- A customer relationship management (CRM) solution tracks all the activities, strategies, and technologies that companies use to manage customer relations.Â
- This article highlights ways to evaluate the total cost of ownership of a CRM solution.
A customer relationship management (CRM) solution helps businesses manage interactions with their current and potential customers, creating loyalty and boosting customer retention. As customer loyalty and revenue both significantly impact a company’s business growth, adopting a CRM strategy can result in increased profits for any industry.
According to a 2022 report by Grand View Research, the global customer relationship management market had a valuation of $58.82 billion in 2022 and is estimated to expand at a CAGR of 13.9% from 2023 to 2030.
As the demand for CRM tools grows across business sectors, companies are also keen on integrating other fields like business intelligence, embedded analytics, the internet of things (IoT), and artificial intelligence into CRM solutions to further drive product enhancement and innovation. For instance, in April 2022, Salesforce, Inc. launched ‘CRM analytics’ that added AI-capabilities to CRM which can benefit sales, marketing, and service teams of several industries including retail, IT & telecom, and others.
While CRM acts as a boon to businesses, it is important to consider certain factors before diving into CRM deployment.
See More: The Future of the CRM in 2023
Evaluating the Total Cost of Ownership of a CRM Solution
The total cost of ownership of CRM solutions goes beyond the monthly or annual software costs. It is necessary to understand what it takes to implement, manage, and utilize CRM tools. Let’s understand some key variables that companies should keep their eye on before owning a CRM solution.
1. Implementation considerations
The effectiveness of any CRM solution is based on its implementation process. It refers to the time and resources needed to successfully deploy the CRM. According to a December 2022 report by Aptitude 8 and Ascend2 that surveyed 332 sales and marketing professionals that use either HubSpot or Salesforce CRM solutions, about 83% of those who were satisfied with CRM implementation said their CRM tool was effective in achieving strategic goals.
Additionally, data migration and integrating the new CRM tool with the already established sales and marketing processes are the biggest hurdles while implementing CRM solutions.
2. Software costs
Although pricing structures of different CRM solutions vary, software costs include the following:
- Renewal fees: These refer to initial software costs that are to be paid every year.
- Additional licenses/users: The initial contract provides details about the number of users or features supported by the CRM tool. However, in situations when companies feel that more users should use the CRM tool or they need access to more CRM features, then organizations need to pay for additional users or features.
According to the Aptitude 8 report, about 65% of the surveyed professionals said that they spend between $2,000 and $10,000 monthly on CRM.
3. Management & support tasks
Management considerations refer to the number of employees businesses need to manage their CRM solutions. The support tasks cover activities like staff training, data cleaning, maintaining documentation, integrating with other software tools, identifying and fixing bugs, feature customization, and many more.Â
According to the Aptitude 8 report, 98% of the surveyed professionals said they have at least one paid employee working on the CRM support and associated technology. Management and support tasks also include costs that organizations spend on external service providers or contractors that support their CRM and sales/marketing tools.
4. CRM utilization
With CRM, you can simplify customer interactions, center your business growth around your customers, align your sales and marketing teams, automate daily tasks, create customized workflows, and share data with ease. Proper CRM utilization is key to unraveling its fullest potential.
A CRM solution is effective when the sales and marketing professionals are able to have a comprehensive view of customer data across departments. The tool should support feature customizations that align with specific business needs. Typically, most businesses evaluate CRM tools based on parameters like features and functionality, ease of use, ability to customize and integrate with other tools.
See More: How CRM Data Analysis Can Help You With Your Sales Campaigns
Takeaway
With the increased focus on customer behavior and their preferences in recent times, organizations should consider taking the CRM path to stay ahead of their competitors and offer customer centric services to its potential buyers. CRM solutions come in a variety of strategies and applications that can virtually fit any business type.Â
While CRM can benefit every business, it is important for organizations to weigh-in on the factors that reveal the total cost of ownership of CRM solutions so that the CRM tool aligns with their business goals.
Do you think CRM solutions can increase operational productivity and enhance customer engagement in the long run? Comment below or let us know on FacebookOpens a new window , TwitterOpens a new window , or LinkedInOpens a new window . We’d love to hear from you!