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CRM Software Survey Results
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future of crm What's The Future For Hosted CRM Software?

The Next Evolution of Hosted CRM Software Executive Summary

While the popularity of this survey was very high, so was the difficulty in garnering a consensus. It seems particularly difficult to predict the next evolution of hosted Customer Relationship Management (CRM) software solutions when the current evolution is still undefined and inmature in so many ways.

While there was no shortage of one-off predictions, the survey responses did identify three significant market evolvements for hosted CRM solutions.

First, the hosted CRM customer market would become more clearly segmented into multiple CRM markets. Currently, most respondants felt that all hosted CRM software companies try to sell across the board and to organizations of all sizes and types. Based on the prior host-based and client/server application evolutions, it is believed that hosted CRM solutions will become more identifiable as targeted to small business, middle market or enterprise organizations - but not all three (at least with the same CRM product solution).

Second, hosted CRM will evolve along vertical markets. While this is currently being witnessed for industries such as financial services, insurance, bio-tech and discreet goods, the current functionality and market depth is still relatively weak. However, over time vertical market depth and functionality will evolve and become a legitimate and differentiating competitive advantage for the SaaS environment.

Third, CRM users expect, and in many cases demand, a shift from data capture to data utilization. The current generation of hosted CRM software applications compare favorably to their client/server CRM predecessors in many ways, however, many hosted CRM systems do not yet provide the automation tools, system administration tools, customization tools and information analysis tools that act as the most significant drivers in generating return on investment (ROI).

While several respondants predicted wholesale hosted CRM market changes among the existing Software-as-a-Service CRM manufacturers, many more indicated that the hosted CRM companies today are only a small portion of the utlimately successful SaaS CRM companies of the future.

Although hosted CRM software publishers attracted the most survey response comments, several participants anticipated a greater adoption of primary CRM metrics to drive business growth. Several factors cited in developing a more focussed customer value approach included:

  1. The total value of each client relationship with your organization
  2. The potential value of each relationship with your organization
  3. The profitability of each relationship
  4. The insights prospects and customers can provide your organization
  5. The influence that each customer wields over other customers

By recognizing key metrics cited above for individual customers, customer classes and market segments, the organization can focus its resources on attracting, keeping and growing the right type of customers. This focus, in turn, will improve the productivity of the organization's CRM efforts and will position the company for improved innovation and growth.


On-Demand CRM Evolution Survey Synopsis
Respondants with direct knowledge of on-demand CRM solution:
On-demand CRM solutions identified:
Aplicor, NetSuite,, Salesnet, SiebelOnDemand
Overall satisfaction with current on-demand CRM systems:

Very satisfied: 36%
Satisfied: 39%
Not fully satisfied: 17%
Dissatisfied: 8%

Are current on-demand CRM systems ready for prime time? Yes 86%
No 10%
Unsure 4%
Most cited advantages with current on-demand CRM systems:

1. Low cost of entry (subscription pricing model)
2. Low risk
3. Fast implementation and time to production

Most cited disadvantages with current on-demand CRM systems:
1. Limited or difficult customization tools
2. No offline capability
3. Limited feature/functionality
Most cited predictions for future on-demand CRM systems:
1. Market will divide into more specific sub-markets
2. On-demand CRM software solutions with verticalize
3. On-demand CRM solutions will increase automation tools
Would you choose an on-demand CRM solution again? Yes 81%
No 11%
Unsure 8%

CRM Labs Survey Perspective
Software-as-a-Service (SaaS) CRM surveys are managed by volunteer participants who identify on-demand CRM interest topics, survey users, validate consolidated survey results and publish the on-demand CRM results for the online CRM community benefit. Survey topics, theories, results and conclusions are based upon and limited to the population of respondents that choose to participate and may or may not be representative of a larger marketplace. In order to achieve focus and create depth within a defined market niche, this community Web site and all CRM surveys are limited to Software as a Service (Saas) CRM solutions (also referred to On-Demand CRM, Utility Computing, ASP (application service provider) or Hosted solutions).

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