Understand CRM Pricing & Hidden Costs to Watch Out For
What is the cost of CRM? CRM vendors have different options on how they price their software and services. And while the actual pricing is important, the structure and terms & conditions can be equally critical. It can change the dynamics of the total cost of the application.
Below we will cover:
- Deployment Options – Sass or On-Prem
- Types of CRM Licensing
- CRM Package Options
- CRM Implementation
- CRM Training
- CRM Integration
- Hidden Costs
- C2CRM Pricing Example
CRM Deployment Options - SaaS or On-Prem
Pricing the CRM software licenses generally comes in two options:
- Cloud-based (SaaS) Systems – SaaS software is hosted on the CRM vendor’s servers.
- On-Premise Systems – On-Prem is installed on the customer’s on-site server.
1. CRM Hosted (SaaS) System – Hosted systems are offered monthly subscription-based. It’s typically priced per user/per month. Since you are paying to use the software and do not own it, it tends to be the less expensive option upfront. It’s great for smaller companies that don’t have the capacity to manage the software on their own servers.
CRM Hosted Payments Options – Most CRM vendors will offer flexible pricing plans for hosted CRM. They are broken into monthly, quarterly, or annual pricing.
- Monthly Price Per User – Month-to-month contracts are the least common option. It mitigates customer risk and assigns more accountability to the vendor. The customer is not committed long term.
- Quarterly Price Per User – Quarterly pricing is paid every three months. Payments are discounted monthly (if offered at all).
- Annual Price Per User -This is the most common option so vendors can lock you in for a year. The annual price is more discounted for quarterly or monthly pricing.
2. CRM On-Premise System – On-Premise systems have a perpetual licensing model where the customer owns the software. The total price is a one-time fee. However, annual maintenance fees are required for technical support and upgrades. Average maintenance costs are around 20% of the total software license price.
Click here for more information on the various terms used for software deployment. Those acronyms can get confusing!
Types of CRM Licensing
Generally, there are two classifications of CRM users. These types determine how and when they can log into and access the CRM system.
- Named Users: This type of user has full-time access to the system. Each user has a unique sign-in security associated. Named-user licensing provides higher security and fosters a higher user adoption rate.
- Concurrent Users: This user has part-time access to the system. They share a log-in with other users in the company. Since many people have the same security sign-in, there is no way to pinpoint who uses the system at any time. This breeds unaccountability. There can be no focused customization with concurrent users since they share licenses with many people.
The concurrent user model may be cheaper but does not foster good best practices and proper usage. For this reason, C2CRM and many other CRMs do not offer this model.
CRM Package Options
There are two main ways to purchase functionality in a CRM system.
1.Feature Packages: Many CRM vendors group their feature modules into packages. Forcing customers to buy functionality they do not need. It is a way for vendors to generate more revenue.
They split up functionality and divide features into other packages. This forces you to buy CRM options you would not use. Often, because of this practice, there is confusion about what features are in each package.
2.Ala Carte Module Pricing: C2CRM offers Add-On Module pricing. Using this model, the customer only pays for what they need.
- Core Module – This module is always required since it contains the base code the system runs on. Standard items included security features, user profiles, workflows, calendars, and reporting tools. This relationship management database includes the Account, Contact, and Activity modules. The core module can function as a standalone and provide basic CRM usage.
The following modules can be added to the core module for additional functionality.
- Sales Automation Add-On Module: This module contains opportunities/pipelines, sales processes, quotes, product catalog, and sales forecasting.
- Marketing Automation Add-On Module: This contains drip campaigns, email marketing form letters, and collateral management.
- Customer Service Add-On Module: This module contains ticketing, a knowledge base, and projects.
The C2CRM Pricing model allows users to choose add-on modules for licensing. Also, the system is very scalable…you can easily add users and modules to the system at a reasonable cost.
C2CRM deploys a core module that is required to use the system. It contains everything you would need without up-charging you. For instance, we do not charge for unlimited storage like most vendors.
You should not be penalized for using and inputting more customer data into the system. Having unlimited storage fosters more usage, resulting in a database with more integrity.
The implementation includes customizing your CRM system to fit your business model. This makes the interface more intuitive. Users can immediately start using the system without much of a learning curve.
Implementation services are a one-time, upfront fee. Pricing is based on the number of person-hours needed. These hours are determined after you and the vendor undergo a
needs assessment. Following these processes, they should confirm your implementation cost.
This discovery will come after you have seen a demo of the CRM application and all the features it has to offer.
Here are a few things your vendor will learn during your assessment:
- Total Number of Users
- Number of Users for Modules/Features
- Imports to build your CRM System – are you exporting from a prior CRM tool? Or another application?
- When you introduce them to your users, your primary processes should already be set up in the system. Plus, it helps with user training.
If the vendor has a good overview of your requirements, they should give you a ‘one-time’ price for your implementation. Once you both mutually agree on a final implementation cost, you can proceed with the contract.
