One of the significant challenges businesses owners face is fully understanding the costs of implementing different CRM systems. There is a lot of bias to look at the annual licensing fees without considering other hidden charges. Many businesses pay more for a “cheaper product” when a product with a “higher sticker price” would have been much less expensive to implement. When you make a CRM purchase, it’s essential to consider different hidden costs at play. Let’s take a look at some of the significant costs of CRM implementation and upkeep facing most businesses.
What are the main costs?
The most obvious cost for many businesses is the overall cost of licensing a cloud-based CRM system each year, such as Salesforce, Hubspot, or Zoho. Licensing fees are the main fixed cost of a CRM implementation. Most platforms offer several add-ons to extend the basic functionality of their solution from different Independent Software Vendors(ISVs).
CRM customization represents another high cost of implementation if a feature you need isn’t available out of the box from your CRM provider. If you need a custom feature, you will need to either pay an addon provider or pay a developer to build it. Working with a CRM consultant like Nomadic Insights can help you understand the full cost of ownership.
The need to work with an external consultant or hire staff to administer your CRM can add to the fixed annual cost of ownership. Generally, for every thirty users, you should assume that you’ll to hire at least one full-time admin with most CRMs.
Please note that this is a general rule of thumb and might vary based on the complexity of your CRM implementation. Another high cost of implementing a CRM is how much customization the system will require in the form of automation, business rules implementation, and data validation. Each of these costs is highly variable and can be priced on a fixed cost or variable basis by implementation partners.
If you want to keep costs low, try to understand the overall amount of customization you’ll need on in comparison to a systems baseline functionality. When it comes to software development, it’s generally a truism that you get what you pay for. It’s my personal recommendation you avoid using a freemium CRM since they typically nickel and dime you for essential functionality. There’s no such thing as a free lunch.
Also, let’s be clear a CRM needs to support customer service, marketing, and sales teams. If you’re just implementing one portion, then you’re not really implementing a CRM fully, which is something to keep in mind. It gets really expensive when you need to integrate more tools. Put another way with most CRMs a full implementation involves customer service, finance, marketing, and sales systems. Please keep that in mind!
The value of a CRM hinges on the quality of data in it as well as its ease of use. One of the most important things to remember when implementing a CRM is the saying “Garbage in, garbage out.” This means that if you don’t invest in ensuring data quality on the front end, your CRM will be useless later on. The cost of implementing data validation measures upfront can be expensive and must be weighed against the long term potential cost of unnecessary data.
For example, in order for most organizations to benefit from artificial intelligence tools such as Salesforce Einstein, they need high-quality data. The reason for this is that Einstein works by analyzing your data in order to find the best opportunities and next actions for reps to take. When predictions are based on unreliable/inaccurate data the AI will advise your reps incorrectly. This means that there is a clear correlation between front end data quality and the implementation of artificial intelligence. Also, the cost of building a clean database from scratch pales in comparison to the cost of cleaning up a bad database.
Cost of Data Storage
Another thing to keep in mind is that certain CRM systems like to charge you a lot for data storage. This is a hidden cost of most CRM systems and something you need to bear in mind when it comes to planning your data management strategy.
This means you will need to actively export old data from your CRM to a warehouse overtime to manage costs. It is difficult to compare data storage costs between CRM providers since many like to charge for contacts and others charge based on the number of contacts in your CRM. In either case, you will need to clean your database regularly to avoid overpaying for your CRM system. You need to decide whether to purchase any additional add-ons for your CRM like Salesforce Inbox. File storage space can be an issue for users who produce a lot of different files and marketing collateral.
Most CRM providers have pros and cons, which you need to understand before making a purchase decision fully. While money is an important factor for most businesses, you need to consider the overall opportunity cost as well.