You
select new CRM software thinking it will solve all your
efficiency problems. The vendor conversations went great, and downloading the
software was seamless.
You
quickly realize, however, that transferring all of your previous data isn’t as
easy as clicking a few buttons. You call your vendor support only to find out
that full support is unlocked in a premium package you didn’t purchase.
Problems
like these, among others, come up often when you implement a new CRM, and many
businesses don’t factor in these unknown costs when budgeting for their
software.
CRM implementation
involves more than just purchasing the base software. You must consider initial,
ongoing and avoided costs when selecting CRM software to avoid
spending far more money and time on software that’s meant to save you exactly
that.
Key Takeaways:
·
Factoring in the variety of different hidden or sneaky costs
associated with CRM implementation is crucial when budgeting.
·
Initial costs go beyond just paying for the software itself, so
keeping data transfer, consultation, integration, training and customization
costs are necessary.
·
Ongoing training and upkeep costs on your CRM should be a factor
on your yearly budget as well.
·
Factor in money your CRM will save you by figuring out any
processes or software you’ll be retiring once your CRM is up and running.
Why
Cost?
No
single factor should be the sole determinant in CRM software selection. Like we
mentioned in our piece on usability, cost is just one of
many CRM selection criteria Gartner outlines (full content
available to Gartner clients).
Our
advisors, who speak to hundreds of business owners every day, find that cost is
often the most top-of-mind factor during a purchasing decision
It
makes sense, too. You’re spending thousands of dollars on software that should
make your life easier and save you money.
Hopefully,
you’ll have a greater understanding of what types of factors to consider when
budgeting for your CRM software selection after reading this.
Initial
Costs: Beware of Hidden Money Sinks
Aside
from the base price of the CRM software you select, you’ll likely run into a
few extra costs you should consider when fleshing out your budget.
Because
most CRM software uses the software-as-a-service (SaaS) model and you pay per
user per month for most of them, the initial cost of setting up a CRM doesn’t
seem that high.
But
only taking that initial per user per month cost into account is a mistake that
could cost you time, frustration and money down the line. Here are some additional
initial costs to keep in mind during your CRM software selection:
Data
Transfer Costs
Unless
you’re a brand new business, you’ll have data somewhere that needs to be
transferred over into the new CRM.
Whether
it’s in spreadsheets or other manual methods like pen and paper, you’ll have to
pay an employee (potentially overtime), do it yourself or hire a consultant
either through your CRM vendor or separately.
All of
these options take time and money that some business owners don’t consider when
determining their CRM software selection budget.
Integration
Costs
Another
common initial cost that gets overlooked is how much money it takes to
integrate your previously used software into your new CRM.
Most
CRMs offer seamless integration with the more common business tools like phone,
email and calendar, but if you’re in a more specific market, your needs might
vary.
Talk to
your vendor about any common integration problems they’ve encountered with
industry-focused software.
Training
Costs
Training
costs aren’t always included during budgeting either, and even a few days of
devoted training can lead to your initial budget getting blown out of the
water. Factoring in the onboarding time for your team is crucial.
If you
won’t be the primary user of the software, it’s helpful to bring in someone
during the planning process who will be using it so that they can give you a
clearer idea about what training might include.
Having
a usable CRM is a great way to make sure
training goes smoothly.
Customization
Costs
Yet
another sneaky cost is the time it takes to set up and customize your CRM
dashboard so it fits your business needs. Some businesses will be able to use
their chosen software straight out of the box, but most will require either a
small or large amount of customization.
Spend
the upfront time getting as many vendor demos so that your chosen CRM is as
close to ready out of the box as is possible.
Ongoing
Costs: Keeping Things Running Smoothly
Initial
costs are by far the largest portion of costs to consider while budgeting, but
you shouldn’t plan solely with them in mind when selecting CRM software.
Ongoing costs, while not as substantial as initial costs, should be factored in
as well.
Keeping
your CRM running smoothly requires support from your entire team. Making sure
your data is uploaded and maintained correctly is crucial in order to best
utilize the important analytics you gather.
Encountering
“dirty” data is common for first-time CRM users, so having a dedicated person
(whether it’s you or an employee) or an entire team (depending on the size of
your business) devoted to keeping your data clean and usable is important.
Most
CRMs these days don’t require an IT team to keep running, so basic maintenance
isn’t usually a problem—but a complete suite of vendor support isn’t always
included with your CRM.
Sometimes
only limited support is offered unless you have a premium package, so it’s
important to check with your vendor before making your decision, or else you’ll
have higher ongoing costs.
Anytime
you hire a new person or have to provide ongoing training, that’s time and
money you’ll need to factor in as well.
Avoided
Costs: You Can Actually Save Money
At this
point you might be thinking “what am I getting myself into” with all these
hidden costs you haven’t considered. Don’t worry: your CRM will save—and even
make—you money if implemented correctly.
You got
a CRM for a reason, and according to our data, most businesses we talk
to select a CRM for added efficiency and to get away from pen and paper or
spreadsheets.
Others
are transitioning away from a failed CRM implementation that came with too many
features or cost too much, which further emphasizes the importance of making
sure you have all the information you need prior to implementing your new CRM.
Whether
you’re switching from a current CRM or starting from scratch, you’ll likely be
able to use your CRM to retire something else that’s cost you money in the
past.
Potential
cost savings come from a variety of places, but here are a few of the types of
things a CRM helps you retire:
- Spreadsheets
with contact information in them
- And older, more
expensive CRM
- Marketing
software (if your CRM includes a marketing solution)
While
this might be more applicable for midsize or enterprise level businesses, the
efficiency and time you gain by implementing a CRM will save you money even if
you were just coming from pen and paper or spreadsheets.
Looking
Ahead: Make Sure Your CRM Budget Includes All Costs
That
was a lot of information to keep in mind when , so we’ve made a simple
checklist you can print out and keep on hand when planning your budget so that
these factors stay top of mind.
Choosing
a CRM that takes these three criteria into account will ensure you won’t blow
past your initial budget and will be able to make an informed decision when
hunting for a new CRM.
One way
to keep your budget in check is to plan with a range instead of just one
number, that way you add some flexibility when beginning your selection
process.
This
strategy will enable you to narrow down your budget as you find out more
information.
As
always, if you have any questions or concerns, please don’t hesitate to reach
out to our advisors at (855) 998-8505.
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