Training is an essential part of installing a CRM system. If your users don’t know how to use the software, they won’t use it at all. So it’s imperative that all your users are trained using your custom CRM.
Your business processes should be set up in the CRM before everyone is trained. The training is by role or team.
Pricing can be included with the implementation or listed separately. Here are things you should ask the vendor about CRM Training:
- Is the training live (or do they recommend you watch their YouTube Channel)?
- Is training role-based?
- Do they use your data from your environment?
- Is training unlimited? New hires?
Most companies today want to share data across all their major software applications. Connecting systems create one central location where everyone accesses important customer information. And also prevents duplicate data entry and keeps everyone up to date.
- ERP Software
- Accounting Software
- Marketing Tools (for CRMs w/out marketing automation features)
- Integration Pricing
Years ago, it would take vendors a long time and cost a lot of money to integrate into outside applications. Today, with APIs, these services are more accessible and less expensive. Most CRM vendors promote ‘partnerships’ or ‘plug-ins’ with other software vendors to push you towards their recommendations.
If you can get data out of one system (i.e., ERP), then your CRM vendor will be able to get the data into your CRM solution. This typically costs a few thousand dollars per integration.
The time-consuming part of integrating with outside applications is configuring your requirements. You must know the data you want from the outside software, where to put it into your CRM, and how often it’s updated. But even if you are moving a ton of data between systems, this setup should take your vendor a few weeks at most.
Clear C2 employs a “Progress Billing” mode. This allows the customer to only pay for the completed parts of the implementation. Many vendors force their customers to pay the entire implementation cost before the project begins.
In both hosted and on-premise applications, hidden CRM costs can be associated with training & support.
- While it’s customary to charge for training during the implementation phase, most CRM vendors will require you to pay for ongoing training as you add or replace users during post-implementation. Clear C2 includes this feature in the cost of doing business; it’s included in your monthly subscription fee for hosted applications and part of your annual maintenance fee for on-premise applications.
- Most CRM vendors provide technical support in pricing hosted and on-premise applications. Clear C2 provides technical support that includes any modifications made by our team. This cost can increase quickly with other vendors, especially if you are dealing with a 3rd party vendor/partner. This is where they generate most of their revenue.
- Make sure you know exactly which features have “unlimited” usage. If they are “limited,” you need to know the limit. And, if you go over that limit, how much are you charged, and how are you notified?
Examples of features where CRM vendors typically set limits:
- # of Contacts (C2CRM has no limits)
- Storage Limit (C2CRM has no limits)
- Workflow Automation (C2CRM has no limits)
C2CRM is an affordable, easy-to-use CRM solution. The pricing model below is an example of how a CRM license project is configured and priced.
Total # of Named Users (CORE Package-see details below): 50
# of Users for Sales Add-on: 15
# of Users for Customer Support: 5
# of Users for Marketing: 2
Our pricing allows you to choose how many total users will need access to the system (Core Package). You can add sales, customer support, and marketing modules to those users. C2CRM starts at $37 per user, per month for our CORE Package. For marketing, customer support, and sales modules, we charge $15 per user, per month for each module. You can visit our pricing page here.
C2CRM CORE: 50 users x $37 = $1850
Sales Users: 15 x $15 = $225
Customer Support Users: 5 x $15 = $75
Marketing Users: 2 x $15
Total Software Licenses $2,165/user/month
CORE Package includes:
• Account & Contact Management
• Task & Activity Management
• Lead Management
• Reporting & Analytics (unlimited)
• Custom Dashboards (unlimited)
• Privacy Controls/Security
• Workflow Automation (unlimited)
• Email Integration
• Custom Branding
• Mobile App
• Geo Mapping
Sales Package Includes:
• CORE Package
• Sales Pipeline Management
• Opportunity Creation & Tracking
• Quote Generation
• Automated Sales Cycle
• Contracts & Invoicing
• Products & Services Catalog
Marketing Package Includes:
• CORE Package
• Email Marketing
• Drip Campaign Management
• Email Form Letter Templates w/HTML Editor
• List Management Import Tool
• Lead Scoring
• Mobile Marketing
• Collateral / Document Management
Customer Service Package Includes:
• CORE Package
• Customer Support Ticketing
• Helpdesk / Case Management
• Automatic Escalations
• Severity Assignments
• Project Management
Clear C2 has over 25 years of developing and selling our CRM platform. We know that our customers need affordable and flexible pricing. We don’t want you to pay for features you aren’t going to use.
There are so many things to consider when looking for a CRM solution. Remember to ask a lot of questions and read the fine print. The worst outcome would be signing a contract and learning you need to pay more. And on top of that, it will take months to get the system up and running.
If you have any questions about CRM pricing or want to compare us to another vendor, please call us at 972.304.7100. We are here to help!