In Peter F Drucker’s words, the purpose of business is to create and keep a customer. Every businessman understands the truth of these words. Today, when businesses are scrambling to get customers, the importance of Customer Relationship Management (CRM) must not be ignored. That’s why analysts, vendors, and solution providers are positive about the growth of CRM in the country.

Analysts have come out with skyrocketing figures about the growth of CRM in India.
In Gartner’s view, the Indian CRM market size is about 15 percent of the overall APAC market, second largest in the region, after Australia. Between 2008 and 2013, CRM in India is expected to grow at a CAGR of 12 percent. Asif Gani, Research Analyst at Frost & Sullivan, says, “The projected figure of CRM market for 2008–09 will be around $45 million. It is expected to grow at a CAGR of 16–19 percent from 2008 to 2014.” Agrees Yanna Dharmasthira, Research Director-Gartner, “In the next five years, India is projected to have the second highest CAGR after China as far as CRM is concerned.” Gartner has significantly revised the growth rate of the Indian CRM market, specifically for the year 2009 in which it is expected to reach $80.3 million.

According to analysts, CRM has gained prominence over ERP. Sushant Dwivedy, Director-Microsoft Business Solutions, says, “Initially, they were packaged together as one solution. However, today, we are seeing a demand for CRM as a separate solution, one which is not dependent on ERP anymore.”

Boon or Bane?
Every business has its set of drivers and inhibitors. However, interestingly enough for CRM, economic slowdown is proving to be both a boon and a bane.While the market for this solution has definitely taken a hit because of the current industry slowdown, its need is being felt more and more.

As Ranjan Chopra, CEO, Team Computers, says, “In times like these, customer experience is of utmost importance. A CRM solution is therefore necessary as it adds to that experience and gives an accurate feedback to the vendor.” Maninder S Gerewal, Managing Director, Religare Technova, affirms, “The primary driver is the need to change tracks to be able to grow in the current economic environment. The growth in the previous years meant focus on increased production and enhancing services delivery. This focus has now changed to customer need and customer retention and the ability to cross-sell in an identified target customer base.”

Thomas Abraham, Managing Director, Sage, believes that market size would double in the next three years. Gani of Frost & Sullivan feels organizations implementing CRM have a competitive advantage by providing customer intelligence that helps understand the customers better. “The ability of CRM to eliminate wastage and cost optimization is helping organizations during the downturn. Overall, this reduces the cost of customer acquisition or maintenance,” he explains. “However, since the last quarter of 2008, the CRM market has started to feel the impact of the economic slowdown in India,” adds Gani.

Growth Drivers
According to Ramaswamy Rajgopal, Senior Vice President, CSC India, most organizations have implemented a customer strategy to have a 360 degree view of the customers across the enterprise and all the products that the enterprise produces. “For example, in the telecom space, the entire service management is automated with CRM. This includes acquisition of customers through call centers, service management, and billing. Similarly as the insurance industry diversifies its portfolio, the CRM application provides an effective way to enable cross-selling as well as provide a single point of customer contact to the enterprise,” he adds. Most packaged applications today offer solutions that address the specific industry needs with robust analytics allowing for end-to-end customer management.

Dwivedy of Microsoft says, “Today, getting new customers is a problem. Retaining them is even more hard, which is in direct proportion to the growth factor of CRM.” For Team Computers’ Chopra and Religare’s Grewal, one factor driving the growth of CRM is the need for the companies to optimize marketing spend and deliver offerings in a more defined manner.

“For example, in the auto industry, cross-selling has been happening between sales, financing, and insurance, and, to some extent, after-sales. The advent of vendor/brand agnostic service agencies will mean increased competition and obviously companies having more customer awareness will win,” adds Grewal.