Worldwide customer relationship management software revenues totaled US$39.5 billion in 2017, eclipsing database management systems, the former market leader.
DBMS had worldwide revenues of $36.8 billion last year, and it “has been the biggest software segment for years, noted Julian Poulter, research director at Gartner.
CRM software will be the fastest-growing software market in 2018, with a growth rate of 16 percent, Gartner predicted.
Among the CRM sales drivers:
- Lead management
- Voice of the customer
- Field service management
Field service management, or FSM, is “driven by mobile technology and the IoT,” Poulter told CRM Buyer.
Despite many new entrants to the CRM market, the major vendors offering CRM suites covering sales, commerce and service have been showing stronger than average growth and are successful at cross-selling additional modules to existing customers, Gartner found.
However, “none of the three Gartner Magic Quadrant leaders for CRM and lead management — Marketo, Oracle and Salesforce — have a CRM and lead management application that’s designed to work together from the get-go,” X2CRM CEO David Buchanan pointed out, noting that X2CRM delivers that functionality.
Meanwhile, compliance with the European Union’s General Data Protection Regulation is expected to increase the cost of CRM, as well as infosec and customer experience management, over the next three years, Gartner warned. The deadline for GDPR compliance is May 25.
Breaking Down Gartner’s Findings
“Lead Management integrates business process and technology to close the loop between marketing and direct or indirect sales channels, and to drive higher-value opportunities through improved demand creation, execution and opportunity management,” Poulter said.
Voice of the Customer solutions are offered by a variety of organizations with differing breadths, focuses and capabilities, he noted. A comprehensive VoC solution “integrates collection, analysis, distribution and action into a single interconnected platform to understand customer experience and sentiment.”
Marketing automation software also deals with lead management, and “many of the vendors we cover in LM would also be seen as MA vendors,” Poulter said. However, MA also includes more demand generation — ad tech and data management platforms — and more multichannel campaign management functionality.
“Lead management and marketing automation have to go together, and they have to be totally integrated and designed in with CRM,” X2Engine’s Buchanan told CRM Buyer.
They “have to share one database, one overall design, and one workflow process, or companies will be left with two databases which have about 70 percent of the same data,” he said.
The Threat of GDPR
More than 50 percent of 235 multinational organizations surveyed for the 2nd Annual GDPR Readiness Report, which AvePoint and the Center for Information Policy Leadership jointly released last month, have committed additional funds — ranging from hundreds of thousands of dollars to more than $50 million — for GDPR compliance.
However, 60 percent did not have procedures in place to identify and tag data, and 77 percent did not use automated software tools to track the full life cycle of personal data they held.
That could mean trouble ahead, because “the support team must be prepared to quickly and easily respond to customer requests to have a copy of their personal data or have that data forgotten,” noted Abinash Tripathy, CSO of Helpshift.
Tips for CRM Vendors
CRM vendors must recognize the need to differentiate on customer experience, Poulter said. They also should recognize the enhanced expectations of both customers and employees, and build software accordingly.
“Invest in the cloud,” Poulter advised, and “be clear on positioning and messaging. It’s a rapidly growing and changing market.”
Businesses must use the insights, guidance and recommendations provided by artificial intelligence and machine learning, Poulter suggested. They also must use modern mobile interfaces, build a single 360-degree view of customers, remove silos of data, and ensure integration between CRM and CX functionalities.
“The future is around vendors who provide a single solution that includes CRM, marketing automation and lead management,” X2Engine’s Buchanan said, “built on a common database and common cloud and workflow that can span all three areas.”
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David is very much right!
Although he has recently joined X2CRM as CEO, he is already a GIANT in the CRM industry. One more thing to add here, X2Engine is yet to add GDPR compliance in their application.
I look forward to it. Otherwise, I would need to use some third party service to comply with GDPR for my X2CRM customers.