Anyone who's shopped for sales software or marketing software has probably been a little surprised by the cost. It seems like every CRM, every marketing automation system, even some email marketing tools are priced in a way that puts them out of reach for most small and mid-sized companies — or makes them think twice before committing.
I won't name names, but you know the systems. They're the ones that cost so much you have to think twice before adding a new salesperson because you have to add them to the user count. Or you have to debate whether your marketing team really needs one more person accessing the platform.
This Is a Real Problem for Small and Mid-Sized Businesses
Here's the irony: nobody is better served by the force multipliers that sales and marketing automation offer than small and mid-sized companies. They're the ones who need leverage the most. And they're the ones being priced out of the market.
Why? Because most of these systems are priced — at least partly — on a per-user basis. Every new person you add to your team adds to the cost of your software. Your software shouldn't be holding you back from adding people to your team. Fortunately there are other options that don't charge per user, and never will. (Including, full disclosure, the one I built — Mission Suite.)
Why Per-User Pricing Is Usually a Bad Business Decision
There are a number of reasons per-user pricing tends to be a bad deal for the buyer. Most of them come down to the same theme.
Per-user systems are great for the vendor. They make revenue easy to predict early in the sales process. If I'm selling you a system based on the number of people on your sales and marketing teams, a quick search will tell me roughly what you're worth as a customer before I even talk to you. As a salesperson, that's a great way to target only the prospects worth my time. As a sales leader, it lets me focus my team on the accounts that'll hit forecast.
I can't fault vendors for designing a model that works for them. We've been operating this way for years — going back as far as the original versions of Microsoft licensing. But here's what it means for you as the buyer:
You end up spending a lot more money than you have to on the systems that help your team perform. You shouldn't have to think about an extra software cost every time you make a new hire. After all, who knows yet if that hire will perform? If they don't, you've wasted even more money — and you're stuck with that license for the term of the contract.
What's the Alternative?
Just because we've been conditioned to accept per-user pricing doesn't mean we're stuck with it. Pricing based on the size of your contact databasetypically works out a lot better for the business. Here's why.
It's more in line with how your business actually grows
We talk about growth based on headcount, but your business really grows through sales. How do you increase sales? By increasing the number of people you're actually talking to. That number is your database size, not your headcount.
You don't have to worry about non-performing salespeople
Say you have to grow your sales team by five to keep up with the demand your marketing and service teams are creating. When you go out to hire those five people, you almost certainly won't end up with five who all stick around. You might hire ten with the goal of keeping five.
All ten need access to your system to do their job. With per-user pricing, you're paying for ten licenses on top of ten salaries. If they all perform, great — the extra license cost is a rounding error. If they don't (and they won't all perform), you've wasted money on licenses for people who didn't make it. Salt in the wound.
With database-based pricing, those extra people don't cost you anything until they're actively performing and adding to your contact list. Your CFO will love you for it.
There are always people on your team who just won't use it
No matter how diligent your sales team is, there's one consistent truth: salespeople hate data entry. They're wired to make connections and find opportunity, not to update fields. So you'll always have some of your team that just doesn't use the system you're paying for. With per-user pricing, you're paying for them anyway. With database pricing, you're only paying for the ones actually putting people into the system.
The Exception
I've been writing in generalities here because this has been my experience in almost every case. But on rare occasions, per-user pricing genuinely is the better deal.
The benefit of per-user pricing is that you usually get an unlimited database. So if you're a small team with a massive database, per-user can win out — assuming you don't need email marketing or automation alongside it.
The one time I've seen this in practice was a two-person recruiting team using Salesforce, with a database of nearly four million applicants. That's a very specific situation, and a very real exception. For everyone else, the math works out the other way.
Let's Look at the Numbers
Setting the exception aside, the difference between the two pricing models can be pretty dramatic. Take a mid-sized technology company with 10 salespeople, each working a list of 1,000 contacts (10,000 contacts total).
Under a typical per-user model (using pricing of a well-known SaaS CRM):
- 10 salespeople × $150 = $1,500
- 1 VP of Sales × $150 = $150
- CEO / business owner × $150 = $150
- Total: $1,800/month
Under a database model (using Mission Suite as the comparison):
- 10 salespeople × 1,000 contacts = $300
- 1 VP of Sales — included
- CEO / business owner — included
- Total: $300/month
That's $1,500 a month in savings. $18,000 a year.
So what could your business do with an extra $18,000?
You Have to Do What's Best for Your Business
A lot of factors go into picking sales and marketing software. Cost is one of them, but functionality, usability, and adoption matter too. I'm not telling you to sacrifice any of those just because it saves money — sometimes it really is worth spending more.
What I am telling you is to take a hard look at your options. Find a system that gives you what you actually need and is priced in a way that makes sense for the way your business grows.
If you want to see what a non-per-user, no-surprises model looks like in practice, here's how Mission Suite prices.