Pricing

While the search for the right customer relationship management software should not be based primarily on software prices, price is and will always be an important factor in deciding which system to buy. The ideal way to select software is to find a number of software packages suited for your current (and future) needs, and then compare those packages by price as well as performance. When comparing prices of customer relationship management software, the following points should be addressed:

• Software functionality and features— It is very true that you get what you pay for. There are a variety of reasons why some CRM software packages are priced higher than others (e.g., comprehensiveness of functions, ability to customize, databases supported, etc.). Thus, when you look at software prices, be careful to examine exactly what each software vendor is offering for the stated price.

• Sophistication of the functions included in the software— While the software package may appear to offer a business function, it is worthwhile to examine the sophistication of each business function. The sophistication within a telemarketing, customer service, or sales forecasting function can be quite diverse, even though most software packages have all of the “neat” features, such as customer self-service, call reporting, etc. An example is forecasting, which can be based on advanced statistical calculations of extensive opportunity/sales information, or simply an estimated forecast value that is entered by sales reps in the field.

• Ability to customize software— The ability to customize a software package varies greatly from one package to the other. Some CRM packages come with a customization toolkit that allows the end user to customize the system extensively, e.g., modify and create new fields/screens, alter screen flows and menu options, etc. Other, less expensive packages offer only limited customization options, e.g., a few user-definable fields.

• Price coverage— Prior to comparing prices for different packages, it is extremely important to look at all the supplemental costs related to implementing a system. Does the price include training, support, source code, and upgrades? Are report generators included in the price? If not, how much do these add-ons cost? These expenses may in many cases exceed the price of the software itself, making comparisons difficult. Therefore, decide which additional services are needed and get accurate prices for these services before comparing system prices.

Until you have clearly defined your needs with respect to business functionality, technical features, and user friendliness/support, as well as the potential for each package to meet these needs, it will be difficult to fully compare prices. If possible, make sure that you also calculate the cost of training, support, and customization in your price comparison, because these services often form a critical proportion of your overall systems costs.

Figures C.3 and C.4 below depict the pricing of the software packages listed in Appendix A, and are a reasonable indication for the market as a whole. The high-end customer relationship management software such as Siebel 2001 by Siebel Systems may cost several hundred thousand dollars for a customized, multi-user system with 100 licensed users. On the other hand, an enhanced contact management package such as Entice! by Multiactive Software, Inc. can be purchased for around $15,000 for 25 users.

Figure C.4 below depicts the server price range of the software packages selected for ISM's Top 30.