Four Types of CRM Services Estimates

Four Types of CRM Services EstimatesWhile the prices of CRM licenses are generally well-defined, the cost of CRM consulting services are anything but predictable.

The CRM services estimate numbers given by service providers can vary significantly based on timing, competition, location and other factors.

1. The Ballpark Estimate

A ballpark estimate, or a preliminary estimate, is one that’s provided in the face of limited information about a company’s overall requirements. This can be stated as a range, such as “fifteen to twenty days”. A ballpark estimate can also be stated as an approximate per user amount, such as “about $1,000 per user”.

2. The Conservative Estimate

A conservative estimate for CRM services is one for which there is a high probability that the actual amount billed will be below the estimated amount. While a conservative estimate can be a very high sounding number, the benefit to this type of estimate is that the chances of an upside surprise is low.

3. The Lowball Estimate

This is an estimate that is given by a consulting services company in order to get their foot in the door — even when the actual services pricing will likely be higher. Lowball estimates are generally given in an effort to beat out the competition or to speed up the decision making process.

4. The Educated Estimate

If detailed requirements have been defined, an estimate can be provided that’s based on examining each requirement and assigning the expected level of effort that will be needed to meet that requirement based on past comparable deliverables.

Other Forms of CRM Services Pricing

Fixed Price

A fixed price, as it’s name implies, is a commitment to a set of deliverables for a precise dollar amount. A fixed price requires a lot of “no’s” from the services company, as conceding to out of scope deliverables represents pure cost to the services company.

With many variables in CRM implementations, fixed price bids are normally riskier to the the service provider than the CRM customer — which is why many service providers will not give fixed bids.

Value Pricing

For some forms of consulting, firms price their services according to the external value created —- as perceived and determined by the client -— rather than internal costs incurred in generating those services. Value pricing is not very common among CRM services providers, as it’s often difficult to assign a dollar value to the many improvements made from implementing a CRM system.

In general, the greater the detail of requirements, the more educated the CRM services estimate will be.

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