Three hidden costs you may miss during CRM evaluation
Regardless of whether you’re part of a large or small company, price is a key consideration when it comes to making a technology purchase. Case in point: 58% of B2B buyers want to talk about pricing during the first sales call.
But while companies are usually price-conscious during the CRM evaluation process, they rarely give as much thought to cost. And while most vendors are transparent with their license pricing, they are not nearly as forthcoming about the full cost of their product or service.
Right now you’re probably thinking, “Aren’t price and cost the same thing?” But despite being used synonymously, there is actually a major difference between the price of a CRM and the cost of a CRM.
CRM evaluation: price vs cost
The price of a solution is directly related to its monthly or annual contract fee, which is typically calculated on a per-user basis. The cost refers to all of the other charges required to effectively implement, use and maintain this solution.
Conducting a thorough CRM evaluation requires you to beware of dozens of potential hidden costs. While these may not be obvious at first, they grow over time, significantly impacting your total cost of ownership (TCO) and costing your business up to thousands of additional dollars per month.
Let’s dig into three hidden costs that companies often miss during their CRM evaluation to help you avoid any unpleasant and expensive surprises.
1. Platform integrations
Traditionally, if your solution didn’t offer a certain capability, you were at risk of missing out on customers with this specific need. Today, with the widespread use of APIs, solutions can simply fill these gaps by integrating with other companies that specialize in these areas.
This is an extremely popular strategy in the CRM world. Rather than add functionalities like email tracking and call dialing to their platforms and upfront costs, many CRM providers call for integrations with point solutions, requiring customers to also take on the licensing fees for these platforms. Here is a list of just some of the most common types of integrations required by many popular CRMs:
- Power dialer
- Push notifications
- Email tracking
- Live chat
If these solutions are priced at an average of $50/user/month, this means another $5,000 in licensing costs each month for a sales team of 20! What’s more, CRM vendors often limit full API access to top tier plans, and customers are charged per API call after a certain threshold. Costs skyrocket over time as teams grow and look to connect their sales tools with other business systems such as marketing automation and support platforms.
2. Mobile functionality
In today’s mobile-first world, most of us take for granted that whatever we can do on desktop can also be done just as easily and effectively on a tablet or smartphone. That’s why many salespeople are caught off guard the first time they attempt to use their new CRM from their mobile device and are met with an Excel-like list of information.
Many pre-mobile CRMs launched mobile applications that are included with their standard licensing costs, but are essentially read-only versions of their desktop UIs. Want full mobile functionality? That will cost you. So will offline access and the ability to sync any new data or activities to the CRM once you reconnect. Not to mention the ultimate cost of lost data and productivity due to reps’ inability to access and enter information on the go via mobile CRM.
3. Customer support
For many CRMs, implementation is not included in the licensing fee, leaving customers with two potentially expensive options: hire a third-party or find an internal resource. Third-party consultants are typically paid by the hour, so drawing out the implementation process works to their benefit, while an internal developer comes not just with a salary, but also with overhead costs like equipment and insurance.
In a similar vein, how difficult is the solution to use, and how much training will be required? Not only do training services have to be paid for, whether they’re internal or external, but decreases in productivity during the learning curve must also be taken into account.
Finally, many CRM licenses cover minimal support only, with additional fees of up to 25% of license price for “premium” or 24/7 live support. This cost must be weighed against the any potential revenue losses during inevitable technical issues and downtimes.
How to avoid hidden costs
Now that you’re aware of these potential hidden CRM costs, the next step is to ask the right questions during your CRM evaluation. For assistance covering all your bases, download this CRM buyer’s kit full of resources designed help you gain a deeper understanding of the CRM market, ask the right questions and pinpoint your specific needs.
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