Why would you ever NOT want free software?

By Rob Drummond on Thu 24 February 2011 in CRM

Whatever software you are buying; be it CRM, eCommerce, web analytics or otherwise; there are normally a range of free or ‘open source’ alternatives being marketed to you. As a logical buyer making an investment in growing your business this raises the question – why go for a paid solution?

While open source solutions are free in terms of software cost, it is essential that you consider total cost of ownership of your solution; as given the time and technical expertise required to make a success of the project no software ends up being ‘free’!

Consider some of the following things that can add to total cost of ownership:

  • Technical expertise – for open source software this may need to be from an approved or certified consultant.
  • What investment are you going to need to make in in-house knowledge and skills?
  • Are there any annual licence or support fees involved? (If not, what level of support do you get for free?)
  • What investment in hardware are you going to need to make?

Ultimately, you need to find the right solution for your businesses’ requirements. This could indeed be an open source option, but you need to first explore fundamentally what are your key business requirements, and plan in advance exactly how the solution is going to help you either increase sales, improve customer retention, or reduce costs.

Take Google Analytics as a classic example. Many, many companies use it (or at least have it set up), simply because it’s free, and someone they know or read about recommended it to them.

Now, if you want to track clickstream data – for example who has been on your site, where they came from and what they clicked on, Google Analytics is indeed an excellent tool. It explains the ‘what happened’ superbly; what it is less good at is the ‘why’. If your website has a bounce rate of 50%, why did half of your visitors leave without clicking on a single thing?

If that is a question you want to answer, Google Analytics then isn’t the right tool to answer it.

What you need to do then is find out what questions you want answering – and make sure they relate to either:

  • Increasing your sales
  • Improving customer retention
  • Reducing costs

So for example:

  1. Are website visitors from certain search terms more valuable than others? (Increasing sales)
  2. What keywords are my competitors targeting and optimising their websites for? (Increasing sales)
  3. What customers are most valuable to me? (Improving customer retention)
  4. Do customers that buy one product frequently buy a related one? (Improving customer retention)
  5. What manual steps or processes will the new system allow me to cut out or remove? (Reducing costs)
  6. How much time will the new system save? (Reducing costs)

Based on what you want to achieve, once you know these questions there suddenly is a right solution for each particular question, you just need to decide which questions are most important to you. Do you then want multiple solutions to answer each question, or a single solution that answers most of them as well as possible? It all comes back to cost of ownership.

By the way, once you have come up with your list of questions, most vendors will say “yes, we can do all of them. No problems.” It should go without saying, but you will need to delve deeper into exactly how the solution on offer is going to meet each requirement.

Although these posts aren’t meant to be promotional, a meeting with a ProspectSoft sales consultant always starts with a requirements meeting – where we don’t try to sell you anything at all. All we do initially is spend the necessary time to identify your key business drivers, and the questions that are most important to you.

Then if it turns out that ProspectSoft isn’t the right solution to answer these questions (we try our best, but we’re not right for everyone), you will at least be a step closer to finding the best solution for your particular requirements.