CRM Project Cost: 8 Crucial Points to Master

1) Analyze the Different Costs of a CRM Project

To begin with, it is important to distinguish between two elements: 

• The price of a CRM refers to the amount that the customer company must pay to acquire or use the software: licensing fees, subscriptions, training, technical support, etc. ;

• The cost of a CRM additionally includes indirect – and sometimes hidden – costs that stem from your choices: scalability, customization, data management, business interruption during transition to the new system, loaded cost of a CRM manager, etc.

Thus, while most leading software vendors announce a licensing cost ranging from EUR 20 to 150, in reality, the total cost of a CRM project is more likely to be between EUR 5,000 and 100,000!

Why such a wide range?

Because the costs of a CRM project vary considerably (especially when implementation is included) depending on the size of the company, its specific needs, and the features required in the CRM solution.

These figures are only estimates, and actual costs can vary significantly based on many factors.

To understand better, here is how the implementation of a CRM software is organized.

a. Licenses and plans

This is the recurring cost for using a solution in the form of a SAAS subscription (we will explain what this means a bit further down). This subscription is generally annual and tacitly renewed. Pack systems can apply if specific features or modules need to be integrated into the basic offering.

It is important to understand the full scope of services included in the starting price. Indeed, some CRM vendors push their clients to opt for dedicated IP address rentals, which results in an additional cost. Other services can also increase the bill, such as unlimited technical support, access to third-party integrations, or database cleaning, which can require a significant amount of work.

b. Installation

Then starts the installation phase, which generally includes the following steps: 

• Account creation;

• Configuration of your data model (parameterization of existing templates or specific paid developments); 

• Routing system setup (IP, subdomains, etc.);

• Support to get you started.‍

c. Development of custom integrations

Any integrations that are not included in the basic subscription will require custom development. These can affect both internal tools (ERP, CMS, etc.) and external ones (linking with the information systems of your clients or suppliers, for example). This work is fundamental because it ensures the fluidity and efficiency of your CRM. It involves planning a significant number of internal development days or paying for the services of an external provider. Another cost!

d. Configuration and performance tracking

In the event that your CRM is intended for marketing use (we will talk more about this later), it is highly likely that you will want to integrate automated scenarios (for example: sending a thank-you email when a customer places an order on your e-commerce site).

Task automation can represent a significant amount of work and mobilize a consultant or an employee to build processes, as well as create templates and emails. They will also handle setting up tracking and reporting.‍

e. User training

The cost of training on your new CRM varies depending on the scale of the change and the resources deployed to support it. For a very small business (VSE), transitioning three sales reps to a new software can be relatively simple. But for a sales force of several hundred people, it may require a launch seminar, presentation meetings, the deployment of on-site training sessions, and follow-up meetings.

f. Project management

The success of a CRM deployment generally requires that an employee be responsible for keeping it alive in terms of daily usage, but also with a view toward continuous improvement. You should count the loaded cost of this employee in proportion to the time spent on this task.

g. Maintenance

This is characterized as corrective (ensuring all features work properly), developmental (solving technical bugs), and preventive (improving existing features). In SaaS, this cost is borne by the vendor. However, there may be out-of-plan interventions on your custom developments.

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2) Writing requirements specifications

As you will have understood, defining the cost of a CRM project cannot be done without a prior study. It is therefore essential to create requirements specifications. Here, for example, is a template tailored for retail brands. Other standard templates exist online, feel free to use them!

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3) Project manager: a key role

The cost of a CRM project therefore depends on many variables. To help you manage such a project efficiently, it is highly recommended to appoint a project manager or hire a consultant for this purpose.

However, make sure to understand the different roles they will be required to play, which can correspond to as many individual jobs: 

• Internal audit and drafting of requirements specifications; 

• Vendor selection;

• Support during deployment;

• Marketing automation setup;

• Continuous improvement of the CRM, etc.

These missions do not happen at the exact same time, and may involve different profiles with specific skills. Profiles are typically technical (software, data, API development, etc.) or marketing-oriented (performance, automations, etc.).

‍Finally, hiring external service providers should not discourage you from appointing an in-house person to coordinate and streamline the different implementation phases of your CRM project. The more stakeholders there are, the more you stand to gain by having a key internal role to coordinate everything.

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4) Defining the objectives of the new sales software

From the solopreneur losing business cards collected at a job site to the sales management team wanting to centralize reports from sales reps, everyone has an interest in organizing and leveraging their sales and marketing data!

A CRM is thus meant to impact the commercial and financial performance of all companies. It is an investment, not a dry expense. This is why it is very crucial to determine its ROI. This return on investment can be translated into quantifiable goals (revenue, profitability), etc., or into operational benefits (time savings, internal information flow, etc.).‍

When the expected benefits are defined and quantified accurately, it is much easier to secure the investments needed to complete the project. This typically appears at the beginning of the requirements specifications.

5) Meet the different types of CRM

Now that you have defined your objectives, you can choose which type of CRM tool is right for you.

