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How can custom CRMs help businesses save money? [Case Study]

Learn how custom CRMs can help businesses save money compared to ready CRM enterprise solutions!

As a company matures, understanding your customers becomes more and more essential for growth. If you can improve your business process throughout the entire customer lifecycle, then you’ll be able to increase your profit potential. That’s right–effective CRMs foster so much value they promote profitability as you grow. The big question is, should you choose custom CRM development or an enterprise “ready CRM” solution like Salesforce or Hubspot?

When it comes to long term scalability, custom CRMs help small and mid-sized businesses save money when compared to ready CRMs.

However, custom CRM development isn’t for everyone. You have to evaluate your goals and weigh your options to determine whether or not custom CRM development is a smart choice for your business. In this article, we’ll help you answer the overarching question: “How can a custom CRM help my business save money?

What is a CRM?

Before going into all the details of how a CRM can help your business save money, it’s important to define what a CRM is. The acronym ‘CRM’ stands for Customer Relationship Management. In most cases, CRM refers to a software system to manage customer data and information.

Definition of CRM - Customer Relationship Management

Want to learn more about the term ‘CRM’? Check out our latest blog post on the topic here.

Cost Analysis: Custom CRMs vs Enterprise Solutions

Enterprise SaaS companies like Salesforce and Hubspot offer popular out-of-the-box features on their ready CRM platforms. But if you have a unique business model, then the cookie-cutter features of a ready CRM might not be the best choice for you. Alternatively, some companies prefer to develop their own custom CRM as it can blend in more directly with their business processes.

Business automation and custom CRM development is something our company (Winnona Partners) specializes in. We’ve helped mid-sized businesses create innovative CRM software that saves them money compared to enterprise solutions. The goal of the following case study is to present a realistic cost-benefit analysis to demonstrate how custom CRMs can help companies save money long term.

Short Term Investment, Long Term Affordability

How do you determine whether or not a custom CRM is right for your business? First, you need to figure out which features you need in your CRM. Secondly, you need to talk with your developers to determine how much it’s going to cost to build those features, and what your recurring costs may be. Finally, you’ll want to compare those findings with the cost of a ready CRM feature set.

Steps for determining whether or not a custom CRM is worth the investment
3 Steps to determine whether or not a custom CRM is worth it.

Although custom CRM development requires more time and money upfront for development, as a business scales these systems can save money long term. Custom CRMs end up becoming more affordable to maintain than enterprise solutions because those companies have considerably higher monthly expenses.

What?! How is a custom build more affordable long term? The most important factor for saving money long term is scalability. As your business continues to grow, you’ll likely want to add more users to your system. This is where ready CRM solutions upcharge substantial monthly fees for access to their services.

For instance, HubSpot’s pricing tiers only gets you between 1-10 “free” users per account. After that, they charge an additional $50-120/month for each new user that needs access to the account.

Instead, imagine getting a lot of the core functionality you need from HubSpot without a user cap. Then, combine this with additional business-specific automation tools that help streamline your operations. How much more time and money could you be saving by automating routine business tasks while also tracking client and customer information?!

Comparative Case Study: Custom vs Ready CRMs for Small and Mid-Sized Business

Let’s say you’re a company with 30 people who need access to your Services Hub level Enterprise account ($1,200/month). With that plan you get 10 free accounts, and will need to pay up to $150/month for each additional user ($3,000/month). Therefore, you could end up paying $4,200/month for HubSpot–not including add-ons. That’s $50,400/year! That amount doesn’t include initial setup costs.

Compare that with custom CRM development and what do you find? For most businesses, full-production custom CRM development lands in the $100-300K range. But after that, monthly expenses can generally be kept very low ($1,000-2,000 or less/month).

The best part is, you won’t have to pay extra for each additional account that needs access. Rather, the monthly costs for running your system will scale depending on your usage. Therefore, that monthly cost would likely only need to increase when adding hundreds or thousands of additional users or tasks!

This means that with custom CRM development, your company can have it’s own proprietary system operating exactly as you need it to for a fraction of the cost that enterprise solutions charge. So when the example company with 30 users recoups their initial payment, they’ll start saving around $3,000 every month. That’s a savings of roughly $30,000/year!

And what if you’re a company with hundreds or thousands of potential users? Then you might see a massive savings within the first couple years of development.

Custom CRM pricing vs HubSpot pricing: comparative analysis chart
Savings Analysis Chart: Custom CRM development vs HubSpot Pricing

The chart above demonstrates a plausible scenario for small and mid-sized businesses. It’s important to note that the initial custom CRM development costs in this example are arbitrary but rational based on historic data.

As you can see, if your business has hundreds of people who need access to the system with fine-grained controls and access to sales resources, developing a custom CRM is a no-brainer! In this scenario, even a smaller business can begin saving tens of thousands of dollars within five years of development.

Conclusion

Do you operate an established business? Do you have sufficient funding for an upfront investment to save money long term? If so, then a custom CRM is a worthwhile investment.

However, understanding how a custom CRM can save you money is just a preliminary step. The real work happens when you begin brainstorming your feature set, drafting a wireflow, and designing on UI/UX mock-ups. From there, you can get a realistic estimate for how much time, money, and effort a custom CRM build will take.

In order to plan all of this effectively, you’ll need to work with highly skilled developers, either in-house or contracted. You need a team that can understand your business goals intimately to make intelligent decisions about the architecture of your system. Most importantly, you need to create technology that will provide lasting value for your entire organization as you scale.

Are you an established business interested in developing a custom CRM to save money long term? Contact us to learn more!

By Jonathan Richter

Jonathan is CEO of Winnona Partners, a custom software development company based in Atlanta, GA that specializes in helping startups and small businesses thrive. He's also a classical guitarist, and has studied Chinese language, music and culture extensively.

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