Software provider Rex warns that adopting cheap software or PropTech solutions could end up becoming a very expensive decision due to hidden costs.

According to Rex, the most obvious but most significant hidden cost of cheap software is the replacement cost when it becomes apparent a better product is needed. There is also the issue of retraining cost.

“As well as the costs of retraining staff, there is a risk of fatigue. They may become overwhelmed with information, lose interest and start making errors on the new system,” said explains Anton Babkov, CEO of Rex.

“Agents changing CRM providers also need to make sure they make the right decision due to the downtime associated with making a change,” he added. “Replacing a failed cheap system doubles the business disruption cost.”

Babkov claims that two other significant hidden costs of cheap PropTech are the time cost – the cost of time which could be spent working on other problems – and missed business opportunity costs, in which poor software could reduce connections with prospects while staff are focused on working around its deficiencies.

He continued: “Poor software can also harm consumers’ perception of your agency if it fails to remind you of key dates or slows your response times. This ‘churn’ cost could be significant.”

“Cheap CRM systems usually run on a ‘churn and burn’ business model. They need a high volume of clients to stay afloat, but you receive little to no attention or support and very few new features or updates,” he explained.

“While both cheap and affordable products imply low costs, an affordable piece of software can actually add value to your business and ensure you don’t end up paying extra for the hidden costs associated with cheap products.”