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The global customer relationship management market size was USD 52.64 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with CRM witnessing a negative impact on demand across all regions amid the pandemic. Based on our industry analysis, the global market exhibited a significant growth rate of 10.1% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 58.04 billion in 2021 to USD 128.97 billion in 2028 at a CAGR of 12.1% during the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Customer relationship management (CRM) is software that manages and monitors the business operation to improve customer experience. The growing implementation of advanced technologies such as artificial intelligence, the internet of things (IoT), connected devices, and big data are expected to fuel the demand for software. Similarly, the introduction of cloud-based CRM software is likely to gain traction owing to its ease of accessibility and integration. For instance, in March 2021, outdoor power equipment supplier, Rotary Corporation, announced the partnership with the cloud-based CRM provider Workbooks to enhance operations and reduce cost.
Surging Remote Location-based Employees and Clients to Drive Growth amid COVID-19 Pandemic
The COVID-19 crisis has massively impacted businesses across the globe owing to the disturbance in manufacturing units, supply chain, labor and employee availability, temporary shutdown of cross-country boundaries, among others. This led the businesses to implement work from home policies. Despite lockdown, various companies commenced their operations from remote locations. However, to provide seamless collaboration between employees and customers, the businesses experienced high demand for customer support solutions.
CRM solutions provide real-time communication in a meaningful way that supplements and enhances conventional connections through phone and e-mail. With the implementation of the software, the companies can reach out to their customers and provide tailored customer services as per the requirement. During the pandemic crisis, the software supported the companies in real-time tracking and automated solutions to enhance the customer experience. The industries such as retail and consumer goods, BFSI, and healthcare highly adopted these solutions during the lockdown. For instance, healthcare workers in the United States and the UK adopted the Salesforce Health Cloud CRM solution for online record-keeping of the tested patients. Thus, post-pandemic, the customer relationship management market is expected to gain remarkable growth.
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Integration of Artificial Intelligence to Propel Potential Market Opportunities
The implementation of artificial intelligence across digital technologies is growing rapidly worldwide. Similarly, the demand for integrating AI with customer relationship management systems is increasing rapidly to further improve the customer experience. As per the report of Salesforce, Inc., and IDC, an AI-powered CRM system is expected to offer a competitive edge to the users.
AI technologies such as machine learning, deep learning, and natural language processor help the CRM software in understanding the emotional state of the customer. Using this data, the software manages and offers solutions to the customers, thus, helps in building strong relationships. For instance, AI-powered CRM offered by Salesforce’s Einstein and Zoho CRM’s Zia offers voice command technology to gain customer information. Similarly, virtual assistants and bots are using this technology to reduce human errors and to offer automated responses to customer reports, data capture, emails, and more. Thus, the integration of AI technology is expected to boost the market growth in the forthcoming years.
Rapid Digital Transformation to Drive Market Growth
Digital transformation is the integration of digitally advanced technologies across all the business areas to boost operations and value delivery to the customers. This shift from the traditional base is forcing companies to adopt new business models and market trends. The insights collected from the constantly connected technology helps in offering a better customer experience after proper data analysis.
As per the report of PWC Experience Center, half of the enterprises cited that the digital transformation helped in improving customer satisfaction. However, as per the 2019 white paper of Infosys Limited, almost half of the Fortune 500 enterprises are expected to vanish as these companies could not keep pace with the ongoing digital shift. Thus, in the process of shifting towards customer-centric services, businesses are implementing a CRM system.
Rapid digital shift significantly relies on customer relationship management and other integrated technologies that offer enhanced customer satisfaction. This smooth transformation improves the customer journey by offering a superior customer experience across all touchpoints of communication. Thus, to effectively implement digitization, the demand for CRM software is likely to grow, which will bode well for the global customer relationship management market growth in the forthcoming years.
