The Simple Guide to Understanding CRM Pricing Models

Customer relationship management (CRM) software gives your business features for organizing contact information and communicating with customers to enhance your sales productivity. Since CRM pricing models can be complex, we break it down by explaining the various CRM price structures so you can find the one that provides the most value for your business.

The CRM market is heavily saturated with both general CRM solutions and industry-specific CRMs. Providers differentiate themselves by going beyond usability and features, including CRM pricing and the total price value for the features provided.

Types of Pricing Models

A CRM pricing model refers to the way an organization’s cost of using a CRM is structured. Though there are multiple types of CRM pricing models, it’s important to note that most CRMs use multiple pricing models in conjunction.

Below are some common examples of CRM pricing models:

Per User Pricing

One of the most commonly used pricing models for CRMs, per-user pricing involves setting a price based on the number of individual users, aka “seats,” that will use the platform. The per-user price is set by the CRM provider (typically on a monthly basis). When your business subscribes to the CRM, you determine how many seats you need to begin with, and then add and pay for more users as needed.

To calculate your per-user price, take the price per user presented by the CRM provider and multiply it by the number of people in your business who will be users. For example, if the price of the plan is $22 per user, per month, and you have 10 employees who need to use the platform, your total cost per month will be $220.

A good CRM provider example that uses the per-user pricing model is Zoho CRM. They offer four subscription package options, each priced per user depending on the features desired by the business.

Zoho CRM pricing model

Flat-fee Pricing

Flat-fee pricing is a CRM pricing model where your business pays a predetermined flat fee (either monthly or annually), regardless of the number of users or features utilized. A common practice for this CRM pricing model is capping the number of users that can be on your plan or only offering advanced features in higher-priced tiers.

To calculate your cost using the flat-fee CRM pricing model, take the price (per month or per year) presented by the CRM provider, and add setup fees (if any). For example, if a CRM software provider states that their price is $150 per month for up to 12 users with no setup fee, your business will pay $150 per month, and up to 12 of your employees can use the platform. If you need to add more users, you will need to move up to a higher-priced plan.

A popular CRM provider that uses a flat fee structure is HubSpot CRM. Rather than charge per user, they charge a set monthly fee with a minimum and maximum number of required users for the various subscription plans.

HubSpot CRM pricing plans

Tiered Pricing

Tiered pricing is used in conjunction with per-user and flat-fee CRM pricing models. It is the practice of using multiple subscription options that vary in price depending on the features available on the plan and the number of users. Many CRMs use variations of Basic, Premium, and Enterprise plans depending on the needs of your business.

When calculating tiered pricing for a per-user model, select the plan you desire based on its included features. Then multiply the plan’s price (per month or annual) by the number of users.

For example, a CRM provider has a Basic plan for $15 per user, per month, a Premium plan with additional tools for $30 per user, per month, and an Enterprise plan with more advanced features for $50 per user, per month. If your business wants everything included in the Premium plan and needs eight seats, your total price will be $240 per month.

For calculating a tiered-based price on a flat fee model, select your desired plan and ensure it can sustain the number of users in your organization who will need access.

For example, imagine a CRM that offers three subscription tiers:

• The Basic plan for $50 per month with up to five users
• The Premium plan for $80 per month with up to 12 users
• The Enterprise plan for $200 per month with an unlimited number of users

You determine your business only needs a few tools for your operation and subscribe to the Basic plan. It will cost $50 per month and you can have up to five users on it. When you need another seat, you’ll be required to upgrade to the Premium plan.

Salesforce is an excellent example of a CRM that uses tiered pricing (combined with per-user pricing) with a wide cost and feature range. The lowest-tiered plan offers business basic CRM functionality for organizing and communicating with customers, while the highest-tiered plan extends to mass customization and robust automation features.

Salesforce Sales Cloud pricing model

Free Subscription Pricing

Some CRM providers offer a free-forever plan as their lowest-level tier. Most of the time, these plans cap the number of users who can be subscribed and many limit the number of included features. The idea is that as your business scales and needs more user spots or additional features, you will upgrade to the other plans offered by the CRM provider.

Freshsales is an example of a provider that offers a free-forever plan users can access for contact organization, account management, and built-in communication channels including chat, email, and phone. As a business needs more functionality and scalability, they have the option to upgrade to the paid plans.

Freshsales pricing model

Modular Usage Pricing

Modular usage pricing is when a CRM charges you for what you use. This could refer to features, data, or something specific like the number of emails sent. Some CRMs offer supplemental tools and native software applications that can be purchased in addition to your primary CRM plan.

For example, Pipedrive is a popular CRM platform that uses a tiered, per-user CRM pricing model. In addition, it also has optional, supplemental tools that businesses can purchase on a monthly basis. This includes LeadBooster for auto-generating leads and a Web Visitors add-on for providing insight on traffic to a firm’s website.

Pipedrive add-on features

Modular usage pricing is less simple than calculating a basic per-user price. To determine your cost with a modular usage pricing model, your business needs to take into account the primary CRM subscription (per user, flat fee, tiered, free, and so forth) in addition to any supplemental purchases or usage costs.

For example, let’s say a CRM has one flat fee subscription option for $140 per month. On top of that, there is a $10 charge for every 100 outgoing calls made through the platform and a native project management software that integrates with the CRM system for $50 per month. Your business subscribes to the CRM, purchases the project management software, and makes an average of 400 calls a month, so your total monthly costs are $230 per month.

Typical Pricing of CRMs

When analyzed on a per-user basis, the answer to how much a CRM costs can be anywhere from $12 to $300 per user, per month. This wide range of potential pricing has to do with a few factors.

The first factor is that most CRM products use a tiered pricing structure, which naturally creates a range in pricing. Another is that each CRM offers unique features within their platform, some of which are built in and others are optional add-ons, which can create an even wider disparity.

The last factor has to do with why CRM pricing can get expensive. Most CRMs, especially industry-specific ones, offer features that apply to more than sales and marketing functions. These include things such as project management, accounting, human resources, and even content management tools offered either as built-in features or third-party integrations.

Built-in options and integrations like these enable you to manage nearly all functions of your business in one centralized platform, offering better overall product value but higher CRM costs. Additionally, higher costs may be attached to the advanced features or artificial intelligence (AI) tools within a CRM that allow your business to automate processes and functions.

Below we compare CRM pricing of some of the most popular CRM software.

*All prices are based on annual billing. Month-to-month billing for some products is available for a higher price, and biannual billing is available for some products at a lower price. Most of the free plans and paid tiered plans have caps on the number of users.

Bottom Line

CRM pricing varies widely both in terms of pricing models and total cost. For your business to fully compare CRM software pricing when deciding which is best for your business, examine the primary cost of the per-user or flat fee plan in addition to the costs associated with modular usage pricing for add-ons or usage-based rates.

Furthermore, while free or low-cost subscription plans look great on the surface, your business may be heavily restricted on the number of users that can subscribe as well as the features available in your plan. You may end up spending more on modular usage costs that could be prevented by purchasing a higher-tiered plan. Conduct a thorough assessment of your needs to choose the right CRM for your business, rather than choosing the least expensive option.