The South African customer relationship management (CRM) services market can expect a 26% combined annual growth rate, putting this market well ahead of the average IT market growth rate, and beating the 22% average of global CRM revenue.
According to the first report on the CRM market conducted by local research house BMI-TechKnowledge, the market is in its infancy, but promises the potential of great growth. As a new IT paradigm, however, it still has some obstacles to overcome before it can achieve its potential. "We are in the very early stages of CRM. The market is just starting to unfold," says Brenda du Plessis, BMI-T analyst.
One stumbling block is the difficulty in assessing return on investment. More aggressive CRM adoption will take place when early implementers can reference more implementation successes and prove the worth of the CRM technology. However, the business drivers are already clear. Most CRM early adopters have implemented the technology to help them retain customers, with cost savings and gaining new customers as close seconds. This strategy shows the realisation that retaining a customer costs a third of the price of sourcing a new one.
Another obstacle the CRM market will have to overcome is a change in company culture. CRM requires different departments to work together, while another potential problem is deciding who within the company "owns" the customer.
Interestingly, not all those who consider themselves as early adopters have actually managed to implement a full CRM solution, but rather have installed only some of the required CRM components, such as a call centre or data warehouse.
"What many don`t understand is that CRM is a philosophy, not only a technology," says Du Plessis. It will be up to the various CRM service providers to link technologies and offer consulting to bring CRM to fruition. However, 45% of corporates believe they can implement the technology themselves, meaning that massive education is required within the industry. BMI-T says those who are embarking on this project in-house underestimate the complexities and scope of implementing a holistic CRM solution.
Meanwhile, the various vendors had best improve mind share if they want to convince customers to partner with them in a CRM endeavour. Siebel, the leading CRM application, has a mere 3% mind share, with Dimension Data/SPL known as service providers worth considering by 16% of the respondents.
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CRM is defined by BMI-T as customer care processes and systems that help companies attract, retain, service and expand relationships with customers in order to generate business benefits and to improve the customer experience. These systems and processes typically involve customer interaction centres, market automation, online customer service and sales force automation.