Customer Relationship Management Market

Market Overview

The Customer Relationship Management Market size was valued at USD 57.87 billion in 2022. It is expected to reach USD 184.67 billion by 2031, growing at a CAGR of 13.76% during the forecast period (2023–2031).

Customer relationship management has evolved into a crucial component for many functions across multinational corporations. Social CRM advancements have made it faster and more accessible and added critical data on business analytics. Businesses embrace social CRM as an additional channel in their overall CRM software solutions. Social CRM is a social layer that sits on top of traditional CRM software solutions, offering businesses several benefits like increased transparency, improved business ideas, information communication, flexibility, and performance. Social CRM focuses on capturing customers' needs and creating value for them in a transparent business environment, helping companies establish customer engagements and increase their brand presence among customers.

Market Dynamics

Global Customer Relationship Management Market Drivers

Growing Popularity of Social CRM

Social CRM is anticipated to surpass SaaS as the market's next most popular feature as a result of changing customer dynamics. Organizations of all sizes must comprehend customer behavior. Given that many people spend a lot of time on social networking sites like Twitter, Facebook, Pinterest, LinkedIn, and Snapchat, among others, businesses have realized that these sites can be a great way to monitor how customers' behavior is changing and how they are interpreting information about goods and services. The use of various keywords, such as brand name and company name, helps businesses track and evaluate their reputation in the market.

Additionally, customers are receiving a lot of attention from businesses. Customer engagement is growing in importance as a component of CRM activities. The availability of specialized solutions for social listening, social management, social measurement, and social monitoring, among other things, is particularly encouraged by vendors. For instance, Zendesk announced a partnership with WhatsApp in November 2020 to enable businesses to interact with customers in real time, share information, and address inquiries about messaging services (Messenger and Instagram).

Growing Use of CRM in Healthcare and Hospitality

The healthcare and hospitality industry verticals both have many uses for CRM software. Healthcare organizations frequently have to manage sizable databases with vital patient data when managing patient care and offering health management services. A 360-degree view of the customer is something many organizations strive for to increase the efficiency of CRM system users. Therefore, it is crucial to have a secure platform to keep track of patient information and mobility and for other purposes like billing and appointment scheduling.

CRM software enables the automation of procedures like prescriptions and patient referrals while boosting customer retention. Hospitals are using customized dashboards to access vital data and deliver individualized care. Data breaches can be significantly reduced by encrypting sensitive data and limiting access to only licensed medical professionals and staff. Government initiatives and regulations to promote the adoption of healthcare IT and the growing focus of CRM providers on the development and commercialization of AI and analytics-powered advanced CRM solutions are some of the main factors propelling the growth of this regional market.

Global Customer Relationship Management Market Restraints

Growing Security Risks to CRM Stored Data

CRM software stores a significant amount of private and confidential information for both businesses and consumers. The system's crucial information includes credit card information, patient health data, sales data, financial information, corporate intelligence, and banking instructions. Organizations have serious concerns about the safety and security of such essential data. Governments worldwide are enacting strict data regulations like the General Data Protection Regulation (GDPR) and others to protect customer information further. The root of the issue for software providers is the rise in data breach incidents via CRM.

For instance, Microsoft Corporation collaborated with C3.ai and Adobe Systems, Inc. in November 2020 to create a sophisticated CRM solution that was Al-powered. Forecasting abilities are supposed to be improved by this upgraded offering. Such product introductions would aid businesses in anticipating security threats and preventing data loss. Additionally, these Al-powered CRM solutions boost security and add a layer of protection to an organization's network.

Global Customer Relationship Management Market Opportunities

Incorporation of New Business Models

CRM software is being used by businesses more and more to understand customer behavior. It enables companies to analyze data about customer interactions to enhance customer value, boost customer retention, and boost profit. Organizations have incorporated new business models to increase their customer base and improve the user experience. The ability of organizations to adapt to shifting market conditions and customer expectations is another area of focus. With the help of various e-commerce models, including e-retail, direct-to-customer (D2C), marketplace, and social commerce, incumbents in several industries and industry verticals are expanding their customer bases.

