Is it worth it to implement a free CRM?

Hi Paul,

I have only worked in IT since 1982 but I can say definitely you cannot say "You get what you pay for". The industry is top heavy with radically over priced products and services. The only saving grace most large IT firms have for customers is that they have great Insurance policies so they can be sued. So please do not think that price and value are interchangeable.

I have worked on a range of CRM implementation from Microsoft, Oracle, VTiger (Open Source), SugarCRM, etc.

I have seen no difference in efficacy between Free, Open Source or Proprietary systems because almost without exception the choice of technical platform is about a fourth order decision and rarely has any impact on the ultimate result.

I completely disagree with the proposal that Free software is in anyway of lower value than proprietary/fee for license software. In fact on the whole it seems that support and product updates in the Open Source world are vastly superior to those from our major vendors. My point though is that a particular technical product choice is unlikely to impact the result you get.

Of far more importance are:
1. The commitment within your organisation to implement customer centric processes.
2. Your commitment to data governance and management practises that leverage the innate and mostly untapped information about your customers within the systems that you now have.
3. Your commitment to maintaining quality information.
4. your understanding that buying/implementing the software will represent about 20-30% of the real costs of implementing a CRM System.
5. Your ability to support, maintain, modify and grow the system.

On the technical side you need to consider no 5 above and look at how hard will be to move from one platform to another when you decide to do that in future. To do this, look at the products' compliance to international vendor independent standards (eg ebXML, CRML, Xnal, etc).

I have seen companies get into trouble with proprietary systems where upgrading the platform requires significant rewrites to interfaces, workflow etc. Watch that as well.

I firmly believe that unless you are sure of all of these issues, have complete buy in from stakeholders and are personally convinced of the benefits that CRM will bring, the technical solution is irrelevant.

Most importantly make the vendor speak in YOUR language not theirs. Do not accept anything that does not specifically meet your needs.

Our approach is to have the owners/managers of the business define the rules and business requirements but ensure that those that will have to hit the keyboards with their fingers decide on look and feel. (Of course if the system cant meet the needs of the end users, it will fail.)

Hope it helps.

Barry
(we use vtigerCRM because it was free and we can modifiy it as we see fit, being a software development company, It may or may not suit others)

Aside from essentially agreeing with all the points raised by Nancy Nardin, Jan and Luke above, an issue that I believe is oft overlooked when considering whether or not to adopt CRM - regardless of if it is free or paid - is simply that no CRM package, in and of itself, is a solution to poor sales performance though it could help competent sales management weed out the incompetent sales performers.

Good sales performance starts with the choices you make for the people you include in your sales force. Obviously the objective is always one of securing your order intake. Sales winners - typically sales 'engineers' as distinct from 'order takers' - are winners first because they know how to create the idea of value of the product or service in the mind of the buyer and they ask for, and expect, the order; second because they know how to differentiate, track and follow up viable potential buyers which typically includes using CRM type tools to accomplish those objectives.

It is also worth bearing in mind that, in the case of average sales people, attempting to get them to follow any form of organization as is imposed by requiring use of CRM is rather like attempting to herd cats.

So start with inquiring of your brightest, best sales people, what features and functions would they like to have that you are not already providing and that they believe will improve their ability to close sales: For example, in the absence of an in-house CRM solution, how are they currently managing to be as successful as they are?

Get the buy-in of your sales stars to a specific 'must have' set of capabilities and then look for the packages that, at a bare minimum, offer those capabilities regardless of paid or free because you will otherwise pay far more in resultant losses from missed sales opportunities that could have otherwise been secured had the salient data/information otherwise been available to enable follow up and close.

Sales tools and teams should always be no more nor less than about identifying, securing, building and retaining viable customers: It starts with having competent sales people and is complimented by providing them with data resources that they recognize as supportive of their efforts to win sales. If they do not believe in it, they will not use it and you will be the poorer for that.

