If there's one thing that characterizes a recession when it comes to CRM or enterprise applications desirability, its the pricing. Pricing schemes are a big deal for potential customers. Especially in an economic downturn where:
- Keeping the customer matters and CRM seems to be the way to go when retention is the strategy
- Controlling cost is more important than ever before.
- Simplification of options, not complication is the goal when other things are on the minds of business - especially small business.
- Price is a huge differentiator for the vendors.
For example, almost two years ago, Microsoft announced that they were going to provide their software + services Dynamics CRM Pro Live version for $59.95/mo all inclusive - well under the $125.00 month that the equivalent salesforce offering was at the time. This created major buzz.
But that wasn't the end of Microsoft continuing to innovate on price. This morning they announced their Microsoft Dynamics Business Ready Flexible Pay Program, which allows customers to pay for Dynamics ERP or CRM over three years. They've also got another program they've just added that takes a page from the NetSuite book.
Starting in May, they are allowing a specific group of partners to provide a 50 percent license discount on MS Dynamics ERP and will also provide these customers with a rebate equal to 25 percent of the suggested retail price of the Microsoft Dynamics solution (up to a maximum of $25,000).
The catch? The same way that NetSuite created BusinessbyNetSuite in February to lure SAP customers to them with a highly competitive offering or the same with Sage customers with Sage Switch in March.
Microsoft is offering their rebate to help offset the costs of switching from Sage MAS 90 or MAS 200, or Oracle's JD Edwards EnterpriseOne customers who use Sage MAS 90 or MAS 200 or to JD Edwards (Oracle) EnterpriseOne customers. Only.
While I'm never a huge fan of trying to steal other company's customers, I certainly see the justification for Microsoft making the attempt as does NetSuite. The companies they are targeting have holes in their strategy or are deemed particularly vulnerable when it comes to pricing so, in vendor-logic, the only response you could have is, then, why not go after that base.
SugarCRM Tops 'Em All
But the best move when it comes to pricing is SugarCRM's - also released in the last couple of days. They have done what has to be done in a recession. Simplify and reduce. Simplify and reduce. Simplify and reduce. To begin with, they've released a new package - SugarExpress that is squarely aimed at the smallest small businesses. For $499.00 a year for 1-5 users and $799.00 a year for 6-10 users, you not only get access to SugarCRM functionality but also to their platform and tools like Module Builder. The caveat with SugarExpress is that you have no leeway beyond 10 users to use it. They cap it at 10 users, period. If you're bigger than that, you can buy their revamped Professional and Enterprise editions which are offered for the same price both on premise and on demand. The Enterprise edition pricing includes unlimited access to all their tools, customer support etc. OK. OK. I know you want to know what the prices are. They are amazing. For the Professional version - both on premise and on demand - $30 per month per user. For the Enterprise version - both on premise and on demand - $50 per month per user. For this price you get the cloud connectors which, among other things, can tie your applications into Hoovers, Jigsaw, and other data sources. But that's just one of the multiple tools that you get along with the package. All in all, this is a very good move by SugarCRM. It recognizes two things that carry some weight in a downturn. A comfortable price and a simple plan. Both of which are necessary now - especially in the small business market that SugarCRM targeted. All in all, creative financing and pricing seems to actually be on the agenda of several of the CRM vendors. That recognition, despite the disparities of the programs, is a refreshing change. Microsoft and NetSuite are making some smart moves - but SugarCRM nailed it. UPDATE: For a great post on the details of the SugarCRM price changes, see fellow ZDNET blogger Dennis Howlett's post on it at this link.
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