How CRM buyers can negotiate the best deal

CRM software buyers should choose wisely the first time because the software becomes so embedded in the organization that switching to a different vendor is unlikely, according to procurement analysts at market research firm IBIS World Inc.

In a recent report, the analysts say that replacing an installed CRM system with one from another vendor would be highly disruptive to the business and would require a new round of training — plus there’s a risk of losing customer data in the transfer.

“As a result, buyers should be highly selective in choosing a provider and assume that they will be using their CRM system for a significant amount of time,” the report says.

IBISWorld recommends negotiating for a lower monthly rate at the outset. Subscription rates, which average $162.50 per month per user, range from $25 to $600 per user per month. “Profit margins for CRM software providers are high at 21.7 percent of revenue, which suggests there is significant room for buyers to negotiate lower prices,” the report says.

The 28-page IBISWorld report also provides the following:

• The market share and financial risks of ten CRM vendors
• A scorecard for making purchase decisions
• Key RFP elements
• Negotiation questions

Click on the link below to download the IBISWorld Procurement Report on CRM software.