Customer Relationship Management (CRM)

Global CRM Industry Outlook

• The global customer relationship management software market is estimated to grow at a rate of 10.6 percent, from $42.41 billion in 2021

• Due to increased competition among service providers and quickly growing businesses, the North American market will continue to dominate the market, in terms of size over the projection period

• The US and Western Europe have high market maturity in CRM. Parts of the APAC, such as Australia, China, and India have medium market maturity

• The key CRM market drivers are increase in adoption of CRM by SMEs, better customer retention, and acquisition

• The key factors that drive CRM software revenue are lead management, voice of the customer, and field service management

Global CRM Industry Analysis

• APAC and LATAM are emerging markets with shifting focus on SaaS, Mobile CRM, and analytics

CRM Supply Analysis: Supply Market Outlook 

Global/Regional Supplier

• Mature and Diversified Market: CRM market is highly matured and key differentiator among CRM suppliers is the ability to integrate cross-functional data. E.g., Customer data across sales, marketing, and customer support. In addition, buyers prefer suppliers who has integration-ready partnerships and one-stop solutions. E.g., Oracle’s Marketing Cloud should connect seamlessly with Salesforce sales cloud

• Increase in SaaS CRM Adoption: There is a rapid shift in the CRM deployment model, as the buyers are moving from on-premise model to SaaS model due to the shift in operating models caused by the COVID-19 pandemic, digital transformation initiatives and benefits of moving to cloud

CRM Supplier Perspective: Vertical/Local Supplier

• Experience Across Industries: In CRM, Tier-2 suppliers are also known as vertical specific suppliers. Enterprises are more focused on product capability rather than the supplier strength (revenue/client base, etc.)

• E.g., Veeva and Cegedim are key suppliers, who deliver SaaS based sales CRM module specific to pharmaceutical industry

Engagement Trends

• Most Adopted Engagement Model Globally: Multi-supplier sourcing strategy

• No One Size Fits all Solution: No CRM solution is complete and all CRM solutions require custom development or third-party applications to achieve 100 percent efficiency. An enterprise can have more than one CRM solution based on their business requirement, such as marketing, sales, e-Commerce and customer support. Due to constant change in business models/geo location enterprises are seeking better CRM solutions that can keep them ahead of competition and help achieve better customer service

• Contract Length: 2–3 years, with an option of contract extension based on performance linked with SLA’s

Global CRM Drivers and Constraints

Drivers

Evolution of Artificial intelligence (AI) based CRM:

• Increase in Big data, adoption of SaaS delivery model and advancements in machine learning and analytics have made AI inevitable in CRM transformation. The role of AI in CRM would be minimizing the manual work, create an automatic process, reconfigure the interfaces based on the usage patterns of customer/business. Major application of AI in CRM are, Virtual customer support, workflow automation, predictive sales analytics and customer engagement, Social media monitoring and sentimental analysis

Demand for Better Customer Experience:

• Due to the usage increase of digital channels, such as mobile devices and social networks, customers expect a quick response on their queries and complaints without any delay. CRM provides solutions to support and stay connected with their customers by deploying an effective contact center management, to solve their queries and increase customer loyalty

Cloud CRM:

• The demand for cloud-based CRM software has increased significantly in the past 2-3 years. The cloud-based CRM software market accounts for more than 70 percent of the overall CRM software market and is forecasted to grow further as enterprises are transitioning to cloud

Constraints

GDPR Compliance:

• Compared to other applications, CRM deals with vast amount of sensitive/personal data and enterprise are in a position to comply with the European General Data Protection Regulation (GDPR). It is expected that in the next 3 years, the cost of GDPR compliance will increase across information security, CRM and customer experience (CX) especially in Western Europe

• In addition, if enterprise do not comply with GDPR, they might end-up in losing customers due to lack of trust on customer data protection or customers will provide false data or will close accounts. This would reduce the chances for enterprise in reaching to right customers with the right offers at the right time

Integrating CRM with external platforms:

• Although the enterprises have started to integrate and synchronize their existing CRM with other platforms and sources, the development in this area is still in a work-in progress state

• For example, enterprises should have a strong vision towards integration such as integrating mobile and web solutions to enhance productivity. Enterprises are in a phase of synchronizing their social media inputs, Omni-channel support, and customer analytics data to extract intelligence