Contract Lifecycle Management (CLM) software is quickly becoming essential for companies, following in the footsteps of other software like Microsoft Word, Skype, and Slack.
This comes as no surprise, considering that contract management software saves time, cuts costs, automates routine work, improves productivity, and increases contracting efficiency.
Manual contract management is tiring and time-consuming, yet many companies still do it, even if they risk losing over 9% of their annual revenue. On top of that, 88% of spreadsheets contain costly errors that can reach the millions (just ask Kodak or JPMorgan).
When companies stand to lose millions due to poor document management, companies start looking for solutions.
In this case, it’s CLM software. However, there are tons of factors to consider, especially since the CLM software market is comprised of multiple providers with an even greater number of options.
If that weren’t challenging enough, there’s no “industry standard” to work off of when it comes to pricing. It’s not like new iPhones, which you can expect to pay around $800 for at launch. Rather, CLM prices can range anywhere from less than $1 per month to thousands of dollars.
As the saying goes, “You get what you pay for.” That’s why we’re going to dig deep and explore some of the factors that determine a CLM system’s price so that you don’t have to start from zero.
How NOT to Start
Before we dive into what factors to look for, you should know about some red flags that should set alarm bells ringing.
While there are several traps to watch out for, the most common are arguably: A) opting for a “one-size-fits-all” solution, and B) not creating an implementation gameplan.
In case A, there are two types of CLM vendors who claim to provide “universal” software. The first type is willing to adjust their software to fit your needs. The second type simply believes their software is “plug and play”, meaning that everyone can start using it right away. The implication here is that they won’t change anything. Instead, you may find you need to adjust the way you work just to use the software you purchase.
The first kind of CLM vendor is the kind you want to work with. The second, not so much.
Also, companies often fall for the first software they find or they receive a demo of. They then experience quite a shock when implementation starts and they discover the software doesn’t really fit their needs.
And in case B, software is meant to be used. However, the quality of software is only as good as its implementation. If you don’t work with a CLM vendor that has the requisite technical and soft skills for successful implementation, you may find yourself with a malfunctioning product or with a vendor who’s beyond unpleasant to work with. In both instances, your new CLM software creates a greater number of headaches than solutions.
You can bypass all of this with a few simple steps. Start by finding a CLM vendor who is open and transparent about their pricing, as well as the features they offer. Ask the CLM provider if they offer a trial period so that you can experience their CLM firsthand. And schedule a demo with their team where you can ask direct questions and get direct answers.
Generally, it’s already a good sign if a provider is straightforward and transparent.
Why CLM Prices Are Hard to Find
Unfortunately, most CLM providers don’t openly publish their CLM prices. They hide their prices behind “book a demo” buttons, which locks you into a sales process that could turn into a neverending back-and-forth (or an endless stream of emails straight into your spam inbox).
Here are a few reasons why providers might not openly display their prices on their webpage:
Potential price wars with competitors
Lack of confidence in their product (and the value it generates)
For companies who do transparently publish pricing, a few places to look for such information are somewhere on their website, a dedicated pricing page, or a pricing calculator. You should also be able to ask during the demo.
Other, less obvious spots to find CLM prices include software review websites like Capterra and G2, video reviews, and articles.
If you’re hesitant about working with providers who are vague about their prices, there are enough CLM providers that you can simply switch to them. With the amount of money at stake, it’s better to feel comfortable and secure in the conversations you’re having than to always be uncertain.
CLM Price Factors
Several factors affect the final price tag of CLM software. Sometimes, companies bundle a variety of them together before slapping a price on a package, similar to how you might book an all-inclusive package at a 5-star resort – the type of room, number of nights, alcohol (or none), and flights all depend on the price you pay, but you have little to no control to mix or match as you want.
Other times, CLM providers offer features a la carte, meaning there’s no set package. Instead, the price is determined purely by the features you select. To continue the previous analogy, it would be the same as opting not for a specific package, but rather for a vacation where you can choose the days you want, the meals and drinks, as well as the room itself (suite, double, bungalow, etc.).
CLM software vendors structure their pricing in multiple ways. Here are some of the most common features that shape the price of a CLM:
Number of users
Number of documents
Number of workflows
Real-time redlining and collaboration
Optical Character Recognition technology
Legacy contract management
Enhanced search options
Bulk contract processing
Additionally, in order to achieve their full potential, CLM platforms often integrate with other third-party software. This increases a CLM’s ability to provide support to other teams.
Many CLM systems come with certain integrations automatically. However, some vendors are willing to build custom integrations upon request.
At ContractWorks, we openly and transparently publish our CLM software prices. Not only is it easy to find the price for each of our three levels, but we specify which features are included in each package.
This ensures that when you sign up for a demo with us, you’ll enter already armed with the knowledge of how much we cost and which features you may need (or don’t need). Consequently, you start from a much more powerful position than you might have with other companies, and you also skip having to ask simple questions about pricing and features.
Instead, you’re able to use the demo to ask questions for clarification or provide further explanations about what you need. And since you have our prices, you can also estimate the potential ROI of using ContractWorks.
You can even bypass the demo and jump straight into trialing ContractWorks and experiencing our CLM for yourself for free.
Many factors go into shaping the price of a CLM platform. At the same time, many providers don’t openly publish their CLM prices. Instead, they rely on bells and whistles shown during demos to lure you into signing a contract with them.
Download our comprehensive guide on CLM pricing so you don’t fall for the marketing and sales pitches. In it, you’ll find more info about:
Challenges of adopting CLM software
CLM pricing matrix that maps out the value of features
Hidden costs that can inflate the price tag
Approaches to calculating the ROI of CLM software
Use our guide to navigate your own CLM search. You shouldn’t have to pay more than you should, especially for features you don’t need.
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