They are generally grouped into three categories: 

🚗 Sales CRMs: sometimes called SFA (Sales Force Automation), for companies whose growth depends on phone or field prospecting;

💻 Marketing CRMs: if your development relies on online activity, particularly emailing or automated prospecting;

☎️ Support or Helpdesk CRMs: systems designed to manage high volumes of incoming calls or emails for customer support.‍

Here are the most widely used solutions in France by CRM category:

Different pricing models

As we will detail below, the majority of solutions work under licensing models (subscriptions). 

But the type of CRM will impact how you are billed: 

• For Sales and Support CRMs, the price is usually based on the number of users;

• In contrast, most Marketing CRMs take into account the volume of contacts or the number of email or SMS messages sent. 

Furthermore, generalist CRMs often propose tier-based plans matching different levels of needs, with gradual prices.

Let us note, however, that some vendors are beginning to mix both pricing approaches (license + volume of contacts or emails). 

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6) Standard Solutions VS Custom-Vertical CRMs

Modern CRMs are increasingly adaptable to companies' specific organization and sales cycles. Nowadays, no-code blocks allow you to customize some modules of your CRM software to avoid loss of information or lack of granularity in sales management and data analysis.

But exceptions remain in many sectors and industries.

For example, companies that market their products through indirect channels (most notably in retail) are faced with the limitations of standard CRMs and mostly turn to custom-vertical CRMs. As explained in this article, the choice of a vertical CRM designed for retail (GMS) field sales is crucial because it meets all the expectations of such a solution: 

• Custom in-app store audit forms;

• Offline mode capability; 

• Mobile app and UX optimized for the field;

• Immediate, automatic sync (once connected);

• Centralization of sales and marketing data;

• Route optimization features for sales reps;

• Time optimization, leading to higher profitability.

7) SaaS VS On-Premise Software: Understanding What's at Stake

A SaaS (Software as a Service) CRM is a software hosted on the service provider's servers, which users access through a web browser or a dedicated application. This is what we call cloud-based operation.

This model of usage has become widespread, replacing local installation (on devices), which was the standard practice in the past, known as "on-premise." At that time, we talked about perpetual licenses, where the client bought a program "forever."‍

The subscription model has prevailed due to its flexibility (users can access the CRM from any internet-connected device), automatic updates managed by the vendor, its scalability based on market trends and needs, and deployment simplicity.

This system significantly reduces the risks of software obsolescence or compatibility issues with newer hardware, because the subscription-based CRM publisher takes care of its system's evolution, allowing it to fully integrate into an ever-changing tech landscape.

Another major benefit of SaaS: CRM vendors use the subscription model to package plans that let you "limit" the expense to the exact usage you need. Finally, since the license is defined in time, it protects you from a permanent investment, allowing you to walk away if your strategy changes. In this respect, it is comparable to a renting system.

Despite this, some companies still prefer locally installed CRM solutions due to security, compliance, or direct control over their data. These are known as on-premise licenses, which require installing the programs on the relevant users' devices. This solution has the advantage of working offline. The company also retains absolute control over its data, which is no longer stored on third-party servers. However, it represents a heavy load for deployment and maintenance and can yield higher upfront costs than cloud operations.

8) Free CRM: Is It Possible?

If we consider only the purchase price (and not the hidden costs), the answer is... yes!

Here are the three options available to you in this case.

1. Open-source CRMs

Open-source CRM software can be free to use. For instance, Dolibarr is an open-source solution that integrates multiple modules to manage sales, purchases, invoicing, accounting, or human resources. Beyond CRM, the solution actually acts as an ERP. Dolibarr benefits from an active community ensuring its development and maintenance. Its deployment can be done on-premise or in the cloud.

‍Of course, as detailed extensively above, the cost of a CRM includes other variables such as implementation, training, specifications, etc. Additionally, open-source software can be complex to adopt for freelancers or very small businesses.

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2. Free trial plans

Furthermore, most solutions offer free trials, which can satisfy the basic needs of micro-entrepreneurs, small businesses, or early-stage startups. In Hubspot’s case, it uses a freemium model, meaning you can use a limited version without paying anything, then upgrade to a complete version as needed. But as you have understood, a completely free, full-featured CRM software does not exist.

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3. Internal development

Finally, despite the many advantages standard CRM solutions offer, some companies still choose to build their CRM in-house. These cases, now rare, generally concern specialized tools for niches not addressed by the market, notably due to a lack of a sufficient customer base. 

In other cases, the company believes it has all the in-house talent to lead such a project. If you are one of them, allow us to warn you about the side-effects commonly encountered in this type of approach: 

1. Ensure that your technical specifications anticipate future updates, including those for APIs, to connect your CRM to the third-party apps it will need to interact with;

2. Keep in mind that if the developer in charge leaves the company, you risk losing data or access to code and documentation. The worst-case-scenario? A former employee blocking and bargaining over access rights... 

3. Last but not least, work closely with the developer and closely supervise the dedicated development hours!