Step 3: What's Your Budget?

February 11, 2014 in Technology


Welcome to part three of our blog series, Five Steps to Choosing an Agency Management System. The last post in this series discussed how your customer service needs play a role in choosing an agency manage system. In this post we'll discuss how your budget plays a role in that decision.

Step 3: What's Your Budget?

Purchasing a software as a service (SaaS) agency management system isn't like walking up to the fast food counter, ordering a burger and swiping your card. Think of it more like ordering off a menu with appetizers, drink lists, main courses and desserts. There are an infinite number of options - and ways to split the check.

In steps one and two, you learned to trust "the cloud" and determined your customer service and technical support needs. Now, you're ready to see what systems - and vendors - fit your needs and budget. It's time to order off the menu!

Typically, an agency management system will have a "base plan" that gives you a general idea of what they are offering. Compare it to choosing a steakhouse, a pizza place or a sushi restaurant. You have a general idea of what you'll get before getting too specific.

Do you need to have a pre-defined budget at this point? No - in fact, just 35% of companies considering an agency management system do, according to Capterra's "Business Software Buying Trends." Although it's good to have a ballpark figure (hamburger versus filet mignon), you should go in with an open mind and learn about your options before sticking hard and fast to a budget. Concerned about possible sticker shock? Don't be. Less than one-third of companies purchasing an agency management system felt held back by their budget.

Here are five things to remember when considering your agency management system budget:

1) Ask about a la carte options and customization features.

These options can range from the amount of storage your company can use to adding or removing entire functions of the system (Don't track commissions? Don't purchase the commissions processing tool). Many features seem nice at first glance but you should take a step back and evaluate whether or not you really need them. Reassess these features again after a few months of use and find out if your agency is truly benefiting from them. Be sure to find out up front if you have the flexibility to adjust which features you use and pay for.

2) Understand all additional fees.

Ask about set-up and training fees, fees for additional licenses to use the program and any annual or monthly support fees. Find out if you can avoid any fees by doing some of the setup work yourself. Outline your expectations to avoid budget issues later and always ask your sales rep. about any "hidden" fees.

3) Ask to see all pricing options.

Ask about volume discounts and custom plans. Does the software company offer tiered pricing for multiple users? Are all user plans the same price? Maybe you can get by with putting some of your users on a cheaper plan that limits their access. Sometimes you don't learn about the daily lunch special unless you ask.

4) Ask about contracts.

Is a contract required? If so, how long does it last? Often, you'll get a price decrease for signing a longer contract. Don't want to be locked into a contract? Ask about month-to-month plans. Regardless, be absolutely sure of what you're getting and know that it fits your needs. Do your research so that you don't get stuck with a system that you don't want.

5) Don't buy something you don't need.

Because of the amount of a la carte options and customization features, it is important to make sure you're only paying for what you'll use. Don't continue paying for features you don't need, they cost you more money and they get in the way of the actual tasks you're trying to accomplish in your agency management system.

Use this list as a starting point of questions to ask vendors before making a purchase. Decide a ballpark figure for your budget and then weigh the options available to help you decide exactly where your money is going to be best invested - the full featured "buffet line" type of system with all the bells and whistles or a system that's more specialized to just the things that you need.

Check out AgencyBloc for an agency management system that's built specifically for health & life insurance agencies: Free Trial and Live Demo.

Watch for Part 4 in our Five Steps to Choosing an Agency Management System Blog Series in the coming weeks - it's decision-making time! We'll go over things to remember when comparing and selecting an agency management system.

Watch the recorded webinar:

Step 3: What's Your Budget?

Feel like you're missing something? The full series:

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