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Should I buy or build custom registration software?

build or buy custom software_feature

With the state of the economy these days it’s no wonder people both personally and in business want to find the best deal.

Saving money can sometimes be the difference between profit and loss.

Couple that with good old capitalism and you get many software companies offering cheaper deals to businesses.

But is the old saying “You get what you pay for” true for software and for an online registration software you select?

In this series I will try to explain the difference between price and cost.

But this will not stay at the “theoretical” level, I am going to give you real tools that will help you actually calculate price vs cost so that when it comes to making a decision for your business, you can make the best one for your organization.

When evaluating an online registration software (or any software for that matter) you should evaluate the overall cost of the system and not just the price tag for the system.

What’s the difference you ask?

The difference is that price is what you are actually paying the software company, either through your monthly fees or the one time payment you make. Cost, on the other hand, is how using the system actually affects your bottom line.

Eventually, only cost matters since that is what is truly affecting your business.

What does “Cost” consist of?

Let’s say you are paying $99 a month for your online registration software. That is the price.

Whether the price is simple or complicated, it is what you are paying each month to the vendor.

This is pretty simple to understand and its simplicity is the main reason most people refer to that as “the cost”. But it is not your actual cost.

The cost consists of a few factors that I’ve broken up into 5 categories:

  1. Initial setup costs.
  2. Time spent or saved in the first 3-6 months of using the system.
  3. Amount of business you get because you are using the system.
  4. The effect the system has on your reputation.
  5. The effect the system has on your cash flow.

This post will cover initial set up costs. Following posts will look at the second, third, fourth and fifth topics listed above!

When evaluating cost as opposed to price suddenly things look very different.

It could be that a totally free system actually costs you more than a system that you pay a one time fee of $2,000 for or a system you pay for monthly.

Furthermore,  since the factors above (which I’ll go into detail in  this series) are directly connected to your business and the way you work, one system can cost less for business A than for business B even if they have the same price.

That is why you need to assess the various factors for your business and that can be done only when you look at cost and not price.

Now let’s take a closer look at the costs of the first category (Initial setup costs) for an online registration software and how to calculate them for YOUR business (yep, you can actually calculate your costs!).

Price vs Cost: Calculating the Initial Setup Costs of Custom Software

Setup costs consist of the 5 following components:

  1. a. Any hardware you need to buy or rent.
  2. Additional software (in addition to the online registration software) that you need to buy for your system to function.
  3. The cost of integrating the online registration system into your website.
  4. The cost to make the online registration system work according to your existing business processes.
  5. The cost of building the system and altering it in the future when your business processes change.

Let’s get into each on of these 5 components…

Hardware and Additional Software Costs

The world has moved completely to SaaS (software as a service) systems so 99% of the time items a and b are irrelevant when considering your total cost.

This is not true if you are taking a software company to build you a tailor made system (which you should not, but I have already written about why you should not take a company to build your online registration software and use one of the online options in a previous post!).

Even if they tell you they are hosting the system, the cost of setting up the servers and the additional software will come back to you is you ever want to move away from their hosting. So that cost is still there!

But like I said, it is a SaaS world so A and B should be irrelevant and if you have not boarded the “future of software” wagon, now is the time 🙂

The cost of integrating the online registration system into your website.

The cost of integrating the online registration software into your website is easy to calculate.

There are systems that do not integrate with your website at all (RED FLAG!!!!). Then the cost in that situation is normally just adding a link to your site.

But that is a bad option since it will reflect badly on your reputation and will also cost you in the number of people that complete their application.

I wrote about why having the application ON your website is great for branding and professionalism in a previous post.

According to our numbers (through the data we collect to always we what works and what does not), 27% of the people that are sent to an external link that does not have your URL (the website address at the top) will stop right on the first page since they are not sure that everything is legit and secure. So a system that does not integrate seamlessly with your website is costing you 27% in potential clients aka $$$.

Just to help you calculate, let’s say your program price is $1000 per applicant and you get 1000 people clicking on the application link. Let’s also say that only 70% of the people that start a registration actually make a payment (after all your registration process is your conversion funnel so it would be wrong to assume that everyone that starts actually makes a payment).

That means that from 1000 people you generate $700,000.

Now that you did not integrate the system into your website out of the 1000 people that click the link 270 just leave right away.

Then out of the 730 remaining only 70% actually pay which totals you $511,000.

Let’s take a closer look at just what happened: a so called very small detail that you might not have taken into consideration when evaluating the price of the online registration system you selected actually cost you ton!.

You just LOST $189,000! Yes you read that right, $189,000!!!