Regional Analysis

The global customer relationship management market is segmented into North America, Europe, Asia-Pacific, and LAMEA.

North America Dominates the Global Market

North America is the most significant shareholder in the global customer relationship management market and is expected to grow at a CAGR of 12.3% during the forecast period. The retail sector's increasing reliance on digital technology and consumer demand for individualized service foster regional market expansion. To pursue a customer-centric business model, businesses are embracing technologies like the cloud, the Internet of Things (IoT), and big data to support their digital transformation. Businesses are also implementing CRM programs to improve brand recognition and increase customer engagement. Major U.S. firms are investing heavily in customer relationship management to meet customer expectations. Additionally, there is an increase in customer relationship management solutions across the country as Canadian vendors use data to gain a competitive edge. The region's growing need for mobility is also driving up demand for CRM.

Europe is expected to grow at a CAGR of 13.9% during the forecast period. Several European companies have a multi-regional user base, which encourages multi-currency transactions. As a result, businesses are implementing CRM solutions to streamline the transaction process and provide customers with proactive support. Technological advancements, including the availability of data and insights needed to improve operational efficiencies through customized solutions, are anticipated to drive the U.K. customer relationship management market. For instance, the government unveiled its Shared Service Strategy in 2021. The initiative improves user experience while assisting businesses in becoming more efficient and spending less money. These initiatives are anticipated to fuel the region's CRM market's expansion.

Asia-Pacific is expected to grow significantly over the forecast period. The customer relationship management market in the Asia-Pacific region is expanding due to companies with headquarters in developed economies like the U.S. and Europe aiming to expand their geographic presence, particularly in developing economies like India and China. The Asia-Pacific region has a high concentration of small and medium-sized businesses which can benefit from CRM tools to improve customer service and gain a competitive edge. The CRM tools support lower costs, improved customer retention, and controlled lead communication. In addition, the BFSI and retail sectors in countries like India, China, and Japan are investing heavily in IT infrastructure in an effort to take significant market shares. This is a crucial element in the region's widespread use of CRM tools. For instance, the Chinese market is enormous and moderately complex because of the variety of cultures and the varying levels of customer maturity. As a result, Chinese vendors are implementing CRM solutions to satisfy customer demands.

Latin America and the Middle East and Africa is expected to grow steadily over the forecast period. It has been noted that the region is making significant efforts to support digital transformation, including deploying fiber throughout the region to improve customer connectivity. Brazil, Mexico, and other nations are observing a rise in consumer goods demand, driving demand for on-demand CRM services. The Middle Eastern region has a strong capital infrastructure that fosters IT growth. Leading retail and electronics brands are drawn to the area. This makes it necessary to provide services that improve the customer experience through CRM programs. In addition, small and medium-sized businesses are expanding quickly in economies like Turkey, Egypt, and Saudi Arabia. Many are implementing CRM solutions to gain insights for more accurate demand forecasting.

Segmental Analysis

The global customer relationship management market is segmented by solution, deployment, enterprise size, and end-user.

By Solution Analysis

Based on the solution, the global customer relationship management market is bifurcated into customer service, customer experience management, CRM analytics, marketing automation, salesforce automation, and social media monitoring.

The customer service segment is the highest contributor to the market and is expected to grow at a CAGR of 11.8% during the forecast period. Various brands and organizations can adopt customer service strategies to deliver the best service performance in real-time as a result of the growing significance of understanding customer behavior and preferences. In order to stay ahead of the competition and meet the demands of their customers, an increasing number of companies are turning to customer experience management tools. In addition, the growing adoption of digitalization, technological developments in cloud and artificial intelligence solutions, quick integration of multichannel touchpoints into a single platform, and growing demand for customer data analysis to derive business insights to boost revenue are some of the key factors driving the customer service market in the area.

In order to deliver the best service performance in real-time and stay ahead of the competition, many brands and industries have adopted customer experience strategies due to the growing importance of understanding customer demands and preferences. In addition to incorporating cutting-edge technologies like machine learning and artificial intelligence, various regions have adopted the newest tools like customer data analytics and real-time reporting. Additionally, the analytics component of the solution offers marketers the chance to forecast which customers are most likely to stop using and switch to a competitor's product.

