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UNTAPPED MARKET AMONGST THE SMBs

The CRM market can have increased appeal among SMBs in India, if vendors develop appropriate messaging and position its products to suit the segment. /28

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COVER STORY

CRM MARKET

UNT APPED
AMONGST THE SMBs
The CRM market can have increased appeal among SMBs in India, if vendors develop appropriate messaging and position their products to suit the segment.
BY SANJAY MOHAPATRA
sanjay@smechannels.com

MARKET
limited awareness and understanding. Most SMEs think of CRM as a software that manages users, leads, pipelines, conversion and post sales communication but only a few know that it is much more than that. They are not technically advanced enough to understand fully and make the most of CRM, says Asheesh Pandia, Brand Management and Corporate Communications Consultant. Adoption rate is not very high as well. SMEs generally have limited budget and their IT infrastructure is very basic and as a result, CRM is usually placed on very low priority. Adoption is more likely as they grow, although they still prefer costeffective options. The lack of awareness and low adoption rate can be curbed with more aggressive training and education initiatives. For this segment, CRM is still a concept that is not considered to be particularly relevant in achieving short-term business goals. Sometimes SMBs deploy CRM to aid small tasks such as organizing customer database, help boost sales effort, reach out to customers for cold calls or email campaigns. In sum, small enterprise users have still not fully realized the benefits that a strategic roll out of a CRM deployment can have on its business. This is because SMBs are short of resources and preoccupied with the short-term goals such as managing operations, delivery issues, attracting manpower and retaining customers. Research has found that CRM adoption in India is mostly restricted to larger enterprises with adoption rates slipping as the size of the enterprise becomes smaller. However, CRM can have a significant impact on the business models of SMBs if they are able to align CRM strategically with business goals. For example, if the CRM deployment links the SMBs customer database with service delivery and has visibility across all team members serving customers, it will provide data and insights into the customers problem, how the customer is being served, how the problem was resolved and preempt offerings and solutions that will not only increase customer satisfaction but also provide opportunities to up sell and cross sell. The challenging economic environment has however made SMBs more open and sensitive

ustomer relationship management or commonly known as CRM is an overused concept. The concept has become mainstream in terms of usage, but curiously enough it has lagged behind in terms of deployment, implementation and manifestation. There is no standardization in CRM approaches. Consequently, even the most basic initiative such as organizing customers database is dubbed as a CRM deployment. Ideally, CRM should enable the organization to have a comprehensive view of the customer during all its interactions, so that the organization can understand the customers requirements and pain points and pre-empt solutions. Organizations that have evolved their CRM strategy call this customer experience management. Therefore, CRM is not a deployment but a strategy, which is ongoing and pervasive across the organization. While there is a certain level of understanding and maturity among large organizations but small enterprises are still a very underpenetrated segment as far as CRM is concerned. There is only

28 SME CHANNELS
FEBRUARY 2012

CRM MARKET

COVER STORY

THE INDIA CRM SOLUTIONS MARKET IS FORECASTED TO BE US$ 321.1 MILLION IN CY2012 TO US$ 531.2 MILLION IN CY 2015.
SOURCE: IDC

SME CHANNELS 29
FEBRUARY 2012

COVER STORY

CRM MARKET

MOST SMES THINK OF CRM AS A SOFTWARE THAT MANAGES USERS, LEADS, PIPELINES, CONVERSION AND POST SALES COMMUNICATION BUT ONL A FEW Y KNOW THAT IT IS MUCH MORE THAN THAT.
ASHEESH PANDIA, BRAND MANAGEMENT AND CORPORATE COMMUNICATIONS CONSULTANT