That’s a lot of lost business and that will actually snowball in other areas. Less business means less people referring you (which generates more business) and less people returning to future programs and on and on.

Compare that to a system that integrates into your website: your webmaster or software company that take care of your site might charge you $50 or even $500 (which they should not) for the 5 minutes it took them to integrate the system into your site (if the online registration software you select is good then that is the amount of time it will take) and this saved you $189,000.

I need to write this so there is no mistake: that is a saving of one hundred and eighty nine thousand dollars. Small detail, big difference!

$50 vs $189,000, hmmm… I wonder which is better for your bottom line.

The cost to make the online registration system work according to your existing business processes.

As I have explained, your online registration software is your onboarding process.

It is the last step that a client does before paying you. Hence, this is your conversion funnel and frankly, the most important part of the funnel. In order to visualize this think of a different conversion funnel: buying a shirt.

When you are buying a shirt you initially evaluate the type of shirt you need, then the style you want, the brands you trust, the ease of getting to the online or actual store and then eventually selecting the shirt and going with it to the checkout page or cashier.

The last two parts is what an online registration software takes care of and hence what it can affect, positively or negatively, on your business.

The evaluation of the type of program the client wants to go to (educational program, camp, sport league, event or anything else a registration software is used for), the brands they trust, and the ease or reaching or finding the website are all things that you do regardless of the registration software.

This is something your marketing should be taking care of (if you want to read a little about how to market your program and how a registration software can help checkout the post in the link this article.

If you want to learn a little about how to use facebook to market your program or how to use twitter to market your program.)

The last two stages: selecting the shirt and going to the checkout page is what the registration software takes care of.

But unlike buying a shirt the process is a lot more complicated. When someone is coming to your program / event / project they cannot order everything you offer.

By this I mean, a 5 year old cannot go to sessions in a camp that geared towards 10 year old children, right?

So the registration system needs to make sure that you are offering the user what is matches their needs and eligibility.

Otherwise even if they order and pay you will need to turn them down since what they selected is incorrect for them.

Hence, an online registration software takes care of the selection of the order possibilities and actually “going to the cashier” and becoming a client. “Going to the cashier” when dealing with educational projects (or actually nearly anything that is not a simple product like a shirt) is not as simple as taking out your credit card and paying.

In order to be onboarded you actually need to get their personal information, sometimes their medical information, their preferences, their friend requests, they need to e-sign some type of agreement, and the quota to see if there is space on the program they want to go to needs to be checked. Depending on your organization and your programs there might be additional information that is needed.

Then you can offer them the correct products and programs that are right for them and only then do they go to pay.

Your online registration software should be doing all this for you.

Furthermore, since you need specific information, the process normally takes more than a few seconds (as opposed to just paying for a shirt) hence you need to enable them to start the process and return to it whenever they need to add more information or when they managed to find the information you requested.

So now that we know what an online registration software does, I assume you understand that there is some implementation to do in order to get it right.

You want to ask the questions and format the application to flow logically and smoothly.

I have written about this previously when covering how to ask the right questions when using an online registration software and when covering pitfalls to avoid when crafting your form flow.

Finally, we have reached the point that we can calculate price vs cost of making the registration process work according to your process.

Let’s say that you found a really cheap system that allows you to ask specific questions but not everything you need.

Is there a cost associated with filling in the holes? Of course since now after each applicant completes the initial process you need to get back to them via email or phone and get that additional information.

According to what we have seen, during registration season, when actual contact is needed with the applicants in order to get additional information, you will have a ratio of 100 registrants per administrative staff that will be collecting the information.

Let’s return to the example of having 1000 applicants to your program.

Now you need either 10 people for a month or 1 full time person for 10 months just collecting data.

This person cannot take care of more innovative stuff like program structuring, lowering your costs or anything else.

They are just communicating with clients and gathering data. This costs you approximately $60,000 a year.

That all just sounds like a big waste of TIME and MONEY, which of course it is. So even if the registration system you found is free it is actually costing you $60,000 a year.

Let’s compare the $60,000 you wasted on a full time employee just to get missing information since you selected a system that was free and could not ask all the questions you need to a more expensive system that allows you to ask any question, make sure that the process is exactly according to your needs, and that fully integrates with your current business processes and workflow.

In order for that system to actually be equal to the cheaper system you will need to pay an extra of $5000 a month.

No registration system out there costs that much. Period. If you find one that does, let us know!

So the cost of saving let’s say $50 a month on the system you selected is actually costing you $4950 a month or $59,400 a year.

