Identify Your CRM Costs So You'll Know Your ROI

I have to be totally up front with you about CRM costs, or Customer Relationship Management costs. Don't start shopping for CRM software and think you have found the true cost. Don't assume that service dollars required to customize it, and implement it, are a rule of thumb formula such as $1 in service to each $1 in software. This is the sort of thinking that has given CRM a bad name over the years.

The simple truth is that scaring yourself about CRM costs before you you quantify CRM benefits is no way to start a project. Certainly, the investment you make will be significant because you want to make your company more competitive. And to do this, you will spend both time and money.

The good news is that the investment will pale in comparison to the CRM benefits you will receive. But you must look at it in the context of these benefits, or you will certainly run scared and resort to the backwards approach.

The Benefits Perpetuate

That's the great part about this process. As with most projects, a single investment will reap rewards year after year. This is very powerful and you need to keep this in mind. Still, the CRM costs can be intimidating at first. Here are some things in which you will be making an investment....

• Consulting services for developing a CRM strategy. Even doing this internally will cost you in lost opportunity. So, it may make sense to get some outside help.
• CRM Software architecting - Database design and ongoing management.
• Computer Hardware and Software
• CRM Strategy rollout and training
• CRM Project Management - and I don't mean just the software part.
• Change Management - this could be internal or external but it still costs something. This is not something you can skip!
• Integration Services with other systems - like your accounting or ERP system
• Productivity may suffer during the transition period and also during the development phase as new duties are absorbed by your staff

This tally of costs is critically important because it will ultimately be presented to your CFO for approval. It has to be clear that this type of investment will return CRM benefits that are achievable and sustainable. Otherwise, it's not going to pass muster.

This is why a well written CRM Strategy is so important because this is the plan that details what your are trying to achieve and how you will achieve it. If it's clear, that's a good thing. But it also has to be persuasive in that it should show that you've thought through all of the risks.

Return to Quantify CRM Benefits from CRM Costs

Next - Manage CRM Risk

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