GROWTH OF CRM MARKET IN INDIA:

In Peter F Drucker’s words, the purpose of business is to create and keep a customer. Every businessman understands the truth of these words. Today, when businesses are scrambling to get customers, the importance of Customer Relationship Management (CRM) must not be ignored. That’s why analysts, vendors, and solution providers are positive about the growth of CRM in the country.

Analysts have come out with skyrocketing figures about the growth of CRM in India. In Gartner’s view, the Indian CRM market size is about 15 percent of the overall APAC market, second largest in the region, after Australia. Between 2008 and 2013, CRM in India is expected to grow at a CAGR of 12 percent Gartner has significantly revised the growth rate of the Indian CRM market, specifically for the year 2009 in which it is expected to reach $80.3 million.

According to analysts, CRM has gained prominence over ERP. Sushant Dwivedy, Director-Microsoft Business Solutions, says, “Initially, they were packaged together as one solution. However, today, we are seeing a demand for CRM as a separate solution, one which is not dependent on ERP anymore.”

Growth Drivers:

According to Ramaswamy Rajgopal, Senior Vice President, CSC India, most organizations have implemented a customer strategy to have a 360 degree view of the customers across the enterprise and all the products that the enterprise produces. “For example, in the telecom space, the entire service management is automated with CRM. This includes acquisition of customers through call centers, service management, and billing. Similarly as the insurance industry diversifies its portfolio, the CRM application provides an effective way to enable cross-selling as well as provide a single point of customer contact to the enterprise,” he adds. Most packaged applications today offer solutions that address the specific industry needs with robust analytics allowing for end-to-end customer management.

Dwivedy of Microsoft says, “Today, getting new customers is a problem.  Retaining them is even more hard, which is in direct proportion to the growth factor of CRM.” For Team Computers’ Chopra and Religare’s Grewal, one factor driving the  growth of CRM is the need for the companies to optimize marketing spend and deliver offerings in a more defined manner.

“For example, in the auto industry, cross-selling has been happening between sales, financing, and insurance, and, to some extent, after-sales. The advent of vendor/brand agnostic service agencies will mean increased competition and obviously companies having more customer awareness will win,” adds Grewal.

Inspite of the economic slowdown, the CRM (Customer Relationship Management) market in India witnessed a healthy growth. IDC expects the CRM software market to grow at a CAGR (compounded annual growth rate) of 40 per cent to reach Rs 188.4 crore in 2006. The CRM services market is expected to grow even faster at a CAGR of 53 per cent to reach Rs 377 crore by the year 2006.

The CRM market in India is in the initial phase when there would be high demand for consulting services in order to bring a fit between the business and CRM application and also around deployment and implementation of the same. Organisations have started using 'Service Quality' as a key differentiator and are using it as their USP to increase revenues and to gain market share and that's precisely the reason why CRM has been hot in service verticals like financial and telecom services. 

According to Kapil Dev Singh, Country Manager, IDC India," Unlike ERM, which is top-driven and therefore faces a lot of inertia, CRM initiatives in most organisations are driven by the actual users (Customer Support Department, Sales Function, etc.). Further, the implementation cycles for CRM are shorter and automation of CRM related processes have a direct impact on a company's profitability. Therefore more and more Indian enterprises are expected to invest in CRM solutions to provide improved services to the customers and drive CRM market." 

This is supported by the fact that four out of five companies are spending on modular CRM (i.e point solutions). According to IDC's end-user survey conducted among 200 organisations, nearly 81 per cent stated that they are using modular CRM, while 19 per cent stated that they are using complete CRM package. The CRM applications that are primarily used are marketing automation closely followed by customer care and support automation.

According to the survey, the key business drivers for investing in CRM solutions are customer retention & loyalty and improving cost efficiencies. Another important reason that emerged for CRM adoption was to make sales force management more effective. This shows that Indian businesses are beginning to feel the heat from increasing competition and are actively trying to retain their loyal customer base.