SPECIAL REPORT: Costs: Campaign Engines

The Little Engines That Do

Costs for CRM campaign engines have remained stable

Do today’s CRM campaign engines really offer more bang for the buck than the shoebox in which early-day marketers kept their customer names? The cost of that system was $15, and included a new pair of Buster Browns.

Unfortunately, the demands of modern business have stretched beyond what one shoebox can handle. Today’s CRM engines include functions like appointment coordination, telemarketing support, mobile staff support, data mining and tailored business information summaries. And they cost more than $15.

But companies are willing to pay for it. The Aberdeen Group, a computer and communications market research organization based in Boston, estimates that sales of software packages, software-vendor licenses, integration services, peripherals and hardware totaled $7.8 billion in 1999. CRM software alone made up just under half of that.

At the time, Framingham, MA-based IDC’s Technology Integration Panel Study found that just over 22% of North American companies had implemented some form of CRM technology, and another 21% are in the process of doing so.

But what should a marketer expect to spend for a campaign engine? According to the U.K.’s Hewson Consulting Group, the cost of both software and configuration are dropping for all but the highest-end packages. And they will drop even further as engines add functionality, reducing the need for expensive programmers to link them with other functions.

At the most basic level, programs that record customer accounts and perform basic tasks can be purchased off the shelf for under $1,000 — and in some cases, much less than that.

Information Systems Marketing (ISM), a Bethesda, MD-based consultancy, evaluated 30 CRM software packages. Using a hypothetical scenario of a five-user system (CRM systems are often priced on a per-user basis), it found that among the top 15 programs, one-quarter of all setups would cost a marketer more than $20,000. Another third could be implemented for between $10,000-$20,000, and the rest come in at under $10,000, ISM said in a paper titled, “The Vendor Guide to Customer Relationship Management.”

But this was only for the top programs in terms of scope, depth and strength of functionality. For the next tier, the 15 other programs ISM evaluated had different price points. For the same five-user scenario, most (83%) cost between $10,000-$20,000, with all of the rest falling under $10,000.

On a user-by-user basis, starting prices ranged from $475 to, on average, $2,000. One vendor dispensed with a flat fee, instead charging a $29.95 per user/month charge, while another listed per-seat implementation costs that ranged from $1,200 to $5,600 based on modules and degree of functionality.

What about training costs? ISM estimates that over a five-year period, they can be as high as $1.50 for every dollar spent purchasing an engine. But there is no agreement within the industry on this: According to other estimates, training and implementation costs can add anywhere from three to 15 times the amount initially spent on engines.