The best deal on paper isn’t always the best deal. Your CRM invoice may look like you’re spending a few hundred dollars when you’re actually investing thousands. So how do you know the true cost?
When you’re calculating the real cost of a CRM, start by adding up the setup fees and monthly costs, but don’t stop there. You also need to calculate the value of your time.
Time: The Hidden Expense
Time is money – especially when you’re on the job. When a CRM requires a large time investment from you and your employees, you lose money. So ask yourself, “Do I make more money for the company updating the CRM or doing my job?”
Here’s an example. If an engineer’s billing rate is $100/hour, and they spend six hours managing the CRM, that time investment results in $600 lost revenue.
If you decrease the time you spend managing the CRM, you save major money. Let’s say this same engineer now uses a different CRM that only requires two hours to manage. That time shift saves the company $400.
How to Figure Out Your Total Cost
Start with setup fees and monthly fees. Then factor in the time it takes to set up the CRM, who does it, and what their time is worth. Now, add the amount of time that each employee spends in the system every week according to their approximate hourly rate. That’s your true cost.
Here’s how it adds up. Which of these solutions costs less?
- You spend $10 per user/per month. Then each user spends 40 hours a month updating data.
- You spend $30 per user/per month. Then each user spends five hours a month updating data.
When you factor in time value, B is your obvious deal.
A CRM may seem like a good deal on paper, but when employees have to spend numerous hours working for the system (rather than it working for them), you lose more money than you may realize. Instead, calculate the real deal. Spending a little more on an efficient solution saves you thousands in time.