Small businesses to invest heavily in CRM

Wednesday, 05 January 2005, 20:30 IST
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MUMBAI: Small and medium-sized companies are set to emerge as major investors for customer relationship management (CRM) techniques with the spending set to cross $500 million by 2008 in the Asia Pacific region. According to a study conducted by Britain-based Datamonitor, small and medium-sized businesses will emerge as the next big growth engine and revenue generator for CRM vendors. CRM entails all aspects of interaction a company has with its customer, whether it is sales or service related. Latest technologies have changed the way companies are approaching their CRM strategies. With new advances in technology, especially the proliferation of self-service channels like the web and mobile phones, most of the relationship is being managed electronically. Datamonitor said in its report that global CRM application spend by small and medium companies will be close to $2 billion by 2008, more than double the value of that today. In the Asia-Pacific region, CRM spend by small and medium sized companies are estimated to exceed $500 million in 2008, approximately doubling the current revenues. "A new CRM market is being created, one which encompasses those businesses which were not part of the initial CRM adoption phase," said Tom Pringle, technology analyst at Datamonitor. "The small and medium sized businesses space should be at the forefront of vendors' minds and the different categories of CRM vendors must now work hard to raise market awareness to translate this huge potential into reality," he added. With a saturated enterprise CRM market, vendors must also look to new markets to compensate for slowing sales, he said, adding the clear answer lies in smaller companies previously overlooked. "Smaller companies are faced with many of the same problems large companies have. These include difficulties in the field of sales, marketing and service," said the report. Availability, revenue generation, customer service and channel management are the primary reasons driving uptake of CRM solutions amongst small and medium sized companies globally, says Datamonitor. Different groups of CRM vendors are now focussing on this growing market, from traditional enterprise vendors to newer small and medium sized-focused vendors, it added. "Key to success here lies in the flexibility of access provided by the vendor," said Pringle. "Much in the same way, phone operators offer their customers different headsets, tariffs and options within their price plan, vendors of CRM in the small and medium sized business market must be similarly flexible."
Source: IANS
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