Paul,

It is true that, if a CRM system is used wisely (ie, for the functions you need), it can add significant value and return-on-investment. In your situation, with fairly limited requirements, Free CRM (www.freecrm.com) should suffice. It isn't "free" once you decide to go with a full production version, however it is hosted, and it has all of the basic functionallity you mentioned, including reporting. If I remember correctly it costs approx $9.99 per month.

I have also used Sugar CRM in the past, and highly recommend it as well. Sugar is open source, so your internal staff could develop your own features and functionality at no cost. Or, for a relatively low price-point (compared to Microsoft, Salesforce, etc) you could have all of the functionality you need and then some. All of this with full support, software updates, and mobile capability.

All in all, I don't think you can go wrong with either. I hope this was helpful for you!

-Doug

Is free LinkedIn better than a paid networking service? It depends. The same is true of your CRM system.

I think that asking the question which you have asked indicates that the project has lost focus. Price should not be a major point of consideration in any CRM project. The questions you should be asking is this, "Which system creates more value for the company? How?"

You need to consider that the system will not enter data, analyze data, provide insights, or improve your customer experience. People do these things. Which system best supports your people who do these things? If you don't have these people in place, get them first. Good people on your team can answer the question of which system is right without ever considering the price.

Don't ask if the price is right. Ask if the system is right. Then just figure out how to pay for the right system.

Paul,

I'd agree with the comments above that purchase cost is just a fraction of the total this decision will cost you. (Wikipedia definition of White Elephant sums it nicely!)

One cost I'd definitely factor in is the opportunity cost of using an inadequate solution. How much are you paying those reps of yours? How much revenue do they need to bring in for you to hit your growth goals? How much of an impact will your CRM decision-- positive or negative-- have on their effectiveness?

Framed this way, the conversation is about value more than cost. That doesn't make one pick or another a "lock," but it certainly suggests a closer look at Salesforce.com

Buy that and you're not just getting a CRM solution-- you're getting a platform with hundreds of developers creating business solutions.

Want up to the minute news on "trigger events" in target accounts? Want your reps to know exactly who's responding to your marketing, and be able to respond to them in real time? What about getting the deal signed-- wish that could happen with a few clicks of the mouse, and a lot less follow up and delay?

All of these are solutions that bolt right on to Salesforce, and empower your sales team to be the best at doing what you hired them to do-- bring in the revenue!

I don't work for Salesforce (though disclaimer-- we do have the highest-rated app on their platform) I'm writing this as a sales pro who's used many CRM tools in his career-- and a human who's made penny-wise-pound-foolish choices before too.

Good luck and good selling!

Joe

I would not hesitate to use something like Sugar ( a free version is offered online )
It's solid and you can't beat the price

In my view the question should be "Is it worth implementing CRM - free or not". Even with a solid business case underpinning CRM, the reality of doing it is often thwarted by an inability to get data in the right shape and in the right place quick enough for it to make the difference. If expectations are set low and achievements organic, then it's likely to achieve continued backing.

The payback from CRM can be significant; but so is the investment. One can't just buy CRM, it's a culmination of things that touch many parts of a business and these have to come together in ways that they probably never have. This can be very challenging operationally.

CRM done right is more effective and more efficient...but in my experience, going down the free route is only asking for more unnecessary trouble for reasons already stated, the mainstream vendors have at least addressed implementation issues and user group requirements to evolve their offering into something worthwhile in practice and I think this is what makes it worth the investment.

Dear Paul,

This is a really tough question that you're asking and I believe that -esp. with the info you're sharing with us- either approach has both advantages and caveats. Trying to "decode" your request, I see some key issues that I'd like to point out;

1. A very important piece of the jigsaw; which is the main "pain factor" you're trying to address? Sales automation is usually a safe bet. Yet, are there more? How about Marketing automation or customer care? And in which order would you place them?

