CRM Adoption RatesCRM software is notorious for being too difficult to use, while not always offering enough features to make the start-up trouble worth while. The overall number of businesses looking to adopt CRM software is increasing significantly, but there are still many more holdouts than we’d expect. You can see that in the chart below: The numbers appear to be the same regardless of the size of the business, which goes to show that CRM software has a place everywhere. With more businesses looking to implement CRM software into their future business plans, it can be argued that CRM software is an essential for businesses of all sizes if they want to remain competitive in today’s trust economy. Businesses are also shifting towards Cloud-based CRM software at a much more rapid pace. According to a Software Advice study, 88% of CRMs were on-premise systems in 2008. Today, 87% of CRM systems are now powered by the Cloud. This shift is significant because businesses who didn’t have the money to set up a proper on-premise system are no longer held back from the lack of funding. There are seven major fields CRM software works with: Finance and insurance; pharma and biotech; nonprofits; healthcare; high-tech manufacturing; PR, media, and entertainment; and retail and wholesale. Each field requires features including omnichannel capabilities, customer support, team collaboration, partner management, project timelines. With Cloud-based CRM software being more readily available and desired by businesses today, these features can all be included without businesses having to worry about managing them on their own on-premise system.
How the Market’s GrowingWith CRM adoption rates continuing to increase, and with providers prioritizing cloud-based services over on-premise to encourage more businesses of all sizes to adopt CRM software, it goes without saying that the market is steadily increasing as well. Here, we’re going to let the numbers speak for themselves in terms of how the market is actually growing. “CRM market potential is projected to be $82B by 2025 and growing at 12% annually” (Seeking Alpha). This number alone is impressive and very attainable considering Salesforce recently announced they’re looking to achieve $60 billion in revenue by the year 2034. Seeking Alpha goes on to say, “If the current 12% annual growth rate for the entire CRM market continued until 2034, the CRM market potential would be $228 billion.” IDC also released their own report (Sponsored by Salesforce) on how AI will impact the CRM market. To sum the numbers up: AI will play a significant role in the CRM market by increasing jobs and revenue.
- “IDC calculates that AI associated with CRM activities will boost global business revenue from the beginning of 2017 to the end of 2021 by $1.1 trillion.”
- “Net-new jobs associated with this revenue could, if respondent opinions bear out, reach more than 800,000 by 2021 in direct jobs, and 2 million if you add in indirect and induced jobs. This is a net-positive figure in that it includes an estimate of jobs lost to automation from AI.”
CRM Leaders in 2018CRM software is an extremely broad subject that keeps getting broader the more businesses realize they can use the software to their advantage. Automations and customer experience are two major trends that are pushing the industry forward. Gartner breaks down providers in two categories: Sales Force Automations (SFAs) and Customer Engagement.
- Sales Force Automations are simply sales automation applications businesses employ to help manage contacts, orders, opportunities, sales forecasts, leads, and dashboards. These automations are becoming more powerful through the use of AI, so SFA leaders will either be implementing AI already or are preparing to within the next few years.
- Customer Engagement ensures the customer is being prioritized throughout the entire sales process and afterward as well. This can range from ensuring features and applications are easy to use and navigate, providing customers with knowledge bases either on their website or on social media, or sending automated follow-up emails.
To form a better understanding of how the market currently stands, we’ll take a closer look at two Magic Quadrant reports from Gartner. These market breakdowns offer deep insight into the current SFA and Customer Engagement leaders in 2017, and exactly why they were ahead of the pack. This helps us gain a strong indication of who and what is performing well, and what the market currently looks like.
Salesforce was considered an SFA leader because of its Sales Cloud functionality and improvements on that functionality. In 2016, Salesforce launched its AI-powered, predictive analytics software Einstein. AI, as you’ll see later on, is playing a major role in the CRM world, so Salesforce being ahead of the game positions them as a leader.
Microsoft was also a leader because of its deep understanding of the market. Microsoft offers its users advanced customization options, which helps to personalize every individual’s experience. This in turn promotes a positive customer experience because agents can now use tools catered specifically to their needs.Oracle was the third leader in SFA because "Oracle has the deepest set of native core and near-core SFA capabilities of the leading SFA vendors in this Magic Quadrant." Customers also say that the functionality of Oracle's mobile and predictive analytics software is very high, which is significant because user experience is just as important as customer experience.
Customer Engagement Leaders
Salesforce, again, was the top dog in customer engagement. Gartner considered them a leader in 2017 because Salesforce offers multiple Cloud solutions, like the Sales Cloud, Marketing Cloud, and App Cloud to users. They also have a strong base that doesn’t just see them as a CRM provider but as an advisor on key software innovations.
