On-Demand CRM Is in Demand

Among mid-market companies — those with 500 and 999 employees — nearly 50 percent want to adopt on-demand CRM software, according to a Yankee survey. One-third of mid-size businesses (100 to 499 employees) are looking to do so.

There is no question that on-demand CRM software is popular among larger companies. These are the organizations that led the charge into CRM in the first place, and then found that the projects were much more expensive and unwieldy than they anticipated.

Their cost-cutting imperatives drove the early success of vendors like Salesforce.com.

On-demand vendors have been turning a hungry eye toward smaller companies for some time, though. Many studies have predicted that uptake for CRM software among mid-market companies and their smaller counterparts will be impressive over the next couple of years.

The challenge will be balancing attention to price with performance and ease of use, said Yankee Group’s Sheryl Kingstone. But, in the end, the availability of on-demand alternatives will indeed help CRM penetrate the mid-size and small business markets.

Desire Precedes Demand

Among mid-market companies — those with 500 and 999 employees — nearly 50 percent want to adopt on-demand CRM software, according to a Yankee survey. One-third of mid-size businesses (100 to 499 employees) are looking to do so.

Small and very small businesses also are looking to on-demand software as a way to gain access to sophisticated functionality without breaking the bank.

Just over one-third of companies with between 20 and 99 employees report considering on-demand CRM software, as does 22 percent of even smaller businesses.

Moving Up the Line

Interestingly, the relatively new marketing-automation software niche is getting almost as much play from the middle of the company-size scale on down.

In the small business category, an even higher proportion — nearly 40 percent — of companies indicate that they would like access to on-demand marketing-automation software.

Still, on-demand CRM software is relatively expensive for small companies compared to tried-and-true shrink-wrapped applications, such as Best Software’s ACT, said Kingstone.

Companies that need specialized functions — such as those looking for advanced analytics, for example — are more likely to make the jump. Those with employees distributed across various geographic areas also are likely buyers.