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As an industry, CRM continues to grow and shower benefits on its users. It’s hard to imagine that some businesses still don’t use some form of CRM, but the data presented in a new infographic from Algoworks suggests there are still businesses buying their first CRM solutions or changing vendors. It’s a compilation of data from all over, with some credible inputs from Gartner and others, so it’s worth taking a look.
Only 49 percent of businesses have a CRM system, based on the graphic, so there’s a lot of white space in the market, which suggests it’s possible for some upstart to swoop in. However, the history of markets indicates they go in the other direction, settling into a tri-opoly, and currently there are just a few more competitors than that.
Breaking With the Past
With a compound annual growth rate of 15.1 percent between 2012 and 2017, according to Forbes, the industry is healthy.
It’s generating US$36.5 billion in revenues, according to Gartner, but that number needs to be taken in context.
Thanks to pioneer Salesforce, CRM was the first area of software to adopt Software as a Service, and that did two things to the revenue number. First, it flattened the number by charging for use rather than ownership, and that reduced the overall revenue you could have expected had the industry remained in the Siebel model of conventional software.
The other thing that SaaS has done is to make the revenue stream more secure and repeatable. With multiyear deals, it’s easy for vendors to make their growth projections, because so much of their revenue is already under contract. You could say what SaaS takes away, SaaS gives back.
More useful for the customer is the return on investment. For every dollar spent on CRM, an average business earns back $5.60 — a good reason to not go without it or build it yourself.
Beyond those numbers, though, we can run into contention as adoption issues raise their heads. We still haven’t gotten away from the stereotypical salespeople who won’t use SFA (sales force automation) for fear of I don’t know what, maybe unicorns. Perhaps that’s why 43 percent of CRM customers use less than half of the features in their CRM systems.
That’s puzzling, but there are several explanations. Through bundling, CRM vendors actually…