European CRM Services Market to Hit the $34 Billion Mark by 