CRM Market Guide 2020
- 1. CRM Market Guide for 2020 Presented by: Subhajit Sarkhel
- 2. TABLE OF CONTENT CRM MARKET 2020 • CRM Market by Numbers • CRM Buyers survey • Who looking for CRM and Why? • Why CRM is important and how does market define • Buyers behaviour • Ready to invest in CRM • Change of the CRM selection Process • Looking for in a CRM system • Cloud vs on-premise • CRM Vendor in a Crowded and Competitive Marketplace • Conclusion
- 3. CRM Market by numbers The CRM industry has been booming for the past several years, and the growth is expected to continue. Here are some fast facts about the state of the CRM market in 2019. $48.2B Global spending on CRM in 2018 75% Forecasted percentage spend on SaaS CRM in 2019 $80B The projected CRM market worth by 2025 41.2% Combined market share of the top 5 CRM vendors 19.5% Marker share held by Salesforce in 2018
- 4. CRM buyers survey As part of our mission to help companies make the best software selection decisions. The goal was to answer some of the critical questions that companies should ask themselves before embarking on this business task. Questions like: 1. Given the large number of CRM software vendors, each proposing and offering what they consider to be the best product in the marketplace, what’s the most helpful strategy to align the company’s needs and priorities to the CRM products and their multiple features and functionalities? 2. How can research conducted within and by the company help in this effort to select the best possible CRM product? 3. Who, in the company, should be assigned to spearhead the selection process? Including the specific functionalities that would best serve the company’s objectives? 4. How much time should be allotted to this selection process? Or should the process be fluid, allowing it to develop and finalize its goal without fear of meeting a deadline?
- 5. WHO looking for CRM and WHY? Eighty-four percent of the companies surveyed have under 1,000 employees, with the greatest concentration found between 1 and 500 employees. Fig 1: Breakdown by number of employees
- 6. Cont.: WHO looking for CRM and WHY? Seventy-five percent also have an annual revenue between $1 and $50 million, with a concentration of 58% between $1 and $10 million. Together, these demographics reveal that 70% of companies have an annual revenue ceiling of $50 million and an average of between 0 and 500 employees with a maximum of 1,000 employees. Fig 2: Respondent breakdown by annual revenue
- 7. Cont.: WHO looking for CRM and WHY? The breakdown of companies in business sample, by industry, is as follows: services represent the majority at 32%, followed by information technologies(IT)and manufacturing, both at 13%. As a point of clarification, many of the manufacturing companies that have an ERP system expressed the concern that the CRM features available in their ERP solution were inadequate and opted to purchase a dedicated CRM system. Fig 3: Respondent breakdown by industry
- 8. Why Is This Important? The most common way of defining business categories is by the number of employees and annual revenue. For SMBs, the number of employees ranges from 0-999, and they have an annual revenue between $5 million and $10 million. When it comes to choosing technology solutions that best fit your particular business, understanding how your business is classified is important. This is why many technology solutions are built with business classifications in mind and have features and pricing that correlate to these business classifications. Example: As such, let’s consider the following: small and medium-sized businesses (SMBs), are the backbone of the U.S. economy. They make up 99% of all firms, employ close to half (47.5%) of the private sector workforce and generate 1.9 million net new private sector jobs according to the SBA’s 2018 Small Business Profile.
- 9. How Does the Market Define This Category of Businesses? When its comes define this category of business it first comes in mind; Do you understand your customers? The relationships that you cultivate with your customer base will determine your company’s level of success. And, as with any important relationship, its level of success will depend heavily upon how well you know one another. But unlike most personal relationships, the company-customer relationship is one that may feel a bit lopsided. After all, most clients don’t have to work very hard to learn about your business; everything that they might want to know is likely readily available.. The benefits of CRM mean never having to worry about incomplete data. • CRM helps turn you into an improved informational organization. • Elevate your communication with CRM. • CRM means improved customer service. • CRM can help automate everyday tasks. • CRM means greater efficiency for multiple teams. • CRM leads to improved analytical data and reporting.
