CRM market slowdown continues

Sales of customer relationship management (CRM) software have declined for the second year, according to research from Gartner. New software licence revenues worldwide fell 24.7% to $2.8 billion in 2002, down from $3.7 billion in 2001. Revenues declined 6.4% in 2001.

Gartner cites the slow economy and changes in buying patterns as major causes for the decline. “Smaller deals, tactical projects, longer sales cycles and heavy competition have caused CRM vendors to struggle,” says Tom Topolinski, vice president of Gartner’s worldwide software applications research group.

SAP and PeopleSoft were the only vendors among the top five to gain market share in 2002. SAP stayed in second place and its market share rose from 10.9% in 2001 to 15.9%. PeopleSoft’s market share rose from 3.9% to 4.3% over the same period, and the company climbed from fourth place to join Oracle at number three. Siebel maintained its substantial lead, but its market share fell from 28.5% to 24.9%.

The decline in new licence CRM revenue was global, but the largest market, North America, suffered the sharpest fall, at 27.6%. Western Europe fell 22.4% and the Asia/Pacific region dropped 15.2%.

  • Meta Group forecasts a brighter future for CRM in its evaluation of the CRM services market. It says that as the market matures, and in the light of increasing project successes and rising client awareness, the market will grow by 10-12% in 2003, and by 20% in 2004. CRM services include formulating strategy, choosing and implementing software, improving business processes, training and deployment.

    What wins customer loyalty?
    Source: Genesys Communications Laboratories

    Badly run customer call centres are infuriating customers and driving them away, according to a consumer survey commissioned by call centre software supplier Genesys Telecommunications Laboratories. The survey found that service is the key to winning and retaining customers. “Good service” was the most important criteria in winning the loyalty of 56% of respondents. Astonishingly, factors more commonly associated with consumer buying decisions trailed far behind: “good product” scored 28%, “good price” only 7% and “trusted brand” 3%. More than half of the consumers in the survey had stopped doing business with a company because of “a negative call centre experience”.

  • Avatar photo

    Ben Rossi

    Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

    Related Topics