(How we did that: $60,000 minus the $600 annual saving when selecting a system that cannot fit into your process).

Mind you: a better system does not need to cost more! It is just that you need to find the RIGHT system for your needs.

Failing to do that results in a very high costs, regardless of the price you are paying!

Note that I have not added the calculation of training your team on the new process, lost of clients due to the unintuitive process and so forth.

That can bring the overall cost to much much higher!!!

Last cost consideration: the cost of building the system and altering it in the future when your business processes change.

So we have seen the cost integration and also the cost of selecting a system that cannot work according to your process.

Now to the actual building and then altering the system in the future.

Let’s do a little exercise: what is easier, writing a welcome letter to your applicants when you are in front of a blank page (or screen) or working off a template that one of your co-workers created? Or maybe editing a letter a copywriter setup for you?

I don’t know about you but for me editing is a lot easier. Furthermore, there are a lot of elements that maybe you do not know about regarding how to write an effective “Thank you for registering” letter (go ahead, check the link and see that it is not as simple as just writing something up, I’ll wait).

Also, maybe you just don’t have the time to take care of every single detail for every single applicant for every single program.

Now that we have established that if some professional can do the heavy lifting for you and you only need to customize it is easier and better, let’s look at the four main structures and options that are out there for system setup.

We have listed the options and also the estimated price you will see for such services on the market today:

Now that we know the options and prices, let’s actually calculate the real cost:

When doing everything yourself, you need to do research to learn what works best, understand the abilities of the system you selected, etc. This takes time and manpower away from normal responsibilities. So it’s not really ‘free’ anymore.

Same with altering a template, maybe a few days less. Though if you really need to cut what you are paying and your time or your teams time is not worth anything, this might work. This also works when you have a very simple process and you do not mind your users needing to select things that should be automatically selected for them.

So if you selected on of the FREE options you have some learning and setting up to do. Let’s assume you are really computer savvy and know everything there is to know about registration. With that assumption doing all this will take at least two weeks.

That is an estimated cost of $2500.So “Free” is not so free anymore, right?

Let’s look at option #3: You send what you need and a project manager just does what you asked for (basically just doing the technical side). You are paying $150 for this and do not need to take care of all the technical side of things. Great! Works for everyone and you just saved $2500 – $100 = $2350, right? Wrong!

Note that this option includes only the technical side of setting up everything in the registration system. In this option the project manager will not make suggestions, will not offer to change questions around and will not put in their years of knowledge in order to make sure you get more completed and accurate applications.

So you still need to do all the work regarding selecting the questions and so forth. Furthermore, an online registration is different than a paper registration just like an online newspaper is different than an actual physical paper in how people interact with it. It is not enough just to through the “paper application” online. You need to alter it according to the new medium.

In this option the project manager is not doing this step for you. Hence you will get less completed applications and will need to contact clients and users regarding their application. Time wasted, revenue lost…

In order to actually calculate option 3 we can assume the technical side takes you 3-4 days to master. So you still have all the work regarding the questions and structure.

That will take you a week at least so this option is actually costing you $1250 (a week work) + $150 = $1400

$150 vs $1400… I wonder which is better for your bottom line.

With $1400 you can go on a fun trip with your family and you will also have the time to do it since you saved so much time.

In option 4 the project manager is doing everything for you. They are adding their knowledge into the process and making sure that everything flows correctly.

Basically you are outsourcing the build process to a professional that does this day in and day out. The cost for you is sending the information to the project manager and then going over and sending any changes to them in an email or maybe through a phone conversation.

Let’s assume you spend 10 hours (overall) going over the process the project manager sends you and then giving them your comments. Hence this is costing you $250 (your time) + $350 (price paid) = $600

In these calculations I have not added the cost of creating a bad system (if you select option one or two) or one that does not fit into your needs. That will cost you in lost clients and lost business and can go much much higher. I have only calculated direct costs.

Let’s have a look at the table again, now with the costs listed:

The cheapest option is actually costing you the most and the so called most “expensive” option is costing you the least.Now things look very different, right?

And this is not taking into account what a project manager can do for your conversion rates, completed applications and cash flow since they most likely create a system similar to your system once a day and know exactly what works and what does not! Amazing!!!


The point of this article is to show you what you need to consider when looking at the ‘price’ of an online registration software and look at the hidden costs of each system option and what it would COST for your individual business.

Only then can you truly evaluate what system is the most affordable for you and what works best to match your needs.

I hope the information was useful, if so please share this with your friends using the social network links below. Also, after the video there is a comments section and I would LOVE to hear what you think and how you calculate costs when evaluating a registration system.

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