CRM is expected to grow at a steady pace, and CRM customers are sending some specific signals about the functionality they need.
Thirty-seven percent of small-and-medium-sized businesses that participated in its annual survey want an integrated suite of multiple CRM applications, Software Advice reported last month. That’s up from 7 percent in 2013.
Another noteworthy shift is the increase in confidence among buyers that want a cloud-based system, which now stands at 74 percent, up from 48 percent in 2013.
“Those are very significant jumps,” said Craig Borowski, market researcher at Software Advice.
While the size of the increase is somewhat surprising, the actual trend is not, he told CRM Buyer. “It is a reflection of the advanced nature of software development, as well as the growing sophistication of many small businesses.”
A Bifurcated Market
There are still many small businesses that have not jumped on the technology bandwagon, though.
Fifty-three percent of participants in “Software Advice Small Business BuyerView | 2014,” which was expanded to include companies in the UK and Australia, said they used manual methods, such as spreadsheets or paper, to manage customer relationships. Fewer than one-quarter used an off-the-shelf, commercial CRM product.
This trend is a longstanding one in the CRM industry. It reflects the bifurcation among small businesses, with one group sticking to manual methods and the other moving to adopt more and more software, especially as it becomes easier to use and scalable for their operations.
The cloud has played a role in boosting interest, Borowski said — and that influence appears to be gaining strength as more small businesses become comfortable with the Software as a Service delivery model.
SaaS has the advantage of being both cutting-edge and cost-effective.
“For years, sophisticated enterprise-type software functionality was priced out of SMBs reach,” Borowski said.
Somewhere between the SMBs that are using paper and pen and the companies that are adopting SaaS systems, there is a middle ground of SMBs that are patching together CRM-related functionality.
This smaller percentage of buyers report using email clients, such as Microsoft Outlook, standalone email marketing software, industry-specific software or point-of-sale systems.
SFA vs. Suite
Nearly all CRM buyers — 88 percent — want a sales force automation application, according to the survey, while only 10 percent want a customer service application. This may be a reflection of the increasing sophistication of SFA applications, which now routinely come equipped with analytics and advanced reporting functions.
For example, of those wanting an SFA application, 82 percent reported that interaction tracking was the most important feature, especially the ability to log notes and conversation.
That said, SMBs currently are more likely to want an integrated CRM suite, the survey found. Some 62 percent told Software Advice they wanted to purchase a single, best-of-breed CRM application this year.
“There is a growing recognition that all stages of the sales cycle are interconnected, and the software must reflect that,” Borowski said. “Companies realize that they cannot sell a product and then not track or address problems or issues that occur afterward.”
There are nuggets of data points in Software Advice’s survey that suggest small businesses want customer service functionality embedded in the larger sales process. Most of the companies seeking an integrated CRM suite, for example, specifically said they wanted a pairing of related SFA and marketing automation.
Social Media Drivers
The rise of social media has much to do with the dramatic shifts in these trends — most of which have been brewing in the SMB space for a long time.
Social media’s growth, together with SMBs’ realization that they must become current with social channels, Borowski suggested, could account for some of the dramatic jumps seen in the cloud-based and suite metrics.