2. When you discuss about "very tight budget", are you aware about SaaS models, or other special offerings like MS CRM Workgroup edition? (very attractive for 5 users)

3. If you're more concerned about implementation costs rather than licensing, then "commercial CRM" or "free CRM", doesn't make much difference. Actually, THIS is the place where "devil lives" in every CRM project; implementation costs can often be unpredictable and disproportionate to "expected" costs, or license costs - which usually are straightforward.

4. One more thing you should thoroughly discuss, is this magic word "automation features" in your requirements. When you choose a CRM system, typical sales & marketing entities and business process flows are there. So, someone might think that if you do some basic gap analysis and accordingly develop the missing entities (screens), basic functionality behind them and a bunch of views/reports - then you're done. Wrong! It's true automation features that will attract users to start using it; "when I choose this, then the system does 1,2,3,... for me" or (worse) "when I create/update a customer/quote/order/invoice/product/pricelist in my CRM, I want to see that happening in my accounting software as well - and vice versa". Automations, workflows, integrations to save double entries and errors, etc, can greatly differentiate CRM services cost.

5. There's a series of additional factors to consider that may jeopardize your project or budget, such as your infrastructure, the user readiness, and many more.

So, if I were you, I'd spend some of my (limited) dollars to a CRM consultant, to assess all the above and come back with a proposed approach and plan; otherwise, I'd start with Business Contact Management for MS-Outlook, which is free, you can set it up by yourself and it's simply a "richer Outlook"; you can easily share basic customer info with your team, whereas (in time) there's a clear migration path to Dynamics CRM.

I've seen several good answers Paul. CRM's were originally designed to support customer service and marketing programs. If you are looking for an efficient and productive way pursue companies or telephone prospect to keep pipelines filled, CRM's are usually counterproductive to efficiency.

I don't want to get into a sales mode here but we were accepted into the Salesforce.com partner program to help Salesforce customers turn their Salesforce instance into a more efficient tool to fill pipelines.

Without knowing totally what you are trying to accomplish I would not want to go further at this point but please visit our websites and watch the videos. If you want to learn a little more please feel free to contact me via email or phone.
Or you can copy and paste this link to watch our efficiency video.

http://www.learnklpz.com/coldcallingefficency.swf

www.contactscience.com
www.coldcalling101.com

Good luck,

Roger Hamilton
VP of Sales & Marketing
Contact Science
214-272-2285 Direct
rhamilton@klpz.com
My Linkedin Profile
http://www.linkedin.com/in/hamiltonroger

There are two ways of getting free CRM -- one is by basic CRM packages offered in SAAS model; and the other is open-source that you host on your servers. In the first situation, you typically do get what you pay for. while there are some decent systems out there, the completely free ones don't usually offer you a robust enough feature set to do everything you want, especially automation, dashboards, reporting, etc. Someone mentioned SugarCRM's community edition -- this is a VERY limited product so you need to know what exactly you want the system to do, and what the software offers in each version (and what limitations you'll run into).

For the latter, you're then dealing with costs such as infrastructure, servers, and IT expenses to maintain all of that. So while the use of the software may be free, there are other costs to consider. And everytime that free software comes out with a new version, you'll need to install that on your server and/or each user's machine.

Some things to think about.

Microsoft CRM is also xRM, where the x represents any kind of relationship management. So an investment in Microsoft's CRM could possibly serve many functions in an organization, not just customer relations. Because of this flexibility you can get a high return on the investment depending on your business processes. Also the learning curve for Microsoft CRM is less and I have found that most companies adopt it as part of their culture very rapidly. It simple to use with its integration into Microsoft Outlook, a common tool in most offices. With the small number of users that it sounds like you have, you should probably take a look at Microsoft CRM Online. This will possibly save you cost in infrastructure upgrades and it is also easy to budget for monthly and annually

It may be free to a point but then you will have to pay in one way or another. You can reduce your costs by going to a CRM that utilizes some of your existing software. SalesOutlook CRM reduces costs because it uses Microsoft Office and Exchange server as the basis for CRM. If you have Office and Exchange already in place then you should take a quick look http://www.salesoutlook.com

There are so many CRM applications that offer so much, people sometimes forget that a customer may just want something simple!

