Guide to UK CRM software
CRM software provides not only a centralised database for all of your business’s customer data but also a wide range of features and functionality to help your business manage, analyse and use that data to increase customer satisfaction, gain new customers and improve your business’s profitability. This guide provides an overview of the CRM software available in the UK market, compares the benefits of those software options and aims to help you select the best solution for your business.
At the core of all CRM systems is the software running a centralised database of a business’s customer data. However, CRM systems are much more than digital Rolodex’s. They provide a range of features and functionality to help businesses and their employees automate sales, marketing and customer service tasks, collaborate to improve products and customer service, and analyse customer data to create insights to aid strategic and operational decision making.
CRM software has traditionally been used by larger businesses which can afford to install and run it on their internal IT networks. However, with the expansion of broadband connectivity and the increased sophistication of cloud services the great majority of CRM software is now run in the cloud and is accessible and affordable for small businesses and start ups.
If you are interested in understanding more about CRM systems read our article What is a CRM system?
This article provides an overview of CRM software, compares the different software solutions available in the UK market, and aims to help you decide which option is right for your business.
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CRM software options
There is a variety of CRM software available in the UK market:
- On-premise CRM software: On-premise CRM software is installed and run on your business’s IT platform. This had been the conventional model for using CRM systems over many years.
- Cloud CRM software: In recent years, cloud CRM systems, where the CRM software is run on the CRM supplier’s servers in their data centre and the software is accessed by your employees over the internet, have overtaken on-premise software as the most popular CRM platform with 87% of CRM platforms now being hosted in the cloud.
- Open source CRM software: Open source CRM software has been designed using non-proprietary software which can be modified by the user and is aimed at businesses that want to customise their CRM systems to a high degree. It can be deployed on-premise or in the cloud.
- Free CRM software: CRM software may be offered on a free trial basis for a limited period of time. However, some CRM suppliers provide their software free for an unlimited time period although subject to certain usage limitations.
We explore each of these options in more detail below.
On-premise CRM software
On-premise CRM software is installed and maintained on your business’s own IT platform. Installation may be carried out by the CRM supplier or by your business’s own IT team or IT contractor. During the installation phase the software can be customised to meet your business’s specific needs.
Installing CRM software on-premise had been the standard way for businesses to run CRM systems until the rapid rise in broadband penetration and the development of cloud services which have led to a substantial decline in popularity for on-premise CRM solutions in favour of using cloud CRM systems.
On-premise software is licensed from a CRM supplier and is charged based on the features and functionality provided and the number of users required in your business.
Advantages of on-premise CRM software
- Security & control: Your business can maintain complete control, security and visibility over its customer data.
- Integration: On-premise software usually offers a wide range of integration options with other systems.
- Customisation: On-premise software provides extensive customisation potential for you to structure the CRM system to meet your business’s specific needs.
- Data storage: Data storage will only be limited by your available server capacity.
- System downtime: Your IT team can control when you need to take your IT network off-line for maintenance or software upgrades.
- Costs: On-premise software may be attractive to a large business that can generate cost efficiencies from investing in its own fully integrated on-premise technology platform.
Disadvantages of on-premise CRM software
- Security & control: You are dependent on your business’s own security measures to protect your customer data.
- Set up & maintenance: On-premise software needs to be installed, customised and may require you to acquire new hardware (e.g. servers). Your IT team, or IT contractors, will also need to maintain the system and updated it for software upgrades.
- Features & functionality: Depending on your package, the software’s core features may be limited, features may be provided that you do not need or you may need to purchase and install additional modules for extra functionality.
- Remote working & mobile: On-premise software is usually accessed by users from their personal computers using a desktop application which does not support remote working or use on mobile devices. However, a number of CRM suppliers offer add-on cloud applications to support remote access. Alternatively many businesses have a Virtual Private Network (VPN) which allows their employees to access their business’s systems remotely although these systems often have lower functionality, and are less user friendly, than purpose-built cloud solutions.
- Collaboration: Access to on-premise software tends to be via desktop computers for users based in the same office. Where you have employees in other locations or working remotely this can hamper collaboration.
- Scalability: Adding more users or additional functionality may require the CRM system to be reconfigured restricting its expansion. Connecting and integrating with other offices may also be more difficult.
- Business resilience:
- Your IT team will need to back-up the software regularly.
- On-premise software will not be useable if your business’s IT systems have been disrupted and/or your premise is not accessible.
- Customer support: Your CRM supplier should provide customer support although this may be less extensive than provided with cloud CRM systems.
- Costs: Costs of on-premise software can include the initial costs of the system license, the costs of installation and customisation; hardware costs if additional servers are required; fees for additional functionality; maintenance and software upgrade costs; and the costs of your business’s IT team.
If you are interested in finding on-premise CRM software for your business read our article Guide to UK small business CRM systems suppliers.
Cloud CRM software
Improved online reliability, greater broadband penetration and the increased sophistication in cloud services has led to cloud CRM software becoming the standard way for businesses to deploy CRM solutions.
The CRM software is hosted, and runs, on your cloud CRM supplier’s servers hosted in their data centre. Your employees use web-based software, installed on their desktops and mobile devices, to access your CRM software over the internet.
Features and functionality are often provided in modules and can be added or removed from your basic package. Cloud CRM solutions are usually charged as a monthly subscription based on the features and functionality provided, and the number of users of the system.
You will also receive minimum service levels (i.e. the time that the system can be accessed) of between 95% and 99.9% depending on your cloud CRM supplier.
You should note that, although your CRM solution is being run by a third-party, your business remains legally responsible for your customer data held within the system.
Advantages of cloud CRM software
- Set up & maintenance: As the CRM software is run in the cloud it does not need any significant on-site installation and so is quick and easy to set up and add new users. Maintenance and software upgrades are carried out automatically by the cloud CRM supplier.
- Features & functionality: Cloud CRM solutions offer extensive features and functionality which can be added and removed over time from your business’s core package.
- Remote working & mobile: Cloud software will be available at any time, all year round and accessible from multiple locations (with an internet connection) and through a variety of mobile devices.
- Collaboration: Collaboration between employees across departments, offices or even countries is enhanced through seamless access to the system and the provision of common tools, formats and reporting.
- Scalability: Cloud software is highly scaleable with additional users and/or new features or functionality modules being easily added to the core system.
- Integration: Cloud software usually provides an extensive range of integration options with other systems.
- Business resilience:
- Your business’s customer data will be automatically backed-up.
- Your employees will still be able to access your cloud CRM system even if there has been a major incident disrupting your business’s systems or access to its premises.
- Customer support: Your business’s cloud CRM supplier should provide employee training and ongoing customer support.
- Costs: There are no licence, installation, maintenance, upgrade or hardware costs. Budgeting is straightforward.
Disadvantages of cloud CRM software
- Security & control:
- Complete control and visibility over your customer data are not possible as your business will be using a third-party external system to manage and store your business’s data.
- Your business will be reliant on your cloud CRM supplier’s security measures to protect your data. However, those security measures tend to be sophisticated and comprehensive particularly in light of GDPR compliance requirements.
- Customisation: Cloud software has less customisation flexibility than on-premise and open source options. However, cloud CRM systems generally offer a wide range features and functionality that should meet most, if not all, of your business’s needs.
- Data storage: Your cloud CRM supplier may restrict data storage and charge extra fees for additional server space.
- System downtime: System downtime will be scheduled by the cloud CRM supplier at a time which may not be convenient for your business.
- Business resilience: Access to the cloud software from your office requires your business to have a strong, steady internet connection which may be challenging in some parts of the country (e.g. rural areas).
- Costs: Monthly running costs can mount up for business’s needing a large number of users for the CRM software.
If you are interested in finding cloud CRM software for your business read our article Guide to UK small business CRM systems suppliers.
Open source CRM software
Most CRM software uses its supplier’s own ‘proprietary’ source code (the technical code that makes the software run) which is protected and not available for third parties to alter or amend. However, some suppliers have developed their CRM systems using open source software, where the source code is made available to be modified by the user. These systems have become increasingly popular over recent years.
Open source CRM solutions often run on the Linux operating system combined with other free software. These solutions will be supported by an online developer community who can offer their services to install and customise the software, add features, maintain and update the system.
Open source CRM solutions usually offer all of the main features of a proprietary system such as contact management, pipeline management and marketing automation and can be deployed either on-premise or in the cloud.
Advantages of open source CRM software
- Customisation: You will have the freedom to customise the software to exactly meet your industry and/or business’s CRM needs.
- Integration: Integration is possible with virtually any external system.
- Ongoing development: You will be interacting with an open source development community with continual innovation and system improvements.
- Flexibility: Your business will not be reliant on a specific CRM supplier.
- No contracts: No contracts or long-term commitments are required.
- Cost: Open source CRM solutions are initially free or very low cost.
Disadvantages of open source CRM software
- Set up & maintenance:
- It is a major commitment of your business’s time and resources to develop and customise the software to meet your CRM needs.
- Setting the business requirements that underpin the CRM processes and software needs experienced input.
- There is a danger that the system is never truly completed and needs continual modifying.
- You will need to commit to ongoing technical maintenance and upgrades.
- Reliance on developers: Any open source system relies on a committed community of developers to build, update and maintain the system. You will either have to hire in-house developers to manage your software or rely on freelance developers who may have other obligations.
- Limited support options: Customer support is often not available. You will need to engage with the developer community if/when issues arise.
- Features: Basic open source software often has less features and functionality than proprietary CRM systems.
- Costs: Initial developer costs can escalate dramatically depending on the scope of your CRM system. You will also need a server to run the software and ongoing developer and IT support to maintain and upgrade the system. You may also be charged other ancillary costs, for instance, if you decide to host your CRM software in the cloud.
Free CRM software
Free CRM software is often offered on an introductory trial basis at the end of which your business will need to upgrade onto a paid package. However, there are a number of CRM suppliers that provide free CRM solutions for an unlimited period.
Advantages of free CRM software
- Cost: Free CRM software is an extremely cost-effective solution for small businesses on very tight budgets.
- Set up: It is relatively easy to set up as features and functionality tend to be limited.
Disadvantages of free CRM software
- User numbers: Free CRM software is often subject to limitations on user numbers which can be as low as one user.
- Features & functionality: Free CRM solutions have more limited features and functionality than their paid-for equivalents.
- Integration: Integrations with other systems are often more limited than in the paid versions.
- Ease of use: The user experience is usually less developed than paid versions.
- Customer support: Customer support is often more limited than with paid versions or, in some cases, not available at all.
- Reliability: Free software may not be as reliable as paid CRM alternatives and may not be updated as often as its paid-for counterparts.
If you are interested in finding free CRM software for your business read our article Guide to UK small business CRM systems suppliers.
CRM software costs
CRM software has relatively standard pricing structures with costs generally charged on a monthly basis, calculated on the:
- Number of system users: The greater the number of users of the system the greater the cost.
- Range of features & functionality provided:
- Features and functionality are usually offered in tiers or modules – more features/functionality are provided in each additional tier or module, at a higher cost.
- Bundled packages of certain combinations of tiers or modules are also usually offered.
On-premise CRM solutions were traditionally subject to a one-off upfront payment for a perpetual licence. Some on-premise CRM suppliers continue to follow this payment model although today many suppliers price on-premise CRM solutions on a similar per user, per month basis to cloud CRM solutions.
Although pricing is usually quoted on a per month basis, some CRM suppliers offer the ability, and many require you, to pay annually upfront (although often at a discount over the cost of 12 monthly payments) in effect making it a 12-month contract.
On-premise CRM software can start as low as £20 per user per month or £1,100 for a perpetual licence, with cloud CRM software starting at around £10 per user per month. Prices are usually shown ex-VAT.
CRM pricing can vary considerably and you should check the small print to get an accurate comparison between suppliers. Terms may include:
- A requirement to have a minimum number of users of the system.
- A cap on user numbers.
- A minimum annual fee irrespective of user numbers.
- A minimum contract period which can range from 1 to 3 years.
- A monthly pay as you go model.
- Additional fees for add on features/functionality.
- Additional fees for installation services.
- Additional fees for extra data storage (hosted or cloud CRM systems).
- Service levels (i.e. the time that a cloud CRM system is online) varying from 95% to 99.9%.
Both on-premise and cloud software may be offered on a free trial period (which can vary between 7 and 30 days) after which your business will need to switch onto a paid package or move to an unlimited free CRM solution.
The costs of open source CRM solutions vary considerably from versions that are free to download through to those charged at fully commercial rates. Additional features/functionality modules are often charged separately.
If you choose on-premise or open source software your business is likely to incur a range of other associated costs including:
- System installation, configuration and customisation. These costs can be significant.
- The hardware costs of the servers running on-premise CRM solutions.
- Hosting costs (e.g. for open source hosted CRM solutions).
- Ongoing maintenance and software upgrade costs.
- The cost of your in-house IT and development team and/or external IT contractors/developers.
All CRM systems will require a business to prepare and input its existing customer data into the new system. If this is the first time that your business has used a CRM system time, resources and costs will need to be devoted to the exercise to gather, clean and aggregate the data. If the data is already held in a legacy CRM system then it will need to be migrated across into the new CRM system.
You should also bear in mind the costs of training your employees to use your new CRM system. You may need extra training in addition to any provided by your CRM supplier as part of your package.
CRM software comparison
We have compared the different CRM options against the following criteria to help you determine which is best for your business:
- Virtual Private Network.
- Depends on whether you select on-premise or cloud deployment.
- On-premise CRM solutions:
- On-premise CRM software is suited to businesses that wish to maintain complete security, control and visibility over their customer data.
- It is also an attractive option for businesses that are looking for significant customisation and integration potential from their CRM system and are large enough to afford the upfront and maintenance costs that on-premise CRM systems can entail.
- Open source CRM solutions:
- Open source CRM software is often used by larger businesses that have an in-house development team, are looking to maintain high levels of data control, and/or want a highly customised CRM system.
- It can also be effective for small businesses that need a basic CRM system and have the time, resources and expertise to devote to developing their own software.
- Cloud CRM solutions:
- Cloud CRM software is particularly well suited to SMEs that do not need significant CRM customisation, want to get their CRM system up and running quickly and are looking for an economic and scalable CRM solution.
- Cloud CRM software is also becoming increasingly attractive and cost-effective for larger businesses looking to outsource their IT systems.
- Free CRM solutions:
- Free CRM software can be effective for very small businesses that have tight budgets, only need very few users of the system, are prepared to accept limited features and functionality and are not looking to scale quickly.
If you are interested in finding on-premise, free or cloud CRM software for your business read our article Guide to UK small business CRM systems suppliers.