How much does CRM cost?

I've helped hundreds of businesses select and successfully implement CRM over the last twenty years, so you can imagine that I get this question a lot from prospects.

"How much does CRM cost?"

And as a small business owner myself, I tend to throw nickles around like manhole covers personally so it's a 100% understandable concern.

So let's break this down.

Why are you looking for a CRM solution in the first place?

This question might seem like a typical sales response but it's absolutely essential to understand motivations when you consider the cost of CRM.

If you want a simple rolodex in the cloud to track contact names, you should expect to pay a lot less than if you want a full CRM that acts as a transformative tool to help you control, manage, and automate sales, services, and operational flow.

My approach to CRM is practical-minded so I don't focus on fuzzy things like "improved customer satisfaction", "better relationships", "happier customers", etc.

Yes ... CRM *can* and does provide those things but they are usually side effects of the two core benefits of a well-implemented CRM:

1. Get all your information in one place so whoever needs it can get to it, when they need it, to do their jobs easier and faster.
2. Automate and streamline your processes and information flow throughout your company so nothing falls through the cracks and things get done smoothly and consistently.

Many people get stuck on the first benefit. It's understandable as, up until about five years ago, that was the primary benefit for CRM usage.

But these days, with tools like Microsoft Dynamics 365 Sales (CRM), you and your team should really be focused on the second benefit.

That's where the value of CRM comes into play and provide truly transformative results for your team - and most importantly - your customer and prospects.

It may sound like "sales mumbo-jumbo" but I guarantee that if you take advantage of automation and streamlining and improve productivity by even a few percentage points per person, CRM pays for itself ... quickly.

Why not stay put and do nothing?

There's also a fundamental question that people should ask when considering CRM:

What's the cost of doing nothing?

Most prospects come to me because they have recognized a need for change - to stay competitive, increase sales, improve customer retention, etc.

What's going to change if you don't invest? How will things get better for you and your team? How will you remain competitive and profitable?

Ok, fine, I get it ... but what will CRM cost me?

Assuming you are looking for a full CRM and not just "a rolodex in the cloud", you will have two primary costs for your CRM.

1. Software costs. Usually this is a subscription license where you pay a monthly recurring fee. This usually is tied to each user and often based on what roles they play: sales, services, marketing, or even a combination.
2. Service fees. This is for the implementation, training, setup, configuration, guidance, best practices, etc to help ensure that CRM is successfully adopted short-term and to make sure it sticks long-term.

Breaking down the Software Costs

The good news is that if you are evaluating CRM purely on costs, you'll be able to find some really cheap "CRM" solutions out there that come in around, or even under, $30 per user per month.

[SHAMELESS PLUG: We have our own version of a low-cost, dependable, and powerful CRM built upon the Microsoft Power Platform. Please comment or ping me if you want details.]

Heck, some vendors even advertise FREE CRM as an add-on to their core system. Usually this is when a CRM is included at no extra charge with a paid marketing or accounting solution.

It probably won't surprise you to hear that you get what you pay for.

If your needs are simple and basic, find a simple and basic contact management tool for that lower price point.

If you want a true, robust, fully featured CRM solution that will easily meet today's needs, and will evolve and grow with you to respond to an ever-changing business landscape, you should expect licenses to cost between $60 to $150 per user per month.

Possibly more if you add in special functionality and add-ons to meet a specific need.

If you can successfully spin up your CRM to reach the two primary goals that I mentioned above, this will be the best investment you ever made for your business.

The key is making sure you are successful so you reap the results. This leads to ...

Breaking down the Services Costs

Depending on which research you read, 40 to 70% of CRM projects FAIL! That means that after considerable time and expense, the CRM solution ends up falling into dis-use or very limited use.

The right consulting firm will help you avoid this and ensure you get a return on investment.

When it comes to CRM implementation, there are two schools of thought:

1. The "Big Bang". This is where a consulting firm comes in and pokes and prods you for every last wish and pain point to give you a proposal for a wonderful perfect system. They'll ask for a huge investment and promise it will be ready in six to nine months (spoiler: it won't be).
2. Crawl, Walk, Run. This is where you start with a minimal viable product - the smallest set of functionality that is still going to have value to you and your team - and get using it. From there, you collect feedback in the form of wishes, complaints, struggles, dreams, etc. and iterate as budget, needs, and time allows.

If you have read my other articles, you probably know we favor the second approach.

Move fast, get a quick return on investment, and get the team fired up!

Our desire is to work in small, bite-sized projects that have a clear and fast path to return on investment. You can start using, and benefiting from, your CRM investment in a matter of weeks.

This approach also allows you to start getting real-world feedback from your team early on in your CRM usage. This helps counter the common problem of "we don't know what we don't know". How can you make informed decisions about how your CRM is designed when you haven't ever used a CRM?

By getting the system in production and getting real-world feedback, you focus your implementation on things that are of real value to your team, making their lives easier - not on some theoretical functionality that a consultant tells you to implement.

This promotes usage and ensures you get adoption and return on investment both in the short and long term.

Membership has its advantages

Our approach to ensuring successful Microsoft Dynamics CRM outcomes is to provide a fixed fee, ongoing "membership service" (we call it our OnTrack CRM Success Service).

My team of experts act as a virtual co-worker / teammate to you and your team, collaborating through a private Microsoft Teams channel to provide real time access with each other.

Customers pay a fixed monthly fee for unlimited access to support, guidance, training, coaching, direction setting, strategic discussions, etc. Plus you get free access to our growing suite of add-ons - extensions to the base CRM functionality - to help you get more out of your CRM.

Depending on the desired level of service, there are different plans for different levels of need and budgets. It will vary A LOT based on how fast you want to move and how much tender, loving care you want.

Estimated Service Fees

Assuming you are implementing a full CRM (not basic contact management - fees will be far less for those implementations), here are some ranges to give you a sense of services investment for your first year.

Note: these ranges include unlimited support and coaching for the entire year.

Also note: these are wide ranges - it's going to vary based on what you want in your minimal viable product to get started, how fast you want to move, and how much guidance and assistance you want. THE TYPICAL CUSTOMER LANDS IN THE MIDDLE OF THESE RANGES.

• 5 User System: $11000 - $17500
• 10 User System: $12000 - $20000
• 20 User System: $14000 - $25000
• 50 User System: $21000 - $40000

The above numbers are for the implementation of a common set of functionality that most prospects are looking for around getting organized and creating a solid foundation for the future.

Some customers spend more as they see ways to automate or tweak the system to increase value and efficiency across their team. Remember the point of the crawl, walk, run system is to move forward as your budget, needs, and timing allow - and only do so if there is clear value.

Next Steps

Remember that it all goes back to your needs.

What are you looking to get out of your CRM investment?

Break that down into specific numbers and top (or bottom) line impact.

• What does it mean if you improve sales velocity by 6%?
• Or increase your close rate by 14%?
• Or increase customer retention by 8%?
• Or <insert one of the countless gains that CRM can help you achieve>?

The right CRM system, implemented the right way, will help you reach those goals and quickly show that CRM is truly an investment that reaps real results, not a "cost".

And ... if you still aren't sure that CRM is going to be a worthwhile investment, ping me and ask about our low-cost Pilot Program that allows you to test the waters and validate the software before you make the larger investment.

I hope this helps you in your journey of evaluating CRM. Please reach out if you would like to have a one-on-one conversation to talk about your specific needs.