When selecting a new CRM or evaluating the efficiency of your current product, it’s important to take into account the total cost of ownership. Total cost of ownership encompasses all the costs of a CRM program, both direct and indirect. With a variety of CRMs in a wide range of prices, from virtually free to thousands of dollars per user annually, total cost of ownership can be a difficult number to assess.
What Factors Affect Total Cost of Ownership?
1. The Way You Pay
By the month? Annually? Is there a license, pricing tiers or a flat rate? Some CRM companies offer incentives to pay up front, others have a subscription-only service.
2. Number of Users
CRM companies might charge a flat rate for each user, have pricing tiers (for example, charging you more at 5 users, 10 users, etc) or simply have a cap on the number of users you can add to a single account.
3. Number of Contacts
Some CRMs will have a free version of their CRM for accounts with fewer than a couple hundred contacts. Others have a pricing tiers based on the number of contacts you have as the numbers increase into the thousands.
4. Data Storage
Often, each user on the account will get a certain amount of data storage for uploading files into the CRM. However, if your account goes over the allotted amount, or you know you are going to need more data, CRM companies will charge you extra for more space.
5. Features
The more features in a CRM, often the higher the cost. CRM companies may charge you extra for built-in tools for invoicing, accounting, project management, sales reporting, analytics and more. You also might have to pay for your own integrations (for example, if the company doesn’t have their own built-in accounting tool, they might integrate with some accounting software—but you’ll have to pay the other software company, too). This can work out really well for users who don’t need too much “bling” on their CRM; you don’t want to pay for features that you don’t need and won’t use.
6. Customization
Some CRM companies will charge you for the ability to customize parts of your software, like which features you have access to, custom data fields or even the way that data links through the system. You might also ask the CRM company to develop a feature or integration for just your account, in which case, of course you would have to pay for the additional work.
7. Customer Service
Your CRM won’t always come with customer service, and the more robust the software, often the more help you’ll need. Customer service is sometimes only offered on higher pricing tiers or during a special trial period. Some CRM companies might treat customer service more like account management, and you will be assigned an agent with a given number of customer service hours available to you per month. Other CRM companies offer the same quality of customer service at every price.
8. Installation
It may be cheaper to buy a CRM and install it on your own servers, but you have to keep in mind the price of paying someone to administer those servers. Will you train your own employees on how to use the software? Will you have to hire someone else or pay the company for training sessions?
This list isn’t exhaustive, but it’s a good place to start. Looking for more advice on CRM pricing? Check out these articles from our blog!
- 3 CRM pricing tricks that you shouldn't fall for
- Why small businesses should not use enterprise software
- Free CRMs: Why they might not be a good idea
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