A lot of organizations approach customer relationship management (CRM) initiatives with a certain budget in mind. But in most cases, they really don’t know what a CRM should cost. They pull a number out of thin air because that’s what they want to spend. They haven’t determined what they actually need to spend.
As a result, many CRM implementation plans are underdeveloped and underfunded. When that happens, the CRM doesn’t do what you want it to do, goals aren’t met, time and money is wasted, and budgets are often slashed to compensate for lost time and money.
Instead of approaching CRM with a mindset that says “we’d like to use a CRM but this is all we can spend,” take the time to understand what you need a CRM to do, what a CRM can do, and the true costs, both capital and operational, to make it happen. At that point, you’ll have a better idea of the before you start trying to figure out how to make it work financially.
It’s Not Just Cost Per User
When evaluating the cost of a CRM, it’s not uncommon to look at the cost per user. That should certainly be taken into account. But cost per user doesn’t tell the whole story. Not even close.
Even the cost per user charges can be misleading. What services do those costs include? Is there a minimum subscription term? Is there a minimum number of users? Is there a maximum number of users? What are the licensing costs? Are there fees for the initial implementation, maintenance, support, or adding and removing users?
Let’s Take a Step Back
The first step is to determine what your CRM tool must do based on business operations and goals, and how success will be measured. A CRM is useless if it doesn’t do what you need it to do.
That said, I’d be willing to bet a cup of coffee that there are ways a CRM can help you optimize operations and build relationships for which you never imagined. This is why the right CRM consultant is so valuable.
A CRM consultant can help you determine must-have and nice-to-have CRM features. A CRM consultant will make sure the right data is being collected. A CRM consultant will identify data silos and develop a strategy for bringing all of that data into a single system. A CRM consultant will explain the process for integrating a CRM with your existing systems and automating as many manual tasks and processes as possible.
Of course, a CRM consultant’s expertise, research and time aren’t free. There are consulting fees involved to get your ducks in a row before implementation.
The Implementation and Beyond
As I’ve said in a previous post, . Data needs to be integrated and the CRM needs be configured. You need to establish benchmarks and set up reports. The CRM must also be tested before widespread deployment.
Perhaps most importantly, employees need to be trained to use the CRM, and they need to understand its value. If people don’t use the CRM, it won’t work. There are costs involved for configurations, testing and training by an experienced CRM consultant.
There are also ongoing costs for licensing and support. Without proper licensing, you won’t receive essential security patches from the CRM vendor. Without reliable support, your employees will be on their own if they run into an issue with the CRM.
Understanding the Total Cost of Operation
A CRM isn’t just about software costs and monthly fees that show up in a sales proposal. It’s about the total cost of operation, which accounts for all costs before, during and after implementation. These costs depend on your organization’s specific goals, the current state of your data and processes, the size of your company, and other factors.