Increasing Security Threats over CRM Stored Data May Hamper Growth
The CRM software stores a massive amount of personal and private data of organizations and customers. The customer relationship management system carries crucial information such as corporate intelligence, credit card information, financial information, patient health data, sales data, and banking instructions. The safety and security of such highly confidential data is the major concern for enterprises. Also, governments across the globe are introducing strict data regulations such as General Data Protection Regulation (GDPR) to secure customer information.
The growing data breach incidents through CRM are creating several issues for the companies with software. For instance, in January 2021, the UScellular witnessed a data breach after the hackers gained access to the company’s CRM software. The hackers gained the name, PIN, address, service plan, cell phone numbers, and billing/usage statements of the customers. Thus, the growing attacks through the CRM system are expected to hinder market growth.
Increasing Demand for Software among SMEs to Drive This Segment’s Growth
Based on the component, the market has been bifurcated into software and services.
The software segment is likely to dominate during the forecast period. The CRM software centrally manages the customer data and accordingly automates sales and marketing strategies. The software has witnessed unprecedented growth among SMEs, mainly attributed to the increased demand to manage customer experience and retain potential customers.
The services segment is expected to showcase the highest CAGR during the forecast period. The services offered by the companies include professional expertise to maintain the client's business operation.
Ease of New Technology Integration to Surge Demand for Cloud-based CRM Software
The deployment criterion has been further divided into cloud and on-premises.
The cloud-based software is expected to dominate during the forecast period. The cloud-based deployment offers quick and real-time access to data that helps in enhancing customer satisfaction. Moreover, it can be accessed from any device, enabling users to view customer details at the same time. The market for cloud-based customer relationship management software is driven by the increased product demand among small and medium-sized businesses as it offers various advantages, such as cost efficiency, accessibility, and virtually no equipment costs.
Owing to the increasing IT funds and requirements, the demand for on-premises-based software is likely to gain traction.
Increasing Number of Customers among Large Enterprises to Fuel the Segment’s Growth
By enterprise size, the market is categorized into large enterprises and small and medium enterprises.
The large enterprise segment is expected to account for the largest market share during the forecast period. The growing challenges in managing and monitoring the overall performance are driving large enterprises to invest in this software. Large enterprises have emerged as the largest business participant due to the high marketing and IT expenditures capacity and the need to handle a high volume of customer data.
The small and medium enterprises segment is expected to grow at a rapid CAGR during the forecast period. The rising competition to gain more customers is forcing SMEs to focus on providing better customer experience and relationship maintenance.
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Growing Focus on Increasing Customer Base to Drive CRM Demand in Lead Generation & Customer Retention
By application, the market has been segmented into marketing and sales automation, customer management, lead generation and customer retention, customer support and contact center, and others.
The lead generation and customer retention segment is projected to account for maximum market share during the forecast period. The digital transformation across the industries is driving the companies to implement CRM software. The businesses are witnessing a significant rise in service and product inquiries, and the implementation of the software is likely to support the lead generation process.
The customer support and contact center segment is anticipated to gain a significant share of market revenue. The real-time analysis of the software is enhancing the customer support and contact center capabilities in handling the clients.
The marketing and sales automation segment is likely to gain rapid growth during the forecast period owing to the increasing focus of enterprises on marketing and sales. The data analysis provided by CRM software helps the large and small enterprises in executing marketing strategies, promotional events, gain customer insights and preferences.
Digital Shift in BFSI to Boost This Segment’s Growth
Based on verticals, the market is categorized into banking, financial services, and insurance (BFSI), manufacturing, IT and telecommunications, retail and consumer goods, healthcare, transportation and logistics, others.
The banking, financial services, and insurance (BFSI) segment is likely to experience exponential growth in the market. The BFSI industry is witnessing a rapid shift towards digitalization and thus requires customer-specific software. The growing online banking services are also likely to fuel the demand for customer relationship management software to gain and maintain loyal customers.
The services provider industry such as IT and telecommunication is also adopting CRM software to manage its massive client base. The industry is implementing the software to understand the client requirement and general market trends.
