- Customer relationship management startups are finding niches to compete with giants like Salesforce.
- Analysts see growing demand for industry-specific companies targeting small to medium-sized businesses.
- Insider has compiled a list of 13 CRM startups that are reinventing the industry according to VCs and analysts.
The market for software for interacting with customers and managing their relationships with a company is hot.
The global customer relationship management software market was worth $52.4 billion in 2021 and is expected to grow by approximately 13% over the next decade, according to a report from consulting firm Grand View Research.
Businesses depend on CRM software to manage customer data and relationships, which has become even more important during the COVID-19 pandemic and as businesses prepare for the market downturn. That’s because CRM software is meant to keep customers happy, which is critical when it’s harder to attract new customers, analysts say.
“The best way to retain your customers is to understand who they are and what you can do for them,” Kate Leggett, principal analyst at Forrester, told Insider.
But CRM is a mature industry, dominated by tech giants like Salesforce, SAP, Oracle and Microsoft who have been building and selling this software for decades, experts say. Nevertheless, there is room for new suppliers in some areas.
As a whole, CRM software is changing from just a data capture system to software designed as a productivity tool for salespeople. Innovations, such as tools to help salespeople automate tasks and communicate with customers across many platforms, are improving the way companies manage customer relationships.
For example, there is a growing demand for CRM companies that target small to medium-sized businesses and are industry specific. As more work becomes digitized, industries such as healthcare, financial services and manufacturing require specialized tools, analysts say.
Venture capital firms are also investing in integration tools that connect CRM companies with third-party apps, such as chatbots and analytics tools, according to Murat Bicer, a partner at VC firm CRV. This leads to new technologies that work alongside a CRM database, such as sales engagement, conversational intelligence, and chatbots.
“There are so many more tools that businesses can try and buy to better serve their customers,” Bicer told Insider.
To get an idea of hot CRM startups, Insider asked several analysts and VCs which companies were innovating in the space. As the definition of CRM continues to evolve, the list is not limited to customer databases. It also includes sales engagement tools, customer communication platforms, industry-specific tools, and machine learning products that integrate with CRM platforms.
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