There are a number of technology categories for which the highest priced solution is not necessarily the highest value solution.  This can be the case with emerging technologies in which the dominant marketer is also the early market leader.

The main components of CRM value are increased revenue from more sales and higher customer retention — and decreased costs from greater operational efficiencies.

CRM Value to Price Relationship

There’s a high correlation between CRM price and CRM value.  Higher priced solutions generally represent commensurately higher value and lower priced solutions generally represent correspondingly lower value.  What are the reasons for this predictable relationship?

First, the CRM market is mature.  In mature markets, it’s difficult to get away with charging the most amount of money for a solution that does not provide the greatest overall value.

Second, CRM is not something that companies have to invest in in order to run a business.  Almost companies have to buy computers.  Almost all companies have to invest in an email service.  Companies only invest in a CRM solution is when they perceive that the CRM value provided to their organization exceeds the cost of a CRM subscription (or license fees) plus consulting services.

If you’re selling something that companies don’t have to buy and your price is the highest among all your competitors, your product better have the greatest business value.

Missing CRM Value in Cheap Solutions

If a given CRM solution is half the price of its most expensive competitor, there’s probably a reason for it.  It might have feature limitations. It might run slowly. It might have an inferior API. It might be behind the curve on incorporating the latest technologies. It may not have fully redundant data centers.  There may be any number of factors that reduce the solution’s ultimate value.

Unless your requirements are very basic, the least expensive CRM solution will likely also provide your company with the least CRM value.