CRM Market Perspective From ISM Software Lab Director

By: John Chan, Director, ISM Software Lab

John Chan, who joined ISM in 1999 as the Software Lab Director, is responsible for software testing and defining the evaluation criteria for The Guide to Mobile and Social CRM and the CRM software offered on ISM’s Reviews Online service. He oversees the implementation of ISM’s Top 15 CRM Software Awards selection program. Prior to joining ISM, Chan conducted market research for Citibank and focus groups for US Airways as well as market research on email usage. He holds an MBA from Georgetown University and a BA with honors from Colgate University.

You work with dozens of companies with CRM–focused products and services, how has the CRM marketplace changed since 1999 when you joined ISM?

During the late 1990’s and early 2000’s, the CRM industry was not user friendly. There were exceptions, but overall, CRM application fees were very expensive and many buyers felt that they were not getting a ‘bang for their buck’. Users were looking for more functionality and subsequently were underwhelmed with the CRM product they purchased. This has changed for the better over the past decade. Not only have developers made CRM simpler to use and more comprehensive, but the overall price of CRM applications has become less expensive.

Over the past two decades, CRM has changed from just a customer database storage system to an all-around product that a company can use to manage every aspect of their business data. Companies can now use CRM software to continuously track their customers’ needs and wants. The CRM market numbers reflect this convergence. As an example, as of the end of 2012, the annual worldwide CRM market had multiplied more than eight times ($18 billion) compared to what it was 15 years prior, at the end of 1998 ($2.3 billion).

Many factors drove the CRM boom, but the enhancements of the Internet were far reaching. Companies unable to support a full database on premise could move to offsite storage on the Internet for an easier and cheaper investment. The emergence of mobile technology also boosted CRM offerings as companies give their staff easy access to data on the go.

The world of technology is ever changing. This is no different in the CRM marketplace. With new changes come new opportunities. One key issue of CRM software is whether it is hosted On-Premise or On-Demand. In my next blog post, I will cover the many advantages and disadvantages of the two, and how the customer can decide which one will be the better solution for them. If you have any questions or comments, please email me at johnc@ismguide.com or place these questions/comments within the comments section, which follows.