they lose those kinds of things – and therefore lose customers as well. People who spend money with your business don’t want to be forgotten; they want to be remembered and appreciated. CRM software can help you do that without breaking the bank and without feeling that you have to wrack your brain every time someone walks into your store or calls on the phone.
Some customers will certainly stick in your mind – perhaps they made a very large purchase, have a unique name, or are a bit eccentric. For the majority of people, however, they are forgettable from a business standpoint not because they are unimportant but simply because there are so many of them. CRM software is a great way to ‘remember’ not only their names but their preferences and what they’ve purchased in the past. If they’ve called customer service with a problem or even just with a comment it’s important that the information they provide be stored so that it can be retrieved next time. The people who call in to customer service or who shop online, on the phone, or in person often don’t think about the way that their information is collected and stored, and they don’t understand what CRM actually is. When they want to do business they simply expect everyone at the company to know who they are and take care of them – which usually does happen, but sometimes the computers are down and this causes issues.
For the businesses who use CRM, there is a lot that can be done with it. Conversations are recorded and information is collected and stored so that people don’t have to give their information again and again. It’s important for them and it’s a convenience that wasn’t available before CRM became popular. For those who do not want their information out there for everyone to potentially hack into, however, there is little that they can do to hide it. There are no opt-out lists for this kind of information because companies say that they need to keep it for billing and for other issues. Companies will not erase it for you, and even if they did the call that you made to ask them to do so would be recorded ‘for quality assurance.’ CRM is here to stay, and businesses – as well as most consumers – are very glad to have it.
If you need assistance with CRM, visit a site focusing on CRM software
The site provides reviews on everything from web based to various open source CRM solutions. Not only that, the site gives salespeople the tools to make these tools even more effective. To have Michielle Beck write for you, contact her through her Website
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