Updated on June 10, 2021
Your service provider is ready to close his sale and gives you a ballpark. As you move ahead with the CRM implementation, your bill starts piling.
Then you wonder, from where on earth you signed up for these hidden costs.
Aw, man, this is such a costly risk. You never want to get here because this is one of the main reasons why up to 69% of CRM implementations fail.
And you won’t get to such issues now that you have landed on our comprehensive guide. When you leave this page, you’ll know how to budget the cost of your Customer Relationship Management (CRM) implementation project.
Table of Contents
While investing in a retail Customer Relationship Management (CRM) solution, ensure to have the following features.
1. Customer data records management system
2. Leads management system
3. Campaign management module
4. Automation of mundane tasks
5. Analytics and business intelligence
So, understand that your implementation cost can vary with the addition or elimination of some modules.
Customer information management is vital to all retail companies. And with a CRM, you can handle everything right from customer interaction mapping to formulating your customer strategy cube.
And your CRM system is typically a database of leads, opportunities, and customers. With the data records module, you can monitor crucial business processes - such as the interaction between your brand and contacts.
Note that these interactions could be anything - customer service calls, sales transactions, running customer loyalty marketing campaigns, addressing customer complaints. This way, you get the power to keep all your correspondences under one umbrella rather than dispersed spreadsheets.
In your CRM, you can validate all the information about your leads. Again, you need not depend on disparate systems to execute this exercise.
You can even map your lead’s intent and source along with his contact and demography details. It thus becomes easy to send them messages or engage them with attractive offers.
In the long-term, lead nurturing with your CRM can help build trust and eventually increase customer loyalty.
Can you imagine having a CRM that won’t help you create and launch your campaigns?
So the campaign manager is a principal feature of your CRM that must assist you in designing targeted email marketing campaigns, referral, and customer loyalty programs.
These customized and automated messages could then cater to enhancing customer satisfaction and loyalty by accurately meeting customer requirements.
Most of ‘em rarely think of a CRM from the automation perspective. But trust me, AI-based quality CRM software such as Ingage can offer you state-of-the-art marketing and sales automation capabilities so that your entire CRM can run on autopilot.
When your CRMs take all the mundane tasks out of your hands, you get to have fun with the creative and important stuff.
Believe it or not, your Customer Relationship Management (CRM) solution is an impressive analytical tool.
You can use these analytical capabilities to garner significant insights into the customer understanding knowledge you might have missed.
This could include your sales performance, accomplished targets, and other business-critical metrics such as churn and RFV. Based on the intelligence you gain, you can improve your product and service quality to thereby increase customer satisfaction and loyalty.
While these are the core features of any standard CRM, the addition of other modules or the elimination of one or more of these can impact the cost of retail CRM implementation.
Recommended Reading: 5 Savvy Ways to Execute CRM Implementation Roadmap in 2021
To protect you from falling into the trap of hidden costs while implementing a retail CRM, let's delve into the costing breakdown to understand the true cost and pricing of CRM implementation.
- Planning costs
- Platform costs
- Service costs
- User costs
- Implementation costs
- Training costs
- Support costs
Before you put the ax to work, you need to start your implementation project with a plan.
This step usually involves conversations with stakeholders, marketing managers, sales managers, and employees to lay out the tasks that your CRM system should handle and understand how it falls in alignment with your business’s vision.
As a case in point, if you own an online store, then you might need a one-layer catalog for your contacts and a database system to house all related information. Also, you would be needing tools for email marketing, streamlining your sales pipeline, cranking marketing automation, and tracking metrics.
On the flip side, if you are a big retailer chain, you need such an enterprise-grade system.
So altogether, to define your business goals and visions to ace customer experience with your CRM, allocate about 10 - 20% of your final budget.
You have the choice to either go for a cloud-based system of Customer Relationship Management (CRM) solution or an on-premise one. And here’s how they differ.
Firstly, a cloud-based CRM lives online. You pay a subscription cost and get a license for your retail companies.
On the other side of the spectrum, for an on-premise CRM system, you make an upfront cost investment. But you can run autonomously. The CRM system will run on your server, and you’ll have to take care of its maintenance, updates, and uptime.
However, with cloud CRM, you’ll have better avenues for custom development and payment. They are easier to scale, and you’ll have remote access for all your devices.
If you look at the current trends, cloud CRMs are rapidly replacing on-premise CRMs. Way back in 2008, 88% of CRMs lived on-premise. But by the end of 2018, in just a decade, cloud CRMs account for 90% of CRMs.
If you’d ask me what the best option is, well, it’s cloud CRMs. Nevertheless, if you deal with sensitive data or if you need complete control over your CRM system, then you might as well go with an on-premise CRM.
But remember, cloud CRMs take fewer upfront investments. And more subscription options, such as monthly, annual, and quarterly subscriptions, are the brownie points.
Your subscription package level, data and records volume, and the add-ons you need can influence your service level CRM investment costs.
In a Software-as-a-Service (SaaS) model like Ingage, you can avail of various tiers of the CRM. Every plan will have a bundle of advanced features and capabilities. For instance, the modules can enhance from Lite to Plus to Professional to Enterprise.
