We’ll come back to that in a moment, but let’s rewind a second and put this conversation into some context.
What is CRM?
CRM stands for Customer Relationship Management. Businesses recognise CRM as software that helps them nurture prospects and customers through the sales and ongoing service process.
While there may be hundreds of CRM systems on the market, there are only 5 types of CRM for small businesses, and it is worth understanding the difference between each before going any further.
The CRM system is a haven for all customer-related data. That data could be new lead information, recordings of emails and conversations with opportunities or ongoing customer service records. It then gets to work creating reports, dashboards, invoices, quotations, reminders and a whole host of other tasks.
The key features of a CRM system today are as broad as they are deep. Today, small businesses can afford functionality that they could have only dreamed about in the past. But they also find out that some desirable functionality can look a bit too pricey. Understanding CRM price ranges and the associated value is an integral part of your learning journey.
When choosing your CRM, it is important to spend some time working out what CRM can do for your business. Understand what it is and isn’t designed to do. Make sure that it will enhance your business operations rather than dictate how those operations should run.
Choosing a CRM System
When selecting your CRM system, you only need to answer two questions:
1. Does it fulfil your essential requirements?
Studying CRM features feels a little bit like the kid in the sweetshop. So much to choose from, so little time. You will discover features that may work well for your company.
These are nice-to-haves, BUT your primary goal is to ensure you have checked out the must-haves. Without these essential requirements, the CRM software is of limited value.
2. How much does it cost?
As consumers purchasing products from home, we take a first look through a range and eliminate the too expensive options. Interestingly, we do this before establishing whether the remaining products will do what we want them to.
It’s curious, isn’t it, that we may drop the one product that will do everything we need it to based on our arbitrary idea of what a budget should look like. But this is the way we are hard-wired.
It is the same when selecting CRM for our business. You will have a budget in mind when starting on your CRM journey of discovery. Out goes Salesforce, Dynamics, Sugar and one or two others because they are too expensive.
You will then start the detailed analysis to discover if the remaining shortlist will come up trumps for you. If you are lucky, you will have identified some CRM software that fulfils your essential requirements and fits within your idea of a reasonable CRM price – within budget.
But, typically, you now have a problem.
The CRM Price Trap
You may have discovered that none of the CRM software on your shortlist does everything you need it to do.
So you go back to the big players, Salesforce, Dynamics, Sugar, and find out that they will all give you your must-haves. But they range from just-outside-budget to scarily expensive.
Luckily, you come across one of their pricing pages to find an entry-level version of the primary CRM product, which you can afford. Geronimo. You can join the big players. You sign-up and settle down.
Unknown to you – you have fallen into the CRM price trap!!
Here’s the problem. On closer inspection, you discover that that cheap entry-level option doesn’t do everything you needed it to do. While it’s great to drive a BMW, if you need GPS, power steering and cruise control but buy the entry-level model without those features, then your car is of limited value.
What is a cynic? ‘A man who knows the price of everything and the value of nothing’.
So what should you have done? Should you have compromised on must-have functionality? Well, you did. But you now have a product that only achieves some of your must-have requirements. The problem is that they are must-haves – you must have them.
What you could have done is reconsider the CRM software that was just-outside-budget and reject the chance of a cheap entry.
Here’s why. You will find pretty soon that the limited functionality you have signed up for needs upgrading sooner than you expected. With all the work that went into the original setup, it is difficult (if not impossible) to migrate into another CRM system. So, guess what, you find yourself signing up for that scarily expensive version you initially tried to avoid.
Here’s the thing. The big players probably all offer the functionality you need. But, their pricing varies considerably from each other. It may have made sense to pick the just-outside-budget option from the start. By selecting the cheap entry option, you have landed yourself with an expensive headache.
Conclusion – CRM Price v CRM Value
Small businesses get into this CRM price fix because they decide up-front what is a reasonable budget. But that is before they understand what CRM can do for their business. How can you price the value of something if you don’t know how valuable it is?
The good news is that if you want to avoid the CRM price trap, follow these five simple steps:
- Understand the full capabilities of a modern CRM system.
- Make sure your business operations and processes are in great shape.
- Use 1 and 2 to decide the must-have and nice-to-have capabilities you need from your CRM system now and into the foreseeable future.
- Draw up your CRM software shortlist based on 3., not on the lure of a low CRM price.
- NOW, decide what your budget should look like. You have a renewed understanding of how valuable the CRM system could be for your business. So, you will have a revised idea of what sort of CRM price you should be prepared to finance.
You will then be much better placed to choose the CRM system that will transform your business. It may not be the cheapest, but it will be the right one.