$399 per user – Is it really worth it?

Note: This post was originally published on June 3, 2013 by Peter Hanustiak.

Maybe you are asking yourself the same question. Is it really worth paying $399 for a mobile application when a vast majority of the apps available on the App stores are either free or they cost just $0.99?
Let’s discuss this

From an economic perspective…

You are making all your investments in order to increase your revenue. If you know today that $1 invested will bring you $2 over time then you should definitely make the investment. If you knew that $1 invested will bring you less than $1 then you obviously shouldn’t invest.
Now let’s add Mobile CRM into the equation.
Mobile CRM is being used most frequently by the sales reps who are typically the people that bring the most revenue to the company. Thus, they tend to be well paid. The average salary of a sales representative is $56,000 according to Indeed.com. However, to fully calculate the cost of each sales rep, you need to count also the cost of the office space, car, gas, phone, phone bills, restaurants, airplane tickets, hotels and other costs associated with the job of an average sales rep. Just for now, let’s calculate with total costs of just $60,000 for each sales rep per year.
Resco Mobile CRM application costs $399, which translates into 0.65% of costs for each sales rep. And this additional cost is for the first year. For the following years, the maintenance fee for Mobile CRM is $80 meaning the cost for each sales rep is increased only by 0.13%.

We know the costs and here comes the harder part

We need to estimate the increased productivity of sales reps that use Mobile CRM app. According to Nucleus Research findings, adding social and mobile access capabilities to CRM increases the productivity of sales reps by 26.4%. (According to some responses we got from our customers, each of their sales reps saves at least an hour daily – that is an efficiency increase of 14,28%.)
We can certainly argue about these numbers. It can be lower, let’s say 12% or even 10%. It can be also higher. But by no means are we getting close to 0.5% or 0.1%.

To sum it up

While Mobile CRM app will increase your cost for each sales rep by 0.5% for the first year and 0.1% for following years, the boost of their productivity is multiplied many times over.
If you do not think that mobility will increase the productivity of your sales reps by more than 0.5% then you should not be considering Mobile CRM at all. You have to understand that Mobile CRM app is neither a funny widget nor a toy. It is a complex tool that the most important employees in your company, the sales reps, will use on a daily basis. They will use Mobile CRM to create new contacts in your database, to edit opportunities after their meetings, to schedule their appointments, to assign tasks to other sales reps within their team, to track the progress of the deals and to make sure that customer is getting what he really wants. And that is CRM all about. CRM is not about keeping your data in the office, you can use PCs for that. The business today is done during personal meetings.
Mobility is nowadays simply inevitable.
PS: Mobile CRM is used very frequently also by field service technicians. I used sales reps just as an example – I didn’t want to make the article too complicated.

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