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 Welcome to CRM cafĂ©

Here we look at the state of the CRM software industry and identify the top CRM software, cloud CRM and social CRM solutions.

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State of the CRM Software Market

The customer relationship management software industry is incurring more shift than at any time in the last 15 years. The three primary CRM software growth sectors are growing at significantly different rates, thereby changing the relative proportions of each and how the market views, buys and deploys CRM solutions.

CRM software consists of operational CRM, analytical CRM and social CRM sectors.

Operational CRM primarily accommodates transaction processing, record management and basic reporting, and is best known by the three primary functions of marketing, sales and service. Key processes include account management, opportunity management, marketing campaigns and case management. The operational CRM software market has rebounded from very low single digit growth after the turn of the century, however, is far from the aggressive double digit growth in the 1990s. For the year ended 2010, CRM software growth was 8%. However, hidden within that increase was a 25% growth rate for cloud or software as a service (SaaS) CRM solutions. In fact, for Sales Force Automation (SFA) solutions SaaS growth exceeded 50% for the first time ever.

Analytical CRM software solutions deliver insightful patterns, notifications and other often difficult to spot information about a company's customers, thereby, enabling the company to better predict and respond to customers for growth initiatives or other strategic benefits. CRM analytics software tools are often part of broader business intelligence (BI) suites, which may include dashboards, data warehouses, data mining applications and online analytical processing (OLAP). These tools aggregate, synthesize and disseminate the high volumes of customer activities in visual, easy to consume views so that managers can learn from the information and take action to improve their companies.

For nearly a decade pundits have forecast that the next year will be the year that analytical software will achieve big growth. However, these forecasts might finally be coming true. For the year ended 2010, analytical CRM software grew over 20 percent, its biggest growth achievement ever, and now makes up 15 percent of the total CRM software market. Most research suggests that 2011 growth will continue to rise for CRM analytics.

Social CRM (sCRM) recognizes the change in customer relationship management—from vendor driven monologue communication broadcasts to customer driven two way dialogue. Social CRM includes the strategy, processes and online tools to engage customers in a dialogue that satisfies the customers' increasing requests for access to candid and transparent information while also providing suppliers with new channels for feedback, increased customer interaction and enhanced customer relationships.

The social CRM market barely made up 1 percent of the total CRM market only a few years ago. For the year ended 2010, social CRM tools and applications achieved 50 percent growth and now make up nearly 5 percent of the total CRM software market.

For the last decade, operational CRM has made up 90 percent of the total CRM software market, with analytical CRM software making up the next 9 percent and social CRM tools picking up the last 1 percent. However, the vastly different growth rates are clearly changing the overall mix of CRM software sectors. Analyst firms such as Forrester and Gartner suggest that over the next several years, operational CRM software will fall from 90 percent to 70 percent, analytical software will grow from 9 percent to 20 percent and social CRM tools will achieve the highest incremental gain from 1 percent to 10 percent.

However, even while recognizing a slower growth for operational CRM, its important to recognize that this CRM sector still makes up the vast majority of the software market and further, it is the platform for both analytical and social CRM tools. It's also likely that many of the operational CRM vendors will build or buy analytical and social tools, thereby effectively morphing or consolidating what are today three separate sectors into a single market.

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