Cost of CRM

Introduction

Understandably the price of a software purchase is always a topic to cover when we discuss on boarding clients. Many times this is the point of interest driving a potential customer (Prospect) to reach out. There are a number of details associated with understanding the price a new client will be asked to pay. Categorically software has a unique sales proposition with actual product pricing and the typical training budget allocation. Past those details, a future CRM client should understand “Maintenance and Support”, customization (AKA Configurations) and the potential cost of a failed implementation.

Before we get down to the topics detailed above, any organization looking for software to support infrastructure should know software solutions are considered intangible fixed assets whenever the owning entity controls those assets through custody or legal rights (i.e. patent, copyright, licensing) - and because they normally provide benefits to the end user for longer than one year, they are also considered to be capital assets. Thus, expenditures on software/development resulting in the creation of a capital asset, are capital expenditures. This is a great way to justify costs and understand the true value of a CRM. Many Owners or C-Level decision makers overlook this detail when realizing the depth of a software solution.

Takeaway: CRM is a capital asset in execution and expense!

Road Map

I like to start with a list of goals. Generally this is collaboration between leadership and those people organizing day to day workflow in a solution set. In my approach we define Progress, then workout the very specific activities users will execute leading to measures of success. In my world, its CRM objectives review. I accompany the exercise with a Workbook and a loose Project Execution Plan. This is how it looks in short form:      

This fundamental discovery process is based on understanding our potential client’s (Prospects) knowledge base and the depth of the software. Most of the time CRM searches start out very narrow, typically rooted in a few superficial features and function interests (Mobile and Simple to use). Because companies don’t know what they don’t know, I comprehensively drive toward a focus on Revenue creation strategy. Ultimately the standard of a successful investment is the return it brings.

 Takeaway: Know where you’re going!

Purchase

Now that we’re clear on the back story to getting pricing, let’s pick this up where I left off in the opening paragraph. I differentiate price from cost so keep that in mind while you read these details.

Overall development services and training are based on predicted hours. Our project team and training staff give estimates based on scope of defined work. We outline project plans to quantify task hours, then summarize the total hours to offer blocks of time at discounted rates.

Validating and navigating the purchase phase is a combination of understanding software capability, company awareness and the organization of an internal project team. We certainly can determine some type of price early in the purchase cycle but because of the nature of CRM deployments, understanding what we charge for gives a global understanding of the total project impact.

Takeaway: Know what and why you’re buying!

Closing

When asking for a demonstration of CRM, looking to test run what the software could look like for your organization, be aware. The price per license per month is for comparative purposes only so expect to pay and annually for a term. Past the price, know if your organization needs a small contact management system or if account management is truly the front office system of choice. The product you are looking at is considered a Capital Expenditure for a reason. So let me remind you of this:

“Before we down to the topics detailed above any organization looking for software solutions to support infrastructure should know software solutions are considered intangible fixed assets whenever the owning entity controls those assets through custody or legal rights (i.e. patent, copyright, licensing) - and because they normally provide benefits to the end user for longer than one year, they are also considered to be capital assets. Thus, expenditures on software/development resulting in the creation of a capital asset, are capital expenditures. This is a great way to justify costs and understand the true value of a CRM or an ERP. Many Owners or C-Level decision makers overlook this detail when realizing the depth of a software solution.”

Finally, the cost of a CRM purchase has an unknown value associated with it. To minimize cost, consider people and business processes to define a solid go forward strategy. Once these 3 internal tenants are determined, search for a right fit solution. The price of the product and implementation is a fraction of the cost a company can incur due to a haphazard deployment. Defining system activities measured against progress goals influences buy in. A scaling operation has exponential Return On Investment, so define how CRM equates to Revenue on the P&L Statement. 

Takeaway: If activity drives progress then CRM scales Revenue!