Is Consolidation Coming in CRM

New York Skyline

Providers of CRM Software sure have a challenge on their hands. At last count there were more than 400 companies claiming to offer CRM systems across both horizontal and vertical industries. Of course many of them service a specific industry segment such as enterprise offerings, middle market systems and small business CRM, so not all 400 are competing with each other. But the question is how can all of these companies survive in this highly competitive market? The answer is they can’t. As a potential buyer of CRM software it is important to do some research about the CRM solution provider you are interested in. But this does not mean you should only select the most popular name or company out of fear. In fact, some of the most popular names may not have the best solution or the right one for your business. Microsoft for example is known by everyone, but their CRM solution has been known to lag behind several other pure play CRM providers such as Salesforce.com, SugarCRM and Commence CRM, all of which are high quality stable companies with very good products.

As the CRM market becomes more saturated we will begin to see greater consolidation and it will impact the low cost CRM solution providers first. Due to their low cost, these companies simply cannot afford to re-invest in their solutions or provide the level of customer service customers need in order to realize the maximum value from the CRM software. This also means that these low cost solution providers will struggle to remain competitive in this fast paced sector. This is already evident with many low cost online CRM solutions that may be purchased over the internet via credit card. What these companies are in effect saying is that due to their low cost, they cannot afford to talk with you or demonstrate their solution. I cannot blame them, but CRM stands for customer relationship management. How can these companies be selling a solution for managing customer relationships when they cannot afford to manage their relationship with you? Let me reiterate that this does not mean you should simply rule out these low cost solutions, but simply take the time to investigate the company you are buying from.

Image “New York Skyline” owned by William Warby (cc)

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