by Gitanjali Maria
Published on 6 April 2017
Attracting and retaining customers is a top priority for most small businesses. Not easy though, is it? In order to give you a fighting chance of pulling in and engaging clients you cannot afford to be without customer relationship management software (CRM). Many small businesses think a CRM is an expensive luxury - but it doesn't have to be.
This article will help you with tips and tricks on how to save money on the cost of CRM software for your small business.
According to Gartner, customer relationship management (CRM) is "a business strategy that optimizes revenue and profitability while promoting customer satisfaction and loyalty. CRM technologies enable strategy, and identify and manage customer relationships, in person or virtually. CRM software provides functionalities to better manage the four business segments: sales, marketing, customer service, and digital commerce."
Customer management has many dimensions. It involves multiple functions such as lead management, marketing automation, and after-sales customer support. CRM also covers customer analytics, customer data management, and reporting.
At one glance, you may feel that you require all these features. But remember that choosing a CRM software that meets your requirements without any frills will be light on your pocket as well.
According to Gartner (content available to Gartner clients) reveals that CRM is the fastest-growing business software application market. Another Gartner report estimates that the CRM market was $26.3 billion in 2015. With hundreds of vendors and software stuffed into the market you may find yourself lost trying to choose from among the different CRM products, modules, and pricing models. You may also end up shelling out more money than required.
To help you in your buying process, we've classified the pricing of CRM products into three broad categories - Starter price range, Mid-range price, and Enterprise price. We have also matched each price range with the approximate number of users that it can support.
This classification has been done basing pricing data from the top 15 CRM software according to GetApp's CRM Category Leaders ranking for Q1 2017. See the Appendix section at the end of the article to learn more about the methodology used.
Note: Prices are on a per user per month basis. Pricing plan terminologies used by different software vendors vary and may not exactly match with the terminologies used here. The three pricing categories here only provide a general estimate of the pricing ranges and target user base supported by different vendors. See the Appendix to learn more about the methodology we have used to arrive at the three price categories.
The above meter only provides a rough estimate of the price ranges and users. Your total expenses may vary depending on your actual purchase.
What are the most important features offered by a CRM software? Do you require all these features or just a few of them?
In this section, we have identified the price categories in which these features are most likely available.
Note: The above results are not for any specific software but derived from analyzing the features offered by the 15 software considered. For example, the green 'Advanced' cell represents the presence of a feature in a particular price range for 50% or more of products.
Choosing a product version with all the features that you want will help you avoid spending extra money. You could be happy with a free or a starter version if your requirements are few. An enterprise version need not be the best choice for you. You may get overwhelmed by the bells and whistles in the enterprise range software. Clearly outlining your feature requirements is one of the first steps that help you choose the right software.
How important is customer support to you? Do you think you would often need to reach out to support personnel for technical help? The price of a software varies depending upon the support structure that you choose.
Most CRM vendors offer basic support such as live chat, email support, knowledge base, and video demos to all customers. But for services such as a dedicated account manager, priority support, or faster response times, you'll need to buy a premium version of the software.
The table below provides an idea about the price ranges and support services offered by the top 15 CRM software vendors.
You should choose a version of the software that best meets your requirements and is within your budget.
Here are some other tips to help you reduce the cost of CRM software:
Pipedrive offers savings of $12 per user per month for their Platinum model if you opt for annual billing!
Starter price range
The starting price of most of the products is $0 and this forms the lowest value of the range. The higher end of the Starter price range is calculated by taking the average of the lowest prices of the top 15 products. This ensures that the starting price of most of the products fall within this range. Similarly, the number of users supported by a software in this price range is the mean of the number of users supported by the starter versions of the top 15 vendors.
Example: If the lowest pricing plan (other than free versions) offered by vendors A, B, and C are $10, $5, and $15 respectively, then the higher end of the starter price range would be $10 (average of all the prices).
The lower end of the Mid-Range Price segment is the higher end of Starter Price Range. To get the higher end of the Mid-Range Price segment, we took an average of the mid prices of the top 15 products. In cases where there were multiple pricing plans between the starter and enterprise versions, we have taken the average of those plans to identify the product's mid price value.
The number of users supported by a software in this price range is the mean of the number of users supported by the mid-price versions of the top 15 vendors.
Example: Suppose product A has four pricing plans: Basic, Professional, Business, and Enterprise at $10, $20, $40, and $60 respectively. Then the mid-price value for product A is the average of its Professional ($20) and Business ($40) plans, i.e., $30. If the mid-price of the other two vendors B and C are $20 and $40, then the higher end of the mid-range price segment is the mean of $30, $20 and $40 (= $30).
The enterprise pricing segment starts from the higher ends of the mid-range pricing segment. All prices above this value lie in the enterprise pricing range.