It is certainly worth looking at an entry level product, the most important consideration should still be 'what do we need it to do for us' and then perhaps the next consideration should be 'how easy will it be for us to move later on'. Some systems will not output data in a very palatable format if and when you decide to move to another system. Ideally, you could look at an application which can grow with you, so that your purchase is a long term investment, and functionality can be added as you require it.

There are some entry level systems which will do just this for you, we would be happy to make a few suggestions if you would be interested.

One suggestion would be that you plan out your CRM strategy first, including all the activities you would like to be able to undertake, and the perhaps we could help you to identify the easiest and most cost effective way to tackle them.

Katie Williams
www.e-vu.com
katie.williams@e-vu.com

Responses included here so far to your question Paul are really insightful particularly because, in my view and experience, overall they really do cover both the advantages and disadvantages not just about Free versus Paid but also about the pluses and minuses of actually using CRM itself as a tool. I am confident that we all will be most interested to learn about your final choice when you make it and why you made that choice.

Many of the replies in fact flesh out the points I made in my previous reply. For example, Alex Berry's "Even with a solid business case underpinning CRM, the reality of doing it is often thwarted by an inability to get data in the right shape and in the right place quick enough for it to make the difference." I would argue again that this comes back to not just how good the software itself is but how committed your staff is to using the software. He is further correct in asserting that "One can't just buy CRM". Effective use does come down to a culmination of many things and it is challenging operationally.

Barry Steele's 5 points "of far more importance" also effectively summarily characterize the issues and Myron Flouris also adds another 5 points well worth considering amongst the many other valuable contributions the other responders have made.

My interest in this topic? I have no investment here one way or the other, I simply have a passion for building business. I was certified in PeopleSoft and managed the introduction of some HR extensions to their base program before they got swallowed by Oracle. I have worked, as a business development consultant, with clients who have used Microsoft CRM, who have used Upshot (now also lost in Oracle as Siebel CRM OnDemand) and who have looked at some other options including SalesForce. My company also has helped extend functionality of built-in CRM capability of the client's existing ERP system but, perhaps most importantly, I have also, in the course of my career, had p/l responsibility for building business, experience that has included starting out even with in-person cold-calling. From all of this background I stand by my previous closing observation: "It (all) starts with having competent sales people and is complimented by providing them with data resources that they recognize as supportive of their efforts to win sales. If they do not believe in it, they will not use it and you will be the poorer for that." Have you discussed any of this with your own team yet?

If the free tools can give you what your business needs-- and no compromises--then it is practical to grab one. But if getting the free tools will eat up your resources because your people tend to spend more time on figuring out how to use it, then go for the paid one that is a breeze to use. Sometimes we don't realize that the amount of time wasted is wasted resources, therefore wasted money. There are of course many affordable web crms out there, one is www.worketc.com.

Really a great questions!

The entire area of free open source software (FOSS) can be very confusing. For CRM, in particular, it's worth analyzing the software license cost relative to overall spend for the system.

Most likely, the overall costs will include:
-- software license
-- implementation and deployment
-- hardware
-- training and other change management
-- maintenance, support, and other ongoing costs

Out of this mix, only the license and maintenance fees are reduced by free software. However, a commercial vendor may bundle some support, whereas a free solution will require pay as you go support entirely.

Bottom line: Buy the software that best fits your needs and don't worry about the "free" label. When running a business, there is no free lunch and usually (although not always) you do get what you pay for.

If a free solution best meets your needs, then be sure to plan and budget for paid, commercial support. Although free, community-based support can be great, it's not a substituted for paid commercial support on critical systems.