By Deployment Analysis

Based on the deployment, the global customer relationship management market is bifurcated into on-premise and cloud.

The cloud segment owns the highest market share and is expected to grow at a CAGR of 15.6% during the forecast period. Organizations are increasingly favoring the cloud-based deployment of various CRM solutions because they are hosted on the vendor's server and can be accessed remotely from any location. Due to their accessibility and ease of integration, cloud CRM solutions are becoming more and more popular as AI, big data, IoT, and connected devices grow. These solutions provide several business advantages, including increasing employee productivity and improving customer engagement and retention.

For various operations, many businesses are switching from manual to automated systems. SelectHub's customer relationship management buyer survey revealed that some larger enterprise groups preferred on-premise deployment over cloud-based implementation. The demand for on-premise customer relationship management solutions has increased due to the growing demand for data privacy. On-premise solutions are now more in demand as a result of this. Additionally, the segment is likely to be driven by these large organizations' increasing investments in CRM systems during the forecast period.

By Enterprise Size Analysis

Based on the enterprise size, the global customer relationship management market is bifurcated into small and medium enterprises (SMEs) and large enterprises.

The large enterprise segment is the highest contributor to the market and is expected to grow at a CAGR of 12.4% during the forecast period. Due to the numerous operational departments found in large organizations, these organizations frequently use CRM solutions to combine customer data with business process management tools, allowing users to coordinate with their sales, marketing, and customer support processes. Additionally, it is anticipated that vendors providing scalable CRM features to meet the requirements of large organizations will fuel demand for CRM solutions in this market. For tasks like making strategic decisions, large multinational corporations require reliable monitoring solutions and automation capabilities. Furthermore, it is anticipated that the adoption of customer relationship management solutions will be fueled by the expanding applications of big data, artificial intelligence, and its applications in large enterprises.

The growing number of government initiatives via digital small and medium enterprise (SME) campaigns, such as video marketing, social media, and search engine marketing, are anticipated to fuel the segment's growth over the forecast period. The segment is expected to grow thanks to benefits like predictive lead scoring and the ability to anticipate customer needs across critical functions like sales, marketing, and customer service. Additionally, the growing demand for hosted services among small businesses will drive up the size of the customer relationship management market during the forecast period.

By End-Use Analysis

Based on the end-use, the global customer relationship management market is bifurcated into BFSI, retail, healthcare, IT and telecom, discrete manufacturing, and government and education.

The BFSI segment owns the highest market share and is expected to grow at a CAGR of 14.1% during the forecast period. Banking and financial institutions frequently use CRM because it improves the client experience. It provides many benefits, like customer segmentation, seamless customer communication, and ongoing access to the client database. The adoption of CRM is anticipated to be accelerated by banks' growing digitization to provide a consistent experience to their customers.

Competition in the retail industry is fierce, so businesses need sophisticated customer relationship management (CRM) software and online systems to provide their customers with the best possible service. The entry of new players into the retail market amid the long-established established players to leverage market growth. For competitive advantages like graphical user interface support, optimal resource utilization, and a decrease in overhead and high inventory costs, the retail industry is widely implementing digital marketing activities and tailored advanced IT business solutions. Additionally, the fiercer competition in the retail sector is fueling demand for CRM software, which is anticipated to grow significantly over the forecast period, along with online systems to help businesses offer their clients effective customer-centric services.

Recent Developments

• December 2022- In order to drive customer success on the Commerce Cloud, Salesforce announced it would add more than 250 commerce partner apps to AppExchange, the top enterprise cloud marketplace.
• November 2022- Act!, top marketing automation and customer relationship management (CRM) software provider for small and medium-sized businesses (SMBs), recently announced that Act! CRM is now accessible in the UK. Act! CRM, available in the United States in 2021, is an intuitive CRM and e-marketing solution that provides today's SMBs with critical customer management, calendar, pipeline, forecasting, reporting, and email marketing features.