So, the higher the level of your choice, the higher the price as well.
But understand this. As your business grows, so should your CRM. Therefore, investing in a cloud CRM makes sense, for it gives you the scalability to grow at your own pace. You can maybe start small with a Lite plan. Then, as your retail business grows, you can move up the levels and customize it with an Enterprise plan.
So, the level of your plan can affect your implementation cost.
And moving on, again, as your business grows, so will your contact base. When you invest in contact-based CRMs, you would have a limit on the number of records you can store at a specified price. If you hit your threshold, you’ll be notified (or not, in some cases!), and then you’ll have to take a call on either upgrading your record limit or cleaning up your records.
And in the worst-case scenario, be billed for an upgraded plan without any notifications. Nice birthday gift, eh?
Jokes apart, on a serious note, SaaS CRMs like Ingage make it very easy for you to upgrade and downgrade your plans. The pricing is so transparent that you needn’t fear heart-wrenching birthday presents. :)
Now, how about situations where you need just another one or two features but can’t justify the price jump from your existing plan to the upgraded version?
To solve these hassles, some CRM vendors would give you add-ons. They can either come to you free or at an additional cost. So, free add-ons are those native integrations with other tools and other basic dashboard customization, reporting, and analytics.
Alternatively, your premium add-ons would be advanced intelligence, AI capabilities, and other 3rd party integrations.
The number of users per month on a plan will differ from one vendor to the other. While vendor A might give you X amount of users for the Y plan, vendor B might add individual users for a fixed price per month. So, the average cost per user would vary from one service provider to the other.
And sometimes, you might face scenarios where you need to roll out more dough to access a particular feature or add-ons while on a plan.
Decided on your vendor and subscription tier? It’s time to get your CRM rolling.
You can expect your vendor to build customized dashboards, template creation, contact import, data migration, and automated workflow creation in the implementation phase.
And this can cost a whole lot of money. Since this area is often grey, it’s best to ask your vendor directly about the real cost and other expenses that might follow.
Nonetheless, if you do this in a hurry, your implementation fee can pile up. To give you a rough estimate, be prepared to spend $1 on implementation for every $1 you spend on your annual subscription. And sometimes, the range can be anywhere between $1200 to $5000.
Simply put, the implementation phase would require you to roll out 10 - 15% of your annual budget.
Great! You have your CRM up and running. But are your customer service agents running along?
It’s a common ritual for project managers to forget about this essential study stage because they think it is easy to do in-house user training.
Project manager friend, please don’t make this mistake.
Because it’s simply not going to work. (And that’s a research-backed statement!)
Manage more than a dozen members on your sales team? The teaching session can flare up. The best way to approach this is to get CRM developers to offer lectures and training sessions so that your employees are better enlightened.
After all, isn’t it best to study the brainchild from the creators?
Along with this benefit, though, comes the cost factor - set 10% of your final budget for training your employees.
Your support system and tech maintenance call for bug fixes, upgrades, and solving customization issues. And this can vouch for an extra cost of 15 to 50% of your annual budget.
Recommended Reading: The Golden Commandments of CRM Data Management Best Practices for 2021
The pandemic has truly shaken our economy beyond imagination. But don’t let that hamper your need to include CRM in your business process.
So, let’s get going with the top three ways you can implement CRM on a budget.
Generate a detailed specification of your CRM objectives, requirements, and goals. This will better position vendors to offer firm pricing. Once you get this, you can identify the most competitive offerings. You can then decide which extra features you can do without if you are finding it hard to hit the budget.
Oftentimes than not, retailers, rush into CRM selection with the hopes that their vendors will frame the ultimate objective list. But as you should be aware, the vendor’s motto is to maximize the commercial value of the project. So, you’ll get locked in and would even end up paying 50% more.
Just check your records, and you might already have pounds worth of unused software gathering dust. Refrain from adding an alternative solution like CRM software to the list.
In fact, few CRM vendors would even penalize you for buying software incrementally. So, start small, and as you grow, add the necessary licenses.
On this note, while it may be tempting for you to go after a well-known CRM brand, sometimes, that might not be cost-effective. Consequently, getting a tight specification list will help you figure out the features you need and do not need.
You will then find that lower-cost options comfortably meet your needs. Still and all, ensure that you select a vendor who’ll exist to trade in harsh market situations too.
It’s always best to phase your project processes. Don’t go overboard and get locked up. Implement the basics first, and leverage the value it adds. As you grow, add the other capabilities over time.
This way, you can reduce your up-front cost while getting to see the potential of the tech stack. You’d have a fair idea of whether the solution is worthwhile after all, and this will prevent you from developing expensive white elephants.
With this detailed study, I hope you got clarity on how much it would cost you to implement a retail CRM.
Take the CRM adoption process one step at a time, ensuring a steady cash flow throughout the project execution phase, without missing out on the opportunity costs. When you think of what you want to achieve with a retail CRM - start by defining customer-related goals. That will only help you streamline all customer-facing (front-office) processes.
Need help in making the first step? Get in touch with us! Let’s help you implement a retail Customer Relationship Management software without breaking the bank.