- Salesforce is the leader of customer relationship management (CRM) software, holding 18.4% market share (though Microsoft is steadily posing greater competition with its own CRM software, Dynamics 365).Â
- However, because Salesforce targets large enterprises, CRM companies that cater to small and medium-sized businesses are thriving.Â
- Business Insider asked venture capitalists and analysts to name CRM firms that are competing with behemoths like Salesforce and Microsoft â€” here are the 16 they recommended.Â
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When it comes to customer relationship management (CRM) software, Salesforce is usually top of mind. Two decades ago, the cloud giant pioneered new way to deliver software over the cloud via subscriptions, changing CRM software forever.Â
Even now it has an iron grip on the market, holding a 18.4% share as of 2019, according to a report from IDC. By contrast, other large players like SAP, Oracle, Microsoft, and Adobe have single digit percentages (although Microsoft is aggressively investing in its own cloud-based CRM application, called Dynamics 365).Â
CRM software generally includes customer-facing tools for divisions like sales, customer service, and marketing and has traditionally served as an electronic Rolodex-of-sorts for a company’s customers. But the software is quickly evolving, said a senior research director at Gartner, Brian Manusama.Â
Nowadays, companies don’t want their CRM systems to simply help their own employees, but also to make their overall customer experiences smoother and simpler, too, Manusama told Business Insider, by, for example, providing tools to automate online problem-solving processes for customers. As automation capabilities become standard for modern CRM systems, that often means integrations with outside applications or social media.
Salesforce is primarily built for large enterprise customers, so smaller CRM startups have popped up to cater to small and medium-sized businesses, Bessemer Venture Partner’s Alex Ferrara told Business Insider. Also, because CRMs encompass a wide range of tools and software, many companies start in one category â€” sales, services, or marketing â€” and then expand outward from there.
“I think most modern organizations today want all of their employees to have access to customer data,” partner at venture firm CRV, Murat Bicer, told Business Insider. “It’s not just sales anymore.”
As the pandemic pushed businesses to digitally transform faster than ever, modern CRM software is critical to helping them stay connected with customers.Â
Business Insider asked venture capitalists and analysts to name smaller CRM companies competing with behemoths like Salesforce and Microsoft. They named both innovative startups and smaller companies that are growing in popularity.Â
Some of these smaller companies could also be acquisition targets for big cloud firms looking to improve their own capabilities. For example, Facebook said in November that plans to acquire customer service startup Kustomer â€” reportedly for $1 billion.Â
Here are 16 customer relationship management companies that experts say to watch in 2021:
(All private company funding amounts and valuations taken from Pitchbook.)