about the benefits of CRM. SMBs have realized the importance of thinking strategically about customer acquisition and retention. The business impact of having happy customers is not lost on SMBs, as the segment has learnt the value of viral marketing. SMBs also understand the long term impacts of building an enduring brand. Keeping all customers happy at all times is a hugely challenging task, and can be achieved only with the aid of appropriate technology tools. SMBs understand the challenges associated with building an efficient customer service system as well as adopting CRM tools that will help build visibility and enhance its brand. The SMB segment in India is a significant contributor to the Indian economy. According to government estimates there are about 13 million SMBs in India. Yet, technology vendors tend to ignore this segment and do not develop solutions that are appropriate for this segment. More importantly, the positioning and messaging of technology solutions for SMBs, specifically in the case of CRM, need to be very different from larger enterprises. Vendors need to focus the messaging on what problems a CRM solution is likely to solve for the SMB, instead of positioning it as helping to build customer relationships. For instance, a CRM deployment will likely to help an SMB manage its resources better while serving customers as improved internal processes will significantly enhance employee productivity.

The Market
The momentum in the CRM market is evident in the upbeat sentiments of market forecasts by analysts and vendors, which is based on customer responses and adoption rates. Large companies already have a CRM strategy and have deployed systems and aligned internal processes to maximize those deployments. With increasing globalization, customers have become savvy and

demanding and businesses have become hard pressed to streamline their operations in order to make the customer experience more fulfilling. Gartner says that the Indian CRM market size is the second largest market in Asia Pacific region after Australia, comprising about 15 percent of the overall APAC market. According to a recent Gartner report, the CRM market in India is forecasted to experience a growth rate of 17.4 percent between 2011-14. The market which stood at US$ 111 million in 2011 is expected to become US$ 179 million by 2014. Gartner also forecasts that 8 percent of all CRM spending in 2011 was in social CRM reflecting the maturity in CRM adoption trends. The on demand CRM market is also expected to maintain healthy growth rates. Gartner estimates that on demand CRM which comprised 24 percent of the market in 2009 is likely to touch 32 percent by 2015. According to IDC Asia Pacific Semi Annual Software Tracker Report, the India CRM solutions market is forecasted to be US$ 321.1 million in CY2012 to US$ 531.2 million in CY 2015. Between 2008 and 2013, CRM in India is expected to grow at a CAGR of 12 percent. According to Frost & Sullivan the CRM market is expected to experience a CAGR of 1619 percent between 2008 and 2014. Organizations today consider their customers to be assets, and this has become a major focus area amongst companies. Organizations are investing heavily in enhancing customer satisfaction and building relationships with customers. This is true among SMBs as well, which is definitely a growth driver in the Indian economy. The segment that was hitherto restrained by lack of access to technology, exposure to geographies is looking at technology as an enabler like never before. What is interesting is the way many SMBs are engaged in preparing a comprehensive technology roadmap for the future complete with

WHAT IS INTERESTING IS THE WAY MANY SMBS ARE ENGAGED IN PREPARING A COMPREHENSIVE TECHNOLOGY ROADMAP FOR THE FUTURE COMPLETE WITH MUST HAVE TECHNOLOGIES, PLATFORMS AND IT INFRASTRUCTURE.
RAJ MRUTHYUNJAYAPPA, SENIOR VICE PRESIDENT & MANAGING DIRECTOR, APAC & EUROPE, TALISMA CORPORATION must have technologies, platforms and IT infrastructure, says Raj Mruthyunjayappa, Senior Vice President & Managing Director, APAC & Europe, Talisma Corporation. The major areas of investment for CRM include online channels, SaaS-based deployments and technologies that enable customer loyalty management as well as focused levels of customer services. Also, expenditures related to social software to support sales, marketing and customer service processes are expected to exceed $1 billion worldwide by 2013, according to Gartner. The demand for CRM will come from both the large enterprises and SMEs. Adoption has mostly been amongst organizations in tier one cities but the next phase of growth is likely to witness adoption in tier two cities as well. Most CRM companies are deploying traditional and new media to reach out to the market. Vendors are also deploying new marketing channels such as online semi-

30 SME CHANNELS
FEBRUARY 2012