Understand CRM Pricing
& Hidden Costs
To Watch 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.
Let’s dig into the weeds to see what’s truly behind CRM pricing and what to look for and what to watch out for (hidden costs).
CRM Deployment Options
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.
CRM Hosted (SaaS) System
Hosted systems are offered in a monthly subscription-based model. 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 users and for customers with IT organizations 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 options for hosted CRMs. They are broken into monthly, quarterly or annual pricing.
Monthly Price Per User: month to month pricing is the least common option since it mitigates customer risk and assigns more accountability to the vendor since the customer is not committed long-term.
Quarterly Price Per User: Quarterly pricing is paid every three months and will be billed at a slight discount over monthly (if it’s offered at all).
Annual Price Per User: This is the most common option so vendors can lock you in for an entire year. If quarterly and/or monthly pricing is offered, the annual price is typically at a more discounted rate since you are paying the fee up-front.
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. The maintenance cost is typically around 20% of the total software license price.
Click here if you need more information on the various terms used to 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. They each have a unique sign-in security associated with their user profile. Named-user licensing provides higher security and fosters a higher user adoption rate.
- Concurrent Users: This user has part-time access to the system and shares 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 is specifically using the system at any time. This breeds unaccountability. With concurrent users, there can be no focused customization since there are many people using the same license.
Bottom line is, while the concurrent user model may be more economical, it 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.
- Feature Packages: Many CRM vendors group their feature modules into packages and force the customer 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 purchase a package you would not normally use. Often, because of this practice, there can be confusion on what features are truly in each package.
- 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. Plus it contains all the common items such as security, user profiles, workflows, calendars, reporting tools, etc. Finally, it contains the relationship management functionality which 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, quotes, product catalog, and sales forecasting.
- Marketing Automation Add-On Module: This module contains drip campaigns, email marketing form letters and collateral management.
- Customer Service Add-On Module: This module contains ticketing, knowledge base and projects.
The C2CRM Pricing model allows each user to pick and 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.
Since C2CRM deploys a core module “that is required to use a system fully” and not partially like other CRM systems, 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 data into the system. Having unlimited data storage fosters more usage which results in a database with more integrity.
Implementation consists of configuring and customizing your CRM system so that it fits your business model. This makes the interface more intuitive and users will be able to immediately start using the system without much of a learning curve.
Implementation services are a one-time, upfront fee and are priced based on the number of man-hours needed. These hours are determined after you and the vendor go through a needs assessment before they can lock-in 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 find out during your assessment:
- Total Number of Users
- Number of Users for Modules/Features
- Imports to build your CRM System – are you exporting out of a prior CRM? Or another application? Each user has their own spreadsheet
- Workflows or Processes to set up prior to installation-workflows should be easy enough for someone at your site to set up and manage. However, it’s important that you have your important processes already set up in the system when you introduce it to all of your users (plus it helps when your users are trained).
If the vendor has a good overview of what they need to set up your system, they should be able to give you a ‘one-time’ price for your implementation. Once you both have mutually agreed on a ‘one-time’ implementation cost, you can move forward 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 very important that all of your users are trained. The ideal situation is to have your business processes already set up in the system before everyone is trained. And 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 integrate or share data across all their major software applications. Connecting systems creates one central location (CRM) where important information can access by all team members. And also prevents double or trip data entry and keeps everyone and all records 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 to outside applications. Today, with APIs it is a lot easier and a lot less expensive for these services. Most CRM vendors promote ‘partnerships’ or ‘plug-ins’ with other software vendors to push you towards their recommendations ($ for both). The truth is, if you can get data out of one system, (ie 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 portion of integrating with outside applications is working with the vendor to find out ‘what data’ you want out of the software, ‘where’ you want to put it in the CRM and ‘how often do you want it updated’. But even if you are moving a ton of data between systems, this setup should take your vendor a few weeks at most.
In order to share & mitigate the risk of our customers, Clear C2 employs a “Progress Billing” model which allows the customer to only pay for the parts of the project that have been completed as opposed to many vendors forcing their customers to pay the entire implementation cost before the project commences.
Hidden Costs in CRM
In both hosted and on-premise applications, there can be hidden costs associated with training & support.
- While it’s customary to charge for training during the implementation phase, most CRM vendors will also 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.
- It’s also customary to include technical support in the pricing for both hosted and on-premise applications. Again, Clear C2 goes the extra yard…not only does it provide technical support but also includes “any modifications (by their professional services team) to the software that has been customized and implemented” free of charge. This cost can add up quickly with other vendors…especially if you are dealing with a 3rd party vendor/partner (this is where they generate their most of their revenue).
- Make sure you know exactly which features have “unlimited” usage and if they are “limited”, you need to know what the limit is, how much you are charged if you go over that limit and how you are notified once you have hit that limit-or better yet-how/when you are notified when you are about to hit the limit.
- 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)
- Examples of features where CRM vendors typically set limits:
C2CRM Pricing Example
An example of how simple and easy to understand C2CRM’s pricing model is, below is an example of how a CRM project would be 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 number of users will need access to the system (Core Package) and then of those users, you can add on who will need the sales modules, customer support modules and marketing modules. We charge $37 per user, per month for our CORE Package (see details below) and for our 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 Access
- Geo Mapping
Sales Package Includes:
- CORE Package
- Sales Pipeline Management
- Opportunity Creation & Tracking
- Quote Generation
- 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
After 20 years of developing and selling our CRM solution, 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. Just remember to ask a lot of questions and read the fine print. The worst outcome would be signing a contract and then find out you need to pay additional money (to the vendor or their partner) to get the system setup to the way you do business. 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 just want to compare us to another vendor, please give us a call at 972.304.7100. We are here to help!