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December 28, 2004

Small business CRM: a $2 billion sweepstake

They were ignored as potential users of customer relationship management (CRM) in the initial 'CRM rush' of the late 1990s, but not any more. New research from Datamonitor reveals small to medium sized businesses (SMBs) are to become the next big growth engine and revenue generator for CRM vendors.

By CBR Staff Writer

Datamonitor research suggests global SMB CRM spend will total almost $2 billion by 2008.

Today, with a saturated enterprise CRM market, vendors are looking to new markets to compensate for slowing sales. According to Datamonitor, the clear answer lies in smaller companies previously overlooked. These are numerous, and often with as much appetite for CRM as their larger counterparts.

Smaller companies are faced with many of the same problems large companies have. These include difficulties in the field of sales, marketing and service. Availability, revenue generation, customer service and channel management – these four are the primary reasons driving uptake of CRM solutions amongst SMBs globally.

This segment of the market will be the growth engine for CRM in coming years. Datamonitor expects the share of global CRM revenues generated by SMBs to increase significantly by 2008.

A new CRM market is being created, one that encompasses those businesses that were not part of the initial CRM adoption phase; CRM is being pressed into the mass market. The SMB space should be at the forefront of vendors’ minds and the different categories of CRM vendors must now work hard to raise market awareness in the SMB space to translate this huge potential into reality.

Enterprise-class CRM is out of reach for SMBs. However, the latest CRM versions look to encompass as much of the functionality as possible, but at a fraction of the cost. Different groups of vendors are now attacking this market, from traditional enterprise vendors to newer SMB-focused vendors.

Price, functionality and deployment are three concerns any potential customer is likely to harbor. Key to success here lies in the flexibility of access provided by the vendor. Much in the same way phone operators offer their customers different headsets, tariffs and options within their price plan, vendors of CRM in the SMB market must be similarly flexible.

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