The retail and consumer goods segment is expected to gain significant growth during the forecast period. The growing online shopping platforms and mobile application is offering huge customer data to the companies. To understand the business growth, market trend, customer requirement, and experience, these retail companies are shifting towards CRM software.
The healthcare industry is expected to showcase a steady growth in the adoption of CRM software. The industry deals with massive, private, and confidential data sets of its customers requiring CRM software for its management and monitoring. The increasing use of connected medical devices is expected to surge the demand for the software. Also, CRMs real-time support helps the healthcare provider in accessing the data quickly and reduces the chances of casualties.
North America Customer Relationship Management Market Size, 2020 (USD Billion)
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By region, the market has been analyzed across five major regions, namely North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.
North America is expected to dominate the global customer relationship management (CRM) market share during the forecast period. The rapidly growing businesses and competition amongst the service providers are expected to fuel the demand for the software. Furthermore, the increasing implementation of advanced technologies is providing a vast set of customer preferences data and real-time prediction capabilities. The United States is likely to lead the region during the forecast period owing to the presence of a vast number of retailers in the country. Likewise, a significant presence of key players in the country is likely to drive market growth.
Europe is expected to hold the second position in the market during the forecast period. The rapidly increasing small and medium businesses across the European countries are likely to surge the demand for customer relationship management to obtain customer preferences and insights. Large enterprises are focusing on gaining knowledge of constantly evolving customer behavior for future marketing and business strategies.
The market in Latin America is likely to showcase steady growth during the forecast period. The rising industry sectors such as BFSI, healthcare, and retail in the region are factors contributing to the market growth.
Asia Pacific is expected to gain rapid growth during the forecast period. The rising retail industries and the massive adoption of advanced technologies are driving the demand for customer relationship management software. Also, countries such as China, India, Southeast Asia, Japan have different sets of demographics such as population size, density, age structure, and more is fueling the demand for software in service-providing industries of these countries.
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The Middle East and Africa is likely to gain significant growth owing to the rapid adoption of digitalization and advanced technologies across the industries. The growing government focus on customer data safety and better experience are likely to surge the market growth.
Key Players Are Entering into Strategic Partnerships to Expand Their Global Businesses
The CRM vendors of the market, such as SAP SE, Salesforce.com, Inc., Oracle Corporation, IBM Corporation, NetSuite, Inc., Infusion Software, Inc., and Copper CRM, Inc., are providing innovative offerings due to substantial developments in emerging technology. These players are keen on offering customer experience enhancement solutions for small and large enterprises.
Similarly, on the other hand, some players continue to enter into strategic partnerships with several other players to strengthen their market position and achieve strong brand advertising. Through partnership and collaboration, the players are offering advanced and efficient solutions.
An Infographic Representation of Customer Relationship Management (CRM) Market
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Key insights provided in the global customer relationship management market report are the adoption trends of CRM software and solutions by individual segments, recent industry developments such as mergers & acquisitions, consolidated SWOT analysis of key players, partnerships, Porter’s five forces analysis, and business strategies of leading market players, key industry trends, macro, and micro-economic indicators.
Value (USD billion)
Component; Deployment; Enterprise Size; Application; Vertical and Region
By Enterprise Size
Fortune Business Insights says that the global market size is set to reach USD 128.97 billion in 2028.
In 2020, the market value stood at USD 52.64 billion.
Registering a CAGR of 12.1%, the market will exhibit steady growth in the forecast period (2021-2028).
By component, the software segment is expected to lead this market during the forecast period.
Rapid digital transformation is the key factor driving the growth of the market.
SAP SE, Salesforce.com, Inc., and Oracle Corporation, IBM Corporation, NetSuite, Inc., Infusion Software, Inc., and Copper CRM, Inc. are some of the major players in the global market.
North America dominated the market in terms of share in 2019.
Asia Pacific held the highest CAGR in the market.
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