Learn how small-business software buyers are budgeting for software purchases in 2019.
In the world of startups and small businesses, knowing how to bootstrap and budget can make or break a company. When to invest and how much to spend are recurring questions for everything from hiring new staff to expanding office space.
Another big “spend or save” question relates to software.
Businesses inevitably reach a point when they’d be better with software than they are without, but knowing exactly when to make that investment to see the best ROI on software can be a challenge for small businesses. If it’s too soon, they’ll feel like they’re not getting enough out of the product and could abandon adoption altogether.
We recently surveyed 420 small and midsize business (SMB) software buyers to get a sense of their software buying behavior. According to our research, the ROI of a new software purchase is a top concern for 40% of businesses.
The intricacies of pricing plans and the often difficult task of linking an investment to actual results can be overwhelming. This is especially true for sales teams that have fluctuating seasons, sales cycles, and staffing considerations.
To take some of the guesswork out of investing in CRM software, budgeting will become your best friend.
Sales teams that set a budget before they start shopping for software will spend less than they budgeted for and see a higher ROI on their CRM software purchase than those that go into the process without a budget in mind.
Below, we’ll look at how software buyers budgeted for their purchases and what you can learn from their process to maximize the ROI on your CRM software purchase.
3 key findings from Capterra’s survey on small-business software purchases
1. 80% of tech buyers set a budget before selecting software
Small and midsize businesses are planners. According to our research, they’re taking the time to budget for software purchases either before they start their software hunt or during the evaluation stage.
SMBs are going into it knowing how much they want to spend: They’re assessing different solutions, comparing price points, and gathering enough information to set a reasonable budget.
This includes some of the often forgotten considerations of software budgeting: training, implementation, and support. These factor into how much time your sales reps spend away from the sales floor, which could mean less money coming in.
To get the maximum ROI on your CRM software purchase, ask yourself: How much will training, implementation, and support cost?
Calculate the downtime for training sales reps on how to use a CRM, as well as how much time it will take for implementation. And don’t forget about customer support from the software vendor; you often have to pay extra for additional support hours and channels. Consider how much access you’ll need to the support department, especially if it’s your team’s first time using a CRM.
2. More than 85% of software purchases are within budget
Small and midsize businesses are sticking to their budgets. Our survey results show that the majority of businesses came well within their budget for items such as features, training, and customer support costs.
Does this mean that SMBs are over-budgeting for software? Maybe. But erring on the side of caution means planning for unexpected costs that invariably pop up. Coming in under budget is always more satisfying (and less stressful) than going over budget.
Planning a budget for your CRM means not only looking at your team’s current state, but considering what your sales team will look like in the future.
To get the maximum ROI on your CRM software purchase, ask yourself: What does our year look like?
A lot of pricing plans are on a per user, per month basis. Calculate how many reps you have now, as well as any reps you’re planning to add throughout the year. This will be the basis of your monthly spend for CRM software. It might make sense to splurge on a slightly more expensive pricing plan with more seats. Kind of like buying in bulk, it could save you money in the long run if you’re planning to grow your team.
3. Budgeting for extra features before evaluation will keep you under budget
Small and midsize businesses are prioritizing the necessities. They’re giving themselves wiggle room for extra features, but by planning for them before looking at software, they’re actually coming in more under budget on extra features than on any other aspect they’ve budgeted for.
Allowing yourself the possibility for extra features that you didn’t plan for is important, especially if you’re not overly familiar with the software category. Aside from the critical features, there are additional features that could specifically benefit your sales team’s processes and workflows.
To get the maximum ROI on your CRM software purchase, ask yourself: Which features are critical?
Almost every CRM tool will have core features such as contact management and interaction tracking. It’s the additional features such as email integration, document management, and mobile access that set one solution apart from the next. Define what these “must-have” and “nice-to-have” features are for your team and choose a solution that fits this criteria.
Maximize the ROI of your software purchase
Finding that sweet spot of when it’s time to make a software investment means weighing the pros and cons of adoption.
If your sales team is small and you’re managing to stay on top of your customer load and manage your contacts without issue, then you’re probably safe to stick with your current methods of customer management for the time being.
Once your team starts growing, deals are falling through the cracks, or you’re struggling to keep track of which sales reps have been in touch with which customers, you likely need to upgrade your current customer relationship management methods.
If you answer yes to at least two of the questions below, it’s time to invest in a CRM.
Answered “yes” to these questions and want to start budgeting for CRM software?
Information on Capterra’s “Small-Business Software Buying Trends” survey
Capterra conducted this survey in July and August 2018 among 420 SMBs based in the U.S., Germany, and France. Respondents were screened for company size and revenue to qualify as SMBs. Qualified respondents were decision-makers or had significant influence on decisions related to purchasing technologies for their organization. They were required to have purchased at least one piece of software valued at $5,000 or more within the past 12 months.
Looking for Customer Relationship Management software? Check out Capterra's list of the best Customer Relationship Management software solutions.