Thursday, October 23, 2008

Will SaaS Price War Color CRM Comparisons?

In my last post, I wrote about some potential CRM software buyers looking for bargains. According to the technology press, the economic changes over the past few months might make it even cheaper for new clients of hosted CRM platforms.

For instance, one report suggests that NetSuite is making a play for Salesforce customers by extending discounts of up to 50% for new customers of its hosted CRM system. It seems like Microsoft is taking the same tactic. Even some open source CRM software vendors are getting in on this action.

Meanwhile, the folks at Salesforce are eager to mention that customers should be nervous about companies that are willing to slash their prices so drastically. One writer notes that they're "not about to run a closeout sale," but that they're responding to the threats with some aggressive pricing of their own.

If there's a price war on CRM applications, that's a good thing for companies, right?

Maybe not.

For prospective buyers of CRM software, this is a great quarter to lock in a deal on an upgrade or a new implementation that you've already been planning. If, however, you're thinking about jumping ship from one provider to another just based on a special pricing deal, remember to factor in the opportunity costs of making the switch:

  • Training staff on the new system.
  • Transferring customer records between CRM applications.
  • Updating web lead forms and other intake procedures.

If pricing incentives for hosted CRM tools can still save your company money over the next 2-3 years, then making the switch can be worth it. Otherwise, it might be a good time to talk to your account representative about new features or incentives that can make your decision to stay even easier.

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