- 10. Enterprise Software Selection Myths selecting and implementing a new Enterprise solution can confound even the most experienced IT professional. It’s this confusion that leads to many of the myths and fallacies surrounding Enterprise software selection. Here’s a quick reality check as you embark on your Enterprise software selection project: • The Cost of an Enterprise Software Should be the Biggest Factor • Enterprise software Selection Should be Entirely Managed by the IT Department • Enterprise software Selection Should be Entirely Managed by Consultants • The More Enterprise software Functionality, the Better • The Research Phase Ends When You Contact a Vendor
- 11. Buyer Behavior: A Guide to the CRM Selection Process The graph below (Figure 4) represents the distribution of the software and tools used by companies to cover important CRM functions. Fig 4: Distribution of the solutions currently used by respondents
- 12. Ready to Invest in CRM The graph below (Figure 5) is a shopping list of grievances (in order of importance) that the companies surveyed have given as reasons to invest in a CRM solution. Figure 5: List of features that drove companies to CRM
- 13. Who’s in Charge of the CRM Selection Process? Responsibility for selection appears to be anchored both to position in the company and to the company size. For companies with an annual revenue below $50 million, the selection was largely in the hands of the president or CEO at 20%, followed by sales at 15%. For companies with an annual revenue over $50 million, the CEO’s role dropped to 2%, while IT most commonly headed the search at 30%, followed by marketing at 15%. Fig 6: Breakdown of individuals responsible for CRM selection, per business role Fig 7: Breakdown of individuals responsible for CRM selection, per business role and per company revenue, less than and greater than 50 million
- 14. Companies Looking for in a CRM System All the basic functions (as identified in our graph) that make CRM run smoothly and efficiently were rated highly by respondents. Technology, an equally important component, shows a little more variance, with automation and integration identified as the most important features (Figure 8 below). Fig 8: Top 5 functional and technical requirements outlined by respondents
- 15. Delivery Models – Cloud vs On-Premise Cloud CRM (also called CRM cloud) refers to any CRM technology where the software and accompanying customer data is housed in the cloud and is accessible via the internet. Alternatively, on-premise CRM software is installed on your own servers and controlled and maintained in- house. Fig 9: Delivery models preferred by respondents A survey results revealed a definite preference for the cloud delivery model at 99% of respondents. However, 43% of those were also willing to consider the on-premise model. Only one company expressed exclusive interest for on-premise delivery (refer to Figure 9).
- 16. A more in-depth analysis of the delivery model preferences isn’t surprising and appears to emphasize the following: •SMBs, on the whole, are more likely to choose the cloud delivery model, the more obvious reasons being lower cost and greater flexibility. •The percentage of SMBs considering both options (cloud and on-premise) is 20%, but 80% want cloud only. Delivery Models – Cloud vs On-Premise Medium to large companies show a greater propensity to consider both models (64%). This is supported, in part, by the fact that many of them have larger IT departments and IT infrastructure in place that can be used to support an on-premise CRM (refer to Figure 10). Fig 10: Delivery model preferences by company size
- 17. CRM Vendor in a Crowded and Competitive Marketplace The results below outline our client survey responses to questions about vendor viability and provide a point of departure with which to analyze them. Fig 11: Comparison of the most used and the most considered vendors
- 18. CRM Vendor in a Crowded and Competitive Marketplace • Microsoft CRM has historically catered to the SMB market, they are steadily extending their reach to the global enterprise market. • SAP and Oracle are the primary competitors to Microsoft CRM in the medium and large company category, • Zoho’s web-based CRM is designed to offer a low cost and quick CRM software solution, including providing a free trial model and starting solution. • HubSpot CRM is also promoting the simple-to-use, low-cost model but is additionally marketing itself as a CRM platform that allows sales teams to regroup quickly by not significantly changing their existing workflow. Fig 12: Top 5 vendors by company size (in order of importance)
- 19. The number of respondents in the ‘other’ category is quite high, at 21% of total respondents. This category’s market share is larger than that of Microsoft. On reflection, however, this number is possibly another indication of the market’s abundant number of products and its turn towards consumer- friendly models (detailed in Figure 13). Smaller vendors are more and more addressing consumer needs by creating quasi niche solutions for many business scenarios, attracting many smaller and first-time buyers. CRM Vendor in a Crowded and Competitive Marketplace Figure 13: Some of the other vendors mentioned by companies (in alphabetical order)
- 20. Conclusion • An investment in the time and resources needed to make a sound and fruitful software selection makes good business sense. While the average lifespan of a CRM product may be less than other software investments, purchasing an efficient system that enhances business productivity is worthwhile. • the overwhelming propensity was to focus on completing the task as quickly as possible without much thought for the outcome. • An inclusive process that listens to as many stakeholders as possible is always best, but keeping a close eye on the features and functionalities that best meet your company’s priorities and business goals is critically important.
- 21. Thank YouBusiness Plan Presented by: Subhajit Sarkhel