Bargain hunters. You know the type. The ones who go with the discount agent who’s more than willing to shave 0.75 per cent off their comms.
But why won’t you offer the same deal? Could it be:
- the late night negotiations to squeeze an extra thousand dollars for the seller;
- the Sunday private inspections;
- the cleaners you organise before an open home;
- the way you tailor a marketing strategy to the current market and target buyer; or
- the little extras you provide?
You don’t discount your commission because you stand behind the quality of service you provide. The same logic applies to CRM providers.
Considering a low-cost CRM? Read this before you lock yourself into a contract you may regret.
Cheap v affordable real estate CRM
“Cheap” is good for your wallet in the short term, but harmful to your business in the long run.
The thing is, businesses that create and sell CRMs like this are generally running on a “churn and burn” business model. In order to survive, these CRM providers need a high volume of agencies (like yours) to sign on the dotted line. Their attention is focussed on generating new business, instead of supporting current users with new features, system updates and troubleshooting.
“Affordable” CRMs provide services at a competitive price. Although both descriptions imply low costs, the important distinction between “cheap” and “affordable” is that affordable CRM systems do not compromise on quality.
An affordable CRM will provide processes, templates, automation tools and more that actually add value to your business – for a reasonable amount of money. A cheap CRM will usually end up costing you far more in the long run, and in more ways than one.
Seven hidden costs of cheap real estate tech
- Replacement cost
Choose a CRM provider that isn’t right for your agency and you’ll ultimately need to replace it. That could mean early termination costs – as well as another set of onboarding fees.
- Third party product costs
We’re all for integrating your CRM with third party products to extend your capability and come up with novel automations. That’s why our API is as open as possible. But that doesn’t mean you should have to integrate.
You should be able to conduct your business from the one CRM. If you choose a cheap CRM that can’t handle your trust accounting, for example, you’ll need to use another system and build an integration with your CRM. That means ongoing maintenance and admin costs, as well as the potential for data discrepancies and sync interruptions between the two products.
- Retraining cost
To get the most value from your system, staff need to know how to use it. Training is a critical part of rolling out new software – skimp on it and you could set your team back months.
In addition to the direct costs of retraining when you switch CRMs, there’s the secondary cost of training fatigue. Staff may become overwhelmed with information, lose morale and start making errors.
- Business disruption cost
Downtime is unavoidable when changing CRMS. Your new provider needs time to get your data into the system, and you’ll want to set up user permissions as well as any branded templates before you grant staff access. Replacing a failed system doubles this disruption cost.
- Time cost
Choose a cheap CRM and you’ll waste a lot of time on problems that would have been avoided by selecting best-fit software in the first place. Your staff will spend time learning how to work around your CRM’s limitations.
- Missed business opportunity costs
When your agents spend time working around software deficiencies, they’ll likely miss new business opportunities. For example, if you choose a cheap CRM that can’t send automated price drop alerts to everyone who has enquired about the property, someone will have to manually go through and send a message to every enquirer. This manual task cuts into time they could be spending actually talking with prospects and finding their next listing.
- Customer perception cost
Things like increased response times, lack of automation and rigid structures affect the public perception of your agency. If you choose a CRM that doesn’t remind you to send your past vendor a birthday card, for example, they might not remember you next time it comes to sell.
Sometimes referred to as “churn”, this is the cost of wrong software negatively affecting how your agency is perceived.
Decision time: it’s all about ROI
So, which do you choose – cheap or affordable? The answer’s simple: buy whichever you predict will produce the best return for your investment for the lowest manageable risk.
If two CRMs are similar in price and deliver “like for like” functionality, you’ll probably buy cheap. But when there’s a small price gap and a definite leader in delivering the functionality your agency needs – why wouldn’t you buy quality? A fully-functioning mobile app, or the ability to automatically send emails and SMSes based on a trigger event, or even link your CRM to Slack will deliver far more value than a CRM that effectively operates as a database.
Do your research, read reviews, find out a bit about the team behind the system – how big is the team, how active their product development is, how involved are they in the real estate world? Do whatever it takes to reduce the risk, because while a cheap real estate CRM may sound great, the reality is that buying the wrong system is really, really expensive.