Are You Price Sensitive or Value Sensitive?

Makes No CentsWhile the economy limps along the computer software industry is doing fairly well perhaps due to the continued growth of software as a service.  Software as a service (SaaS) allows businesses to begin utilizing a variety of software applications quickly and efficiently.  With software as a service there is no hardware to purchase or software to implement.  Both hardware and software is provided, managed and maintained by a third party solution provider.

This new approach to licensing and delivering software as a service offers several immediate benefits to customers.

  • Software as a service implementations can often be operational within a few hours.
  • There is no large cash outlay to purchase hardware and software.
  • There are no IT infrastructure or resource requirements. Both hardware and software are maintained by the service provider.
  • Your organization can spend more time on managing and growing your business.
  • You are not locked into one solution. Most companies only ask for an annual contract.

One software segment that has seen a significant rise in software as a service is Customer Relationship Management software (CRM).  CRM software helps businesses manage their relationship with their customers by automating the internal business processes that impact sales and customer service. The explosive growth of this sector has encouraged dozens of companies to enter this space with product offerings ranging from free to more than $200 dollars per user per month.

There are a plethora of solutions to choose from depending on your functional requirements and whether you are price sensitive or value sensitive.  The reason I use these terms is because I have seen many companies look for a CRM solution based solely on price. If there is a free solution, great! They will start with that and see how they do.

Value sensitive shoppers are first and foremost looking to solve a business requirement and will focus their energy on selecting a few products that address their needs.  They will then compare pricing with the objective to get the best deal for a product that they are confident will solve their problem.  These companies are smart to do this and here’s why.  The CRM software sector is so competitive that the difference between a free or very low cost solution can be just a few dollars more per month.  Is it worth trying a free CRM that you will most likely end up throwing out six months down the road, or one that will actually address your business requirements? Value sensitive companies are finding and selecting these CRM solutions and you can too as long as you place value in front of price.

Image “Makes No Cents” by jDevaun on Flickr under Creative Commons license.

3 thoughts on “Are You Price Sensitive or Value Sensitive?

  1. The CRM sector is confusing but I guess the message here is you get what you pay for and don’t be foolish enough to think you are going to address your business requirements with a free CRM system. Isn’t this obvious?

  2. Good article. I am in the CRM sector and there are just so many bargain hunters that place cost ahead of quality. It’s almost as if some companies don’t even care if they get value from the CRM solution they select. As long as its cheap then fine.

  3. Yes, but this is true of mostly small businesses that have no real business requirements so they see no reason to pay for software. They try the free ones and if it provides some value great if not well it did not cost anything. Companies trying to address a real business requirement don’t select free or low cost solutions.

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