If you’re familiar with the concept of budgeting, you’re probably also familiar with all of the hidden costs that threaten to push a budget past its limit. Whether planning a trip or renovating a bathroom, sticking to a budget is easier said than done.

Budgeting for software is no different.

If you’re planning to purchase a CRM, costs can quickly get out of hand. Between customization and training, support costs and data migration, a CRM will almost never cost what the “price per user per month” sticker price suggests.

To avoid surprise costs during CRM selection and implementation, you need to consider all of the potential costs that could push your CRM budget past its maximum. If you don’t budget correctly, you risk wasting time and money on choosing a CRM that your company can’t afford.

If you want to make sure that you’re covering all of your bases when it comes to planning your CRM budget, you need to ask the right questions to make sure you don’t get shortchanged.

1. How does the contract work?

Like signing any subscription-based contract, make sure that you read the fine print. Although most cloud-based CRMs work on a per user, per month basis, plans can be tiered differently.

Some plans scale up based on the number of users, while others scale up based on features. For example, one CRM might offer a basic plan for $25 a month for up to 5 users, while another offers a basic plan for $10 per user per month. Make sure to calculate what makes most sense for your business based on how many users you’ll have.

Keep in mind that it’s not necessary for everyone on your team to have their own user account—team members can share accounts if they won’t be using the software regularly.

Before signing anything, also check to see if there’s a minimum commitment you’ll need to make. Some CRMs require a minimum one year contract and will make you pay a penalty if you cancel before the first year is up.

PRO TIP
You can usually get discounts on CRM software if billed annually as opposed to monthly.

2. Does it need customization?

Customization is one of the most important considerations when looking for a CRM. Many CRMs come with “out-of-the-box” features, but it’s rare to be able to get up and running with a CRM without making any adjustments.

The better question here might be: How much customization does it need? The more customization you’ll need, the more you’ll need to shell out.

Customization can fall into 3 different categories:

 

  • Basic customizations such as those used in fields for lead and contact information.
  • Workflow customization involves setting up rules and automations for moving customers through the sales pipeline. This includes setting up sales stages to fit your sales cycle.
  • Integration customization is the most complex and involves setting up integrations with other software that you’re using.

 
Casey Hill, a small business CRM consultant, says that when working with industry-leading software, “the highest costs incurred are around integration work taking longer than expected or going beyond scope.”

He says that going over budget usually stems from custom integrations, or having to pay outside consultants for extra hours to set up the system.

Whether using in-house or outside consultants, integration work can incur significant costs when trying to ensure that software works well together.

PRO TIP
Make sure that you know exactly which software tools you’ll need to integrate with and check to see whether integration between the two is possible.

3. Does it include support?

Believe it or not, customer support is not always a guarantee. Some solutions offer limited support depending on the pricing plan you’re on.

Here’s an example of how pricing plans might be structured in relation to support.

Support Basic Plan Premium Plan
Hours Monday-Friday, 9-5pm 24/7
Channels Email Phone, email, and live chat
Agents Random support agent Dedicated support agent

If you’re on a basic plan and you need more support than anticipated, you’ll likely have to upgrade to a premium plan. Also, make sure to read reviews of your chosen CRM. Many reviews talk about the support options available, and on GetApp, there are even separate ratings for customer support.

PRO TIP
Self-service support options such as FAQs, knowledge bases, and community forums can help fill the gap when support agents aren’t available.

4. Do you need to migrate data from another system?

If this isn’t your first rodeo, you’ll have a ton of data from your previous CRM (or maybe scattered throughout spreadsheets) that you’ll want to migrate over. The problem is, if this data is old or hasn’t been properly organized, you’ll likely incur costs migrating and improving data quality.

Sam Taylor, a senior consultant with CRM implementation specialists Coastal Cloud, says that the cost of legacy and third-party data is one of the most underestimated costs he runs into during implementation. It’s not just the cost of transferring the data, but cleaning it up as well.

“Often the client will specify validation rules or deduplication restrictions in the new CRM where the old system’s data would conflict with those. This means that we get paid by the client to deduplicate or adjust their old data to fit the stronger data quality rules, or even ignore those rules when importing the old data with the onus on the client to clean it up in the CRM itself at a later date,” says Taylor.

“The challenge with data cleaning is that there’s no ‘one size fits all’ solution. It requires manual, hands-on parsing of the data, learning what’s supposed to go where, and also seeing what might be missing. Even deduplication isn’t generally automatic and requires some level of iterative approach.

“All this means it’s costly and the client is paying a consultant or contractor to learn the data, communicate with subject-matter experts (SMEs) at the company to answer questions, and then figure out how the data needs to be transformed to meet the new CRM,” says Taylor.

Whether you’re cleaning up the data yourself or getting someone else to do it for you, it’ll cost both time and money during the implementation process.