To start-You can think of open source "SugarCRM"..better than nothing in place. Almost required Sales basic information flow is there.

My answer to you is yes - especially if you consider the SaaS fermium market. The reason why SaaS can be delivered free is because the 'free marketing hook' lowers the cost of customer acquisition (i.e. people are likely to register and get hooked on using the paid service.) Having a SaaS CRM also frees you up from the technical difficulties of implementation, security and always-on availability. It also lowers your "investment" because most systems are ready to go in minutes.

Of course there's a catch that eventually you'll have to pay for the CRM - either when you get more user seats or added functionality. But thats a good problem to have because it means your CRM is working in your business model. So do your homework and look at the SaaS based CRMs.

No CRM (or other similar project) is free. The costs can be broken down into
- licence costs;
- costs of external consultants used to ensure tha the implementation works for you;
- costs of internal people whose expert knowledge of the business is required to make the project a success;
- costs of additional hardware required to ensure that the new software runs appropriately - this may be server or user or network related;
- costs of time required by users to be trained and to then learn and use the new solution appropriately.

Depending on the solution that you select and your current situation some of these may be little or nothing, but the two internal costs will never be nothing. However, if the saving in one area is outweighed by increased costs in another, is there really a saving?

It is also extremely unusual for an organisation to have on staff people who are able to do this sort of implementation and to continue to do their regular job, hence it is rare that implementations done entirely internally are successful.

They key to a succesful implementation is to fully understand your requirements and to ensure that there is support for the project from the top down including ensuring that all users (both at the information entry level and at the information using level) are appropriately trained. This is where external consultants - such as Opsis - should offer immense value as they bring to you experience of many other projects.

In our case, the CRM progression was based on our desire to succeed at corporate adoption and ease of use. Free or Paid, that was low on the list of issues we considered. That said, we started with Microsoft CRM, which was easy to adopt and use, but only did about 50% of what needed, then we moved to the SugarCRM Professional (Paid) which worked great for us and we are now moving to SugarCRM Community Edition (Free) because the Paid version is not adding any value over the Free version.

Moving from MSFT to SugarCRM was a smaller adjustment than we thought it would be, but well worth it as now we realizing more value with a better fitting application. The move from Paid to Free SugarCRM was a minor step and will incrementally add more value as we accelerate the number of users on the system, putting those licensing dollars to work customizing the system to our specific needs, further enhancing its value, something the manufacturer would not be likely to do.

So we whet from very expensive Paid, to less expensive Paid, to Free Licensing.

We are grateful that we are one of the success stories of CRM implementation and hope our comments help others on their path to CRM success.

How ironic is it that Inc Magazine has just published "How to Choose CRM Software" http://www.inc.com/guides/2010/07/how-to-choose-crm-software.html

I'm not sure why Simon Gantley has not responded here but he has just posted a response to the INC article on the Inc article site pointing to another older thread about CRM here in Focus.com. Well worth reading.

Quote from Simon's post:
"Great article, but it could use some material on two critical topics: (1) How to ensure that the CRM system will actually address your business processes and (2) How to avoid getting ripped off by the vendor. These topics are address in depth in the following paper:" http://www.focus.com/ugr/research/crm/how-pick-right-crm-helpdesk-bpm-vendor/

EnterpriseWizard is free for the first 10 users (5 staff + 5 end users) and it is not an unproven product. In fact, it is displaced MS CRM at some customers. See http://www.enterprisewizard.com/hot-topic-media-case-study.pdf

Many great points raised in most of the answers already submitted. I would emphasize the importance of what you want to achieve with your system. You mention "automation features." What might those be? Ticklers? Reminders to do something at a certain time? Tracking of pipeline metrics? Value of deals forecasted to close in the next 30 days? Thoughts on that?