Pegasystems was another leader because of its scalable services for businesses of all sizes in varying industries like banking and healthcare. They also offer cloud-based, on-premise, mobile, and web services to make sure each user receives an experience that will cater to their specific needs.
Microsoft was considered a leader because its customer service software is now used as an independent module within their CRM software. They also offer on-premise and cloud-based services, but Microsoft has the advantage of being more widely known -- over 1 billion people use Microsoft. They also added Unified Service Desk to their software, which brings with third-party providers of telephony, chat, and video services.Oracle also has a large base, but what stands out to Gartner is the fact that they’re implementing AI into their customer engagement strategy. Oracle is also one of the most scalable solutions in the industry, which makes them a serious Microsoft/Salesforce competitor. It is also easy to set up and doesn’t require an IT team.
Zendesk is the only provider who focused primarily on small businesses, but their customer support solutions can also be implemented by businesses with over 100 employees. They take advantage of an intuitive interface, user-friendly integrations, AI, and an SaaS structure making it applicable overseas as well.
The TakeawayThese two major trends absolutely go hand in hand, as one of the best ways to improve customer engagement is by implementing automations. These automation allow agents to spend less time on mundane tasks, and more time assisting callers. These trends are so critical that we have already begun to see industry leaders like Salesforce offer AI-backed features like Einstein, which helps improve customer experience by handling these routine tasks for agents. In the future, we will only continue to see these trends become the standard, with automations working their way into the foundation of every CRM platform, and Customer Engagement becoming a high priority for every business, not just the largest players. And CRM absolutely isn’t going away any time soon. According to Gartner's "Magic Quadrant for CRM and Customer Experience Implementation Services, Worldwide":
“By 2020, the CRM application software market will overtake the data management market, thus becoming the largest of all software markets. For many service providers, this means that the CX and CRM portion of their digital practices is already the largest practice and will continue to outpace others.”
Again, this shows that focusing on the customer experience is not just a trend, but an entirely new way of doing business. Prioritizing the customer will always be the goal, and new trends and features like machine learning software will all be catered to ensuring the customer has the best, personalized experience every single time. We expect these providers to continue to lead the way into 2018.
CRM Challenges for Businesses and ProvidersCRM software is entering a new age in 2018 in terms of powerful features providers can offer users, but just because you can lead a horse to water doesn’t mean you can make it drink. Many businesses are still reluctant to adopt CRM software for many reasons. Here, you can see what causes businesses problems when they first adopt CRM software. Even the lowest percentages are still a significant number of businesses who have some problem implementing CRM software. “The organization failed to reward exemplary customer service,” being the number one issue in this chart is also telling. Gamification has been a business trend for a while now and CRM providers are still slow to offer features that would reward CRM users. These two charts show that CRM users are still struggling to figure out the most basic features, or aren’t being offered enough features to help improve customer and user experience. These are major issues that need to be addressed if CRM software is going to be the new norm for businesses of all sizes. The first chart in particular is alarming because many CRM software providers -- especially those that are catered to SMBs -- offer large integration bundles, mobility features, social media tracking, self-service features, and easy-to-use design tools. What these numbers tells us is this: CRM software providers aren’t doing enough to either showcase the features they offer on their website or providers are limiting the number of features they provide in order to keep their prices low. The numbers in the bottom chart suggest that those CRM providers who do include those features on paper are not making them user-friendly, which will inevitably keep CRM adoption rates low if they’re not addressed sooner.
CRM Software and AIAI is by far the most significant trend of 2018, and goes hand-in-hand with both the automation and customer experience trends we have mentioned already. CRM software providers are looking to implement AI into their software to improve a number of key features that will ultimately make CRM software an extremely powerful tool that businesses will be lining up to use. The features AI significantly improves are as follows: Automations, sales forecasts, customer service, customer journeys, and virtual assistants. Let’s quickly look at how each feature benefits from AI.
1. AutomationsWith AI, CRM software can implement more powerful automations that continue to take time-consuming tasks out of the business’ hands in order to prioritize the much more important tasks throughout the day. According to “Five Key Trends for 2018 That Shape How Companies Drive Relationship and Revenue”:
“In 2018, CRM users will use AI to improve efficiencies and deliver better experiences. Marketers will monitor customer journeys and proactively engage at points of opportunity. Sales will identify high-quality leads, mine the most useful relationships within firms, and pinpoint the right contacts and sales collateral for buyers. AI will also help sales with product bundling and discounting to maximize revenue per contract. Customer service teams will use agents’ next-best actions or better route customers, classify cases, and optimize schedules.”Automations across all departments in businesses will benefit from AI enhancements that CRM will start offering to its users. The fact that all kinds of teams can use CRM software suggests that AI will be the new norm when it comes to CRM software.