Taylor notes the importance of having someone in the company who know the ins and outs of its own data to avoid having to paying consultants to go through it.

PRO TIP
Having a dedicated data analyst in the company will ensure that you’re keeping your data in check across all software tools.

5. Will you need to pay for extra storage?

Depending on how much data you have, you might need to pay extra to store it. This is where keeping your data clean and getting rid of legacy data will be especially important: you don’t want to pay extra to store data that you don’t even need.

“Our rule of thumb is to say that when in doubt, after 2 years, non-transactional data might not need to be included in the CRM. Transactional data, on the other hand, is extremely valuable for reporting and analytics purposes, particularly in the growth of AI,” says Taylor.

Because AI relies on data to make smarter predictions, having historical transactional data might actually be valuable to keep.

Taylor provides an example of how this data could be useful.

“Sales forecasting relies on historical data to build prediction models. Having transactional data present allows these apps to get a jump start on their modeling, not to mention the obvious benefits to sales and service teams to reference prior business relationships.”

Keeping your data clean is also really important in the age of GDPR. It goes beyond just wanting to keep your data organized and actually needing to in order to comply with regulations. This extends to data storage and where your data is being kept. Do a bit of research to determine where your data is being stored and which security protections are in place for it.

PRO TIP
As Taylor notes, have a field in your CRM for “last updated” or “date modified” so that you know which data can be more readily discarded.

6. Does it provide mobile access?

Given the ubiquity of remote working and the busy schedules of sales teams, having a mobile app or mobile web access with full functionality is imperative for sales teams.

While mobile apps may seem like a staple in many CRM solutions, there are some which don’t provide full access unless you upgrade to a premium version of its pricing plan. Similar to support, mobile app access and functionality can be limited to the pricing plan you’ve chosen.

PRO TIP
Some software solutions offer a mobile-friendly version of their solution as opposed to a dedicated mobile app. This might be enough if you only need occasional mobile access.

7. How much time will it take for training?

One of the most commonly underestimated costs of a CRM is the training time it takes for staff not only to learn the system, but to get on board with it.

While training time ranges based on the complexity of the system, it can take anywhere from weeks to months to get everyone on the same page with a CRM.

Sandrine Provoost, a strategic change consultant specializing in CRM implementation, says that the organizational changes related to implementing a new CRM can be one of the biggest budget busters.

“Typically a CRM project should plan to add about 20 percent of the total project budget to change management in order for the project to be successful. It is one thing to implement and launch a CRM software successfully. It is another to ensure that all employees are properly trained and can use the CRM solutions effectively at day one of the go live,” says Provoost.

“These cost include training, communication, and stakeholder engagement, but training is definitely the most costly activity. It includes trainers, travel (sometimes internationally), training material development, and training time for employees (off their normal day to day job),” say Provoost.

Among the potential risks of poor training, Provoost lists:

 

  • More calls to the customer support to determine how to use the software.
  • Productivity decreases because employees don’t know how to use the system.
  • Only a small percentage of the CRM’s features are used, and ROI is low.
  • The CRM is abandoned altogether because employees don’t know how to use it.

 
The change itself will cause delays in general sales team productivity, as well as the time it takes to get up and running with the system. There’s also the risk of losing out on the benefit of the software completely if people aren’t using the tool.

It’s in your best interest to get the sales team trained as quickly and accurately as possible to avoid further training costs.

PRO TIP
Always overestimate the time it’ll take for training to have a realistic estimate of when you’ll start seeing ROI on your CRM.

Bonus question: Will you be implementing in house or using a third party?

Consider whether or not you’ll be implementing a CRM in house, or using a third-party specialist. Depending on the complexity of your CRM and what you want to get out of the system, you may need to hire an outside consultant for your CRM needs, which could incur significant costs.

Having a dedicated in-house CRM manager can add up as well, but it could also ensure that your data is being organized properly and that there’s always someone on hand to train new staff on system.

Weigh the pros and cons and keep these options in mind when considering the complexity of the system you’ll be adopting.

Set the right metrics for measuring the true cost of your CRM

You won’t be able to know if your CRM is worth the cost unless you know exactly what benefit you want out of it. Either way, it’s going to cost you money. If the investment is worth the return, it’ll be that much easier to justify spending time and money on choosing and implementing a solution.

Set some goals for your CRM to determine:

 

  • Which metrics will be most valuable for measuring CRM “success” in your small business. For example, maybe your goal in adopting a CRM is to increase call volume among your sales team.
  • Which features you’ll need to measure whether your goals are successful. Continuing with the same example, look for features that’ll integrate with a VoIP solution and help you easily track call volume.
  • How long it’ll take for you to see an ROI before you deem the implementation a success. In the same example, if you don’t see call volume increasing within six months, you might need to reconsider some aspects of your CRM.

 
From there, you can start answering the questions above to make sure that the CRM you’ve chosen will help you achieve your business goals and be worth the investment.