Calculating the cost of your CRM investment
Investing money into your CRM system may be a good long-term investment and one that you have put a lot of research and effort into before going ahead with the purchase. Because of this, it is essential that you put the time aside to calculate and illustrate the real cost in order to ensure that you have made the right decision.
CRM cost calculations need to be all-encompassing
The positive effects of having the CRM in place may be many, but alongside all of the many improvements to your processes and systems, you will need to check that the overall costs tally with what you anticipated and budgeted for. If they are on target or lower, great. If your work on cost calculation results in the total investment being higher than you planned, you need to find out what went wrong as your CRM ROI will be negatively impacted upon.
Another important thing to remember is that you need to know the total sum of money invested into the CRM system so that you can calculate its ROI. Without this, you are stuck.
Your total price must be comprehensive
It is not just the amount of money that you paid to the vendor that is relevant here but the total overall cost of the system, taking account everything, including:
Original price quoted to you by the vendor before you agreed the deal - this may have gone up or down when compared to the price they eventually invoiced you. This provides you with an addition or credit against the RRP.
- Installation fees – what did you have to pay in order to get the system up and running and live? This includes engineer installation fees, hardware costs, training, consultancy fees, server/cloud storage space, staff time utilized in training, research time, planning etc. Be thorough and don’t miss out anything.
- System maintenance fees – price to update any hardware and labour costs originating from IT or Sales departments.
- System upgrades – calculate how much downtime you will need to lose and the cost of it. Will this impact upon your ability to trade or not?
Depending upon your type of business and the size of it, these costs will vary and no two businesses will have the same total cost for installation and implementation of the same system.
The only way to compile a totally accurate and up-to-date cost of your CRM investment is to include absolutely everything. Don’t just think about your own time but include that of Management and associated departments too. Calculate the figures from day one so that you do not miss out the time spent researching and discussing.
Once you are able to total this figure then you will be ready to move onto the next step, which is accurately calculating your return on investment or ROI.
Featured white papers
CRM pricing guide
Your completely up-to-date guide to CRM pricing in 2019Download
Calculating CRM ROI: five steps to success
Calculate your new CRM's financial benefits with this comprehensive guideDownload
CRM software vendor directory
Save hours of CRM vendor research with this free guideDownload
A guide to creating the perfect CRM strategy for your business
Get your complete guide to CRM strategies and goal setting
How to carry out a CRM cost benefit analysis in three steps
All the info you need to conduct a successful CRM cost benefit analysis
How much ROI should you expect from implementing a CRM?
The average ROI from a CRM project, minimum expected ROI, and more