CRM for Free? Concursive Gives It Away for a Year
In an attempt to create buzz around -- and, ultimately, drive adoption of -- its ConcourseSuite 5.0 CRM offering, open-source CRM provider Concursive has expanded its existing offer of free trials to include businesses of as many as 100 users. Nothing really comes for free, you say? The Norfolk, Va.-based provider is trying to disprove that presumption. Last November, Concursive began offering free five-seat on-demand CRM subscriptions. With an uptake since then of nearly 1,500 businesses, Concursive is aiming to expand -- this time with companies of much greater size. The only catch is that after 12 months, the free trial comes to an end. (According to information provided by Concursive, businesses using ConcourseSuite 5.0 under this offer "will be given the opportunity to continue the service at low promotional rates -- on the order of half of the rates of competing on-demand CRM offerings.")
Tim Hickernell, senior analyst with Info-Tech Research Group, points out that there's nothing revolutionary about vendors giving away free trials, but it's the scope of Concursive's offer that takes the notion to a new level. Michael Harvey, chief marketing officer with Concursive, says that the company hopes the one-year period will deliver to small and midsize businesses (SMBs) a higher value than the more typical 30- or 60-day trials. “By providing a fully functional, usable system with a meaningful number of users -- and providing a meaningful trial period -- we are going to get an interesting number of organizations that will genuinely start using this tool as their CRM system,” Harvey says. He adds that the trial basis is a way for Concursive to get tens of thousands of people using the software in a fairly short period of time -- and while he declines to predict how many customers will convert to paid licenses after the trial, he says the company's hoping to see a rate above 2 percent or 3 percent. (None of the up-to-five-seat free deployments that began since the original November 2007 offer have yet run the course of their yearlong trials, so no figures on conversion to paid licenses are available. Also unclear is the manner in which users of the free trial might be able to extricate themselves -- and their customer data -- from Concursive's software should they decide to opt out after the trial period ends.)
Harvey points to a statistic from the Service & Support Professionals Association that says that 95 percent of businesses in the United States have no more than 100 employees. Essentially, with this trial, Concursive could supply free CRM to any of those businesses -- and all of their employees. “This is a dramatic thing,” Harvey says. As far as revenue is concerned, Concursive -- which only last week was named a Leader in CRM magazine's first-ever open-source CRM category, as part of the 2008 CRM Market Leader Awards -- will rely on its enterprise customers to maintain its standing; the company's customer list runs the gamut, Harvey says, from Fortune 500 enterprises to five-man shops. He adds that the range in company sizes is a positive attribute for Concursive -- and its users -- rather than a challenge. “One of the most exciting demands over last five years has been [to deliver] the availability of enterprise-class software to SMBs and to organizations that, prior to that, really wouldn’t have access to [these tools],” he says, adding that he sees the ongoing development as a direct result of the open-source phenomenon.
Hickernell says that the free-trial approach is a valid way to garner attention around the perceived cost for CRM. He says that CRM users -- and CRM vendors -- are now beginning to realize that the software-as-a-service delivery model is not really about cost-saving, but instead about deployment flexibility. That newfound perspective allows vendors to get past pricing battles -- dropping the cost to zero, even for a limited trial, is a a sure sign of that -- and instead to focus on the value they provide.
Despite the advantages inherent in a try-before-you-buy scenario, Hickernell sends out a warning to those looking to sign up for free CRM. “My concern for companies and organizations that are considering [this] is that oftentimes they think that if software is free for a temporary period of time, they can skip out on the costs related to product preparation,” he says. “They must not skip the other traditional step of product selection; otherwise, in a year they might find out the product doesn’t do what they needed it to, all because they didn’t bother to do analysis.” Still, he agrees that a free period of such length is also “certainly an opportunity to get hooked.”
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