CRM: How to Select a Right System? - Part 2 – World Market of CRM
After observing the classification features of CRM in the article "Part 1 - Classification of CRM", it is time to switch to the overview of the CRM market. Let us concentrate on the three main blocks:
CRM market statistics
Major trends in CRM
CRM market leaders
CRM market statistics
Today’s CRM occupies about a fifth of the total market of software solutions for business (along with ERP, BI, ECM, SCM, etc.). Moreover, the market has been growing over the past several years, adding 12.3% in 2015 and reaching a volume of $ 26.3 billion. It is worth noting that this growth was mainly due to the increasing popularity of the cloud SaaS model of using CRM (we have written about the essence of SaaS- Model in our previous article). Deliveries of CRM that are based on the cloud SaaS model have grown by 27%, which is twice as much as the market as a whole, while On-premise deliveries have decreased by 1%.
In terms of functionality, the most popular are CRM-systems, focused primarily on the provision of customer service and support (Customer Service and Support) - this is about 39% of all delivered ones on the CRM market. Sales and marketing activities account for 22-23%. The management of e-commerce is slightly less (about 16%).
The most mature CRM market is North America, where more than worldwide half (55.7%) of all CRMs have been sold. Western Europe accounts for slightly less than a quarter of the market (23.9%). China and the developed countries of the Asia-Pacific region, despite increasing economic power, still showcase only about 3.4% of the contribution to the overall use of CRM. The remaining 11.6% of the world market is Latin America.
Major trends in CRM
CRM segment in sales department management attracts a lot of attention (and venture funding as well). Many startups were noticed here. In particular, leads and opportunity scorings are popular.
In the field of customer service, a virtual assistance is gaining popularity, involving the client in self-service with the help of a personal cabinet on the corporate portal.
The need to organize electronic marketing with elements of forecasting based on Big Data is becoming increasingly hot. Tracking the so-called Customer Journey cycle remains at the forefront of marketers.
In e-commerce, multi-channel support, digital personalization and the Customer Journey cycle are the most popular.
Internet of things becomes more relevant. Many vendors recognize that CRM by 2020 will be the main driver of IoT. To do this, vendors will need to accumulate a lot of data that can be integrated into CRM.
Big Data continues to be relevant to many CRM products in connection with software development initiatives that bring new types of data to more closely interact with customers through smart and mobile devices.
CRM market leaders
Now, we turn to the ratings and name the industry leaders. After all, leaders set general trends, and after studying the best practices of leaders, one can always choose the right approach to building their own CRM-system. The top ten largest CRM vendors account for 58.4% of the world CRM market (with the first six almost 50%). This “ten” is shown in the infographics.
Unconditional leadership is maintained by Salesforce, by market share (about 20%) exceeding the combined CRM from SAP and Oracle companies (2nd and 3rd places, respectively). In the segment of customer service and support, Salesforce has an even larger share of the market - 37.3%. However, in the marketing management segment, Salesforce's positions are slightly weaker - only the 3rd place.
SAP reliably holds the 2nd position in the overall rating for the market share of CRM, while leading in the field of platforms for deploying e-commerce with a market share of 17.1%.
Oracle closes the top three thanks to the gradual transition from the on-premises model to the cloud SaaS approach, and despite the drop in revenue for CRM products by 3.5% in 2015. It is worth mentioning that Oracle recently acquired BlueKai and Maxymiser, which also contributed to the retention of market positions.
Microsoft Dynamics CRM is still popular, showing growth of 20% in general, as well as products from Adobe and IBM.
It is also important to understand who can become a leader in the coming years, ahead of today's CRM giants - the companies that are the fastest growing: Shopify (68%), Zendesk (59%), HubSpot (58%), Marketo + 40%), Demandware (+ 38%).
However, not always revenue of software delivery is a good criterion for assessing popularity. One product can be just expensive, but less popular among users. Therefore, below are the ratings by the number of clients of CRM vendors and the total number of users.
As of mid-2015, Salesforce in its reports indicated the presence of more than 150 thousand customers around the world, taking the unconditional first place. In the top three "winners" in terms of the number of clients were also Zoho (80 thousand customers) and Act! (71 thousand customers).
According to the total number of users registered in the system, Zoho (20 million users), SAP (8 million users) and Salesforce (7.2 million users) took the leading positions.
In the era of the popularity of social networks, you cannot pass by without knowing how much CRM products are valued by users of Facebook, LinkedIn, Twitter. The popularity of our case is measured by the number of subscribers to the pages of the respective vendors.
It's interesting that Salesforce on social networks could only boast the third place, and Oracle only got on the "five" on LinkedIn. At the same time, SAP is stable in the "top three" of the leaders. It is worth noting that also the "top three" got the previously mentioned Hubspot system, being the leader on Facebook and Twitter. Also, Infusionsoft and Sage are among the "five", which were not mentioned in the above ratings.
In the second part of the series of publications "CRM: how to choose the right system?" we have plunged into the CRM market, assessing its scale, the main trends and, of course, we haven’t forgot the market leaders in names.
Consultants at Cicoresky Consulting constantly monitor the CRM market, making not very frequent, but regular deep dives in the subject. Under the link you can download the presentation infographic of this article.
In our next publication, we will work out in detail the criteria for selecting CRM products. To be continued…