North America CRM Analytics Markets

Customer retention and customer wallet-share growth are the most pressing pain points in business-to-consumer (B2C) industries such as financial services, telecommunications, and retail. It is essential for these enterprises to understand their most important customers and the strategies required to expand and maintain their customer base. Campaign strategies are shifting from product-centric, mass-marketing approaches that are more effective for aggressive new customer acquisition, to customer-centric, one-to-one marketing approaches that enhance customer loyalty. Marketing and customer analytics is central to effective customer segmentation that will enable enterprises to identify their best customers and determine the ideal tactics and strategies to maximize near-term and long-term customer value.

This Frost & Sullivan research service covers the North American CRM analytics markets. The study examines the key application markets across function and industry. It also forecasts market drivers and restraints and analyzes vendor solution offerings and strategies in a competitive framework.

The Changing Role of the Contact Center Drives Demand for CRM Analytics

As margins and differentiation on products is declining, companies are turning toward customer experience to drive competitive advantage and customer loyalty. The role of the contact center is evolving from merely servicing customers to playing a key role in customer retention and growth. Companies are increasingly integrating real-time analytics to support up-sell, cross-sell, and retention programs. Because of the sheer impact a real-time customer interaction can have on retention and growth opportunities, service analytics will be crucial in the CRM analytics market.

"Financial services and telecommunications represent the highest spending industry verticals in CRM analytics, contributing to about 50 percent of the North American CRM analytics markets in 2004," notes the analyst. "While customer wallet-share growth continues to be the hot button in the financial services industry, in the case of telecommunications, customer churn management is the primary driver for spending."

CRM Portfolios with Analytic Applications Set to Increase Market Share

CRM vendors, business intelligence (BI) & analytics vendors have adopted different approaches to CRM Analytics - top-down in the case of the former, and bottoms-up in the case of the latter. CRM vendors focus on providing pre-built analytics for their operational CRM applications, while BI & analytics vendors concentrate on providing tools for enterprises to build analytical capabilities ground up.

The CRM analytics market in North America grew by 15 percent from 2003 to 2004. The market for CRM vendors grew by 20 percent while the market for BI & analytics vendors grew by 11 percent over this period. While both groups have shown impressive growth rates, the CRM vendors have managed to capitalize the most from the opportunities that the market presented. "CRM vendors need to demonstrate credibility on the issue of data integrity by appreciating the heterogeneity of the analytics environment, while BI & analytics vendors need to improve CRM competencies for business decision makers," says the analyst.