I do disagree with the poor opinions of free systems. Go back 15 years. To buy Microsoft Excel cost nearly $400. To buy MS Word, the same. PowerPoint cost a bit more, I seem to recall. Basically, the entire suite would cost a single user in the region of $1500. Today, you can get arguably far better versions of all those products for less than $200. And there are even cloud-based versions that, for small businesses, can be accessed for $6/user/month and that includes additional functionality such as Sharepoint. So, if you are in a growth mode and tight on cash, a free version of a CRM application might be completely acceptable and will probably give you at least most of what you need.

Keep in mind that research regularly reports that the average user makes good use of no more than 10% of their software.

Two things to keep in mind: Whatever decision you make, be aware that upgrading to a different system can be a painful experience. Migrating not just names and addresses, but calendar information, notes, descriptions, and custom reports, can be a real headache. I have seen instances where a couple of interns were brought in to manually retype all content in to the new system. So if you are expecting to grow anytime soon, keep that in mind. Also, if you do select a free system, can it be upgraded for a fee? That would be a far simpler way to pay as you grow.

Second thing. Will your sales team really use the system effectively? Sales people generally dislike having to do anything involving reporting or sharing of information. They consider it a waste of valuable phone or selling time. The more bells and whistles that you pay for, the more expectation there will be that your sales team will use them all. They will not. Sales people dislike being monitored. But if there is something in the system that is valuable to them, they will be more willing to spend time with it. Many smaller companies make do with their mail and calendaring programs (Outlook for example) until they feel that they cannot live without a CRM system.

Check out www.Zoho.com. This is a good example of a cloud-based CRM, multi-purpose, well managed system, with integration in to complimentary systems such as Google Apps, and a pay as you grow upgrade path that throws in 3 free CRM users to get you started.

Good luck.

"One shoe fits all" is not applicable here. I have been in sales and marketing in a number of industries and the needs are so diverse.

The biggest gap for a CRM tool, free or not, is its ability to deliver a robust set of requirements, unique to that industry.

I've seen a host of proprietary CRMs developed "in-house" and none of them have come close to meeting the needs of sales and marketing.

My most recent experience combined the skill and market savvy of Bulldog Solutions, Eloqua, and Salesforce resulting in a shorter sales cycle, increased revenue, all for a reasonable price tag.

So to Paul McDonald's point, does anyone really need an free CRM? Yes, I believe that new or start-up businesses have a requirement for prospecting, and the subsequent client management that accompanies most business models.

Therefore, if anyone fielded such a "free" CRM, they could follow up with "add-ons", "upgrades, "revisions", and "bolt-ons" to add a revenue stream; or they could add value through other products and services as a revenue stream; or finally, they could utilize paid advertising, depending on industry to add a revenue stream.

Hi,

You still need to maintain the free CRM system. Especially, maintaining mail server will not be easy and will be costly. You still need to pay for hosting although the software is free. Eventually, what you are paying is the services that the system offer (maintenance, hosting, upgrades, etc.)

Borneosoft Free Edition is for two users with 100MB each. It is hosted solution with mail server integrated with the rest of the application.

It can generate quotation automatically for you and it has many more time saving tools. It has contact, calendar and sales management. Blog is part of the offering.

Check out at: http://www.borneosoft.com

Free never seems to have any value. Whether it is due to lack of commitment or perceived value - the free projects never seem to have the drive and commitment needed for success.

The most valuable asset I bring to the table is the experience of over a hundred projects. Some great, some bad and some ugly. Why not leverage your success from our experience? Another perspective may assist in helping you gain the most from your own CRM project.

Try LeadMaster. It's not free but like you said, you get what you pay for.

Hello,

only to start the discussion -

Reason #1) free packages can not get enough support from professionals to get developed over long time period, so they deteriorate in the pace with the paid competition
Reason #2) the license cost is only small fraction in total cost of ownership, so it does not make any difference, if it is free or not (unless it costs furtune)

all companies which started with free option migrated in one year to paid package, loosing one year of benefits, one year of hard work implementing it...

There is no free lunch...

BR, Jan