“So… what’s this CRM gonna cost us?”

Ah, the dreaded budget question. When it comes to CRM implementation, this question can seem impossible to answer. They almost never cost face value. There’s the initial cost, cost per user, customization, and…

“C’mon, gimme a ballpark.”

Wrigley Field.

But in all seriousness, what does a CRM implementation cost? How do you begin to calculate and set a budget for one?

The true cost of a CRM implementation is rarely understood when the process begins. Because of this, improper funding is one of the main reasons for CRM implementation failure.

CRM implementation costs fall into 1 of 2 categories:

  • Transparent
  • Hidden

Within these categories, you’ll pay for them in 1 of 2 ways:

  • Money
  • Time

This leaves us with 4 types of CRM implementation costs:

  1. Transparent fees
  2. Transparent time investments
  3. Hidden fees
  4. Hidden time investments

This post will go through each variety of CRM implementation cost – and where you can expect to find them.

Transparent costs

CRM vendors are upfront about some costs for implementation. And some of the implementation steps clearly take up some of your time.

Transparen-SEE? …alright that was bad.

These costs are the easiest to spot and include in your budget. These are the ‘main’ costs of a CRM implementation.

Transparent fees fall into 4 categories:

  • Subscription costs
  • Service level costs
  • Cost per user
  • Implementation fees

Transparent time investments correspond to the 5 stages of the CRM implementation process

  • Discovery
  • Selection
  • Data preparation
  • Implementation
  • Training

Transparent fees

In the CRM implementation process, the first transparent fee is your subscription cost, or the price you pay to have access to the system. There are a few types of CRM subscriptions.

You’ll have to decide between cloud CRM or an on-premise CRM.

Cloud CRM vs. on-premise CRM

A cloud CRM is a system that lives online –you pay a subscription fee to get a license for your business. Cloud CRMs give you more flexibility in customization and payment options, are easier to scale up, and offer remote-access for all of your devices.

An on-premise CRM is a system you purchase up front (for a whole lot of money). You own it. It exists on your servers. The maintenance, updates, and uptime are your responsibility.

Cloud CRMs are popular because of their ability to scale, adapt, and be accessed remotely (image source)

Cloud CRMs are rapidly replacing on-premise CRMs. Cloud CRMs take less upfront investment and offer more options for subscription.

You might choose an on-premise CRM if you manage sensitive data, or need complete control over the system (often for reasons related to compliance with regulations).

Cloud-based CRMs usually offer a few options:

  • Monthly subscriptions (these are the most common)
  • Annual subscriptions (usually available, and often comes with a discount)
  • Quarterly subscriptions (rare, but sometimes possible)

Service level costs

Your service level cost is determined by 3 factors:

  • Plan level – the service package you purchase from the vendor
  • Volume – the number of records, contacts, or data points you can store for a certain price
  • Add-ons – the premium features, integrations, or capabilities you can add after the fact

In the software-as-a-service (SaaS) model, CRM vendors offer various ‘levels’ or ‘tiers’ of a CRM platform. Each plan level contains a particular bundle of features and capabilities.

For example, ActiveCampaign has 4 plan levels:

  1. Lite
  2. Plus
  3. Professional
  4. Enterprise

Each plan builds on the previous plan, offering more features. These higher level plans are accompanied by a higher price level as well.

As your business grows, so will your CRM needs. Cloud-based CRMs are able to grow and scale with you and provide the tools you need.

Another cost factor in the tiered service model is volume. As your CRM use grows, so will the number of contact records, organizations, and the total amount of customer information you need to keep track of.

Contact-based CRMs enforce a limit on the number of records you can store for a certain price. Once you approach that limit you might be notified (or you might not). Then it’s decision time:

  • Upgrade your contact/record limit
  • Clean up your list and create some room
  • Find out you’ve been billed for an upgraded plan without being notified, surprise!

SaaS CRMs like ActiveCampaign make it simple to upgrade (or downgrade) your plan-type or limit within the platform, further highlighting the benefit of scalability.

Here’s what upgrading/downgrading your account looks like in ActiveCampaign!

What if there’s just 1 or 2 features that you really need but can’t justify the price jump from your current plan to the next?

Some CRM vendors will offer add-ons to give you just that. Add-ons can be free or come at an additional charge.

Examples of free add-ons are:

  • Native integrations with other tools
  • Basic dashboard customization
  • Basic reporting and analytics

Premium add-ons include:

  • Advanced reporting and analytics
  • Advanced dashboard customization
  • Artificial intelligence or machine learning capabilities
  • 3rd party integrations

Add-ons are a great way to increase your CRM capabilities without breaking the bank. But you should always make sure about the cost of an add-on, as they’re a common way for CRM vendors to sneak additional fees into your bill.

Cost per user

Some CRM plans or service levels may only allow for a set amount of users. Other CRM vendors allow for adding individual users (seats) for a set amount more per month.

The number of users for any given plan will be denoted within the plan’s description.

There are other scenarios where a fee may be needed to access particular features or add-ons for a plan. One example of this type of add-on is ActiveCampaign Conversations.

Implementation fees

Once you’ve decided on a vendor and plan level, it’s time to roll your CRM out. Unless you’re someone with extensive developer skills, you’re going to need some help with implementation.

Vendors offer setup and implementation services, and these range in cost according to the scope of the implementation.

Here are a few of the implementation services you could be offered:

  • Building customized dashboards
  • Automated workflow creation
  • Template creation
  • Consulting services
  • Data migration
  • Contact import
  • Workflow export/import

If you do all of this, it can end up costing you a lot of money.

Implementations are a bit of a gray area. Some vendors don’t tell you how much these services cost.. Always check with the vendor directly –you’ll avoid the surprise of an unknown fee.

“Factor in the new fees, carry the 9, multiply by 7, and…” (via GIPHY)

Implementation fees can pile up in a hurry. Expect to spend $1 on implementation for every $1 you spend on an annual CRM subscription.

Even this rule can be a conservative estimate. Some estimates range from $1,200 to $5,000 in implementation fees.

At ActiveCampaign, we recognize that your organization needs a CRM that can be set up and used quickly, without breaking the bank. That’s why:

Your CRM exists to improve your customer relationships and your visibility into them. This should start with the relationship you have with your CRM vendor.

Transparent time investments

Setting up your CRM takes time – but not everyone realizes that time is an important cost of implementation. Time is money. So if you underestimate how much time you need, you’re going to spend way more than you wanted to.

The larger the team, the longer the CRM implementation (via Software Path)

CRM implementation can take 0 weeks, 15 weeks, or years – but a lot of companies still don’t spend enough time on it!

There’s a cost of time, but the cost of cutting corners will come back to bite you (when you can’t find the crucial information you need to close a deal, or you discover that your sales forecasts were dangerously inaccurate).

What would you actually use a CRM for?

“The deeper your team goes into defining requirements before selecting a CRM system, the more successful your CRM implementation will be.” – Steve Chipman

A thorough CRM discovery has 5 areas:

  1. List of feature requirements
  2. Business requirements
  3. Non-functional requirements
  4. Functional requirements
  5. System design

List of feature requirements – Create a list of ‘need-to-have’ and ‘nice-to-have’ features. What do you need each feature to do for you?

  • Contact management
  • Email marketing and automation
  • Opportunity management
  • Sales analytics & sales reporting
  • Workflow automation
  • Account management

Business requirements – What problems do you have? Which processes feel chaotic and messy? Where do you start losing leads? Who needs to communicate – and what information are you losing?

Take a look at your numbers. Where are your problems? What are your problems? (via GIPHY)

Non-functional requirements – How fast are you growing? How much information are you adding? What would it mean if the system went down? How important is your stored customer information? Things to consider here are:

  • Uptime
  • CRM scalability
  • Backup & disaster recovery
  • Cost (of course)

Functional requirements – What specific things must the system do for your business processes? What specific use cases do you have? What are the steps of each process? Where does account ownership change? What does your prospecting process look like? Your sales process? What about onboarding?

Drill down deeper than just features.

Be sure to think about this question from the perspective of each team who will be using the tool.

Make sure the right people have a seat at the table. (via GIPHY)

Each team or department that will use the CRM should be part of the discovery conversation.

  • Sales
  • Marketing
  • Executive leadership
  • Support
  • Operations
  • Finance

System design – What’s it going to look like? Will different teams need different dashboards? What information will be shown in each dashboard? How will that information be displayed? How will users interface with it?

Do yourself a favor and invest the time. The process gets easier when the goal is clear.

When you choose a CRM…

When you have a list of what you need your system to do, give that list to the CRM vendors.

If a CRM doesn’t meet 60% of your requirements, look elsewhere.

If you can’t find anything that meets 60% of your requirements, you have a few