It’s a common mistake for organizations to set a budget before they understand what it is they're trying to buy, or how the market has evolved in that time. Affordability is key, but setting a budget without having first understood what your needs are and how different suppliers charge to meet them is a waste of time.
From our extensive experience of helping organizations at this stage, we recommend the following first steps to considering budget.
Find out what you're really paying now
Ticketing and CRM systems use several different methods to charge their users, and the quoted cost of your box office software is often only one of the components you pay for. To determine your real, total cost of ownership annually, evaluate everything involved - including any other systems you’re thinking about replacing
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License fee
This might be a one-off cost that has been depreciated over time in your budget, or a recurring fee for every contract year.
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Per-user fee
Often, you are asked to pay a fee for each user who has access to your system. Typically this is an annual or monthly cost on top of the license fee.
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Upgrades
Software providers often charge a fee when upgrades are released. Often, these upgrades become a requirement to keep your system operating and supported by the vendor.
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Per-ticket costs
Sometimes providers will include a certain value or volume of sales per year and then charge an overage for sales beyond that threshold.
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Payment processing fees / card charges
Many systems require you to use one of their integrated services for accepting card payments. This is sometimes bundled into license fees but is often a separate monthly charge from the provider, or a third party.
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Support costs
Do you pay for support through an annual contract and/or on a per-incident basis? CRM systems are often sophisticated tools and support is a necessary service, so should be considered part of the true, total cost you’re paying.
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Professional services fees
Often described as report writing services, training, consulting or project management fees
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Costs of other systems that you’re replacing
If you’re looking to replace other systems, such as fundraising or marketing tools then make sure to take the cost of these tools into account to understand the true cost of CRM to your organization.
Prepare to speak to prospective suppliers by gathering the essential facts
Modern system suppliers tend to deliver their product on a ‘Software as a Service’ (SaaS) basis. This means you’ll pay an ongoing fee relative to your usage. It’s a far superior way to work with a supplier compared to buying outright, but it means in order to get an idea of costs you need to have a few facts and figures available so suppliers can calculate a quote for you.
Make sure you have the following information available:
- The total number of tickets you sell each year. If you can, itemize complimentary and paid tickets.
- The gross value of box office sales. You should include ticket sales, subscriptions, memberships and merchandise.
- Some legacy suppliers will also ask you how many people need to use the system in total and at any one given time.
If the pandemic has caused significant differences in your numbers, it’s often useful to give a three-year average.
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Know the right questions to ask for accurate quotes
Contemporary, leading suppliers tend to take an ‘all inclusive’ approach to pricing. Often this means including support and payment processing as well as the software itself. This operational expenditure approach means you can get excellent value from your supplier, but not all suppliers are equal. Make sure to ask prospective providers the following essential questions so you get the full picture on costs:
- Is hosting, security and system resilience included? Cloud based systems should handle all of this for you so you just access the software and don’t worry about how it is maintained.
- Are unlimited users included? There is little point in upgrading and consolidating systems if you are penalized for how many people use it.
- How are upgrades managed? Operational expenditure-based systems mean the supplier should be incentivized to keep you as a customer. Are they including future upgrades and enhancements in the cost?
- Are support, professional services and implementation inclusive? They should be. If you need to pay again to understand how to use the software you’ve invested in, you’re likely to limit the use of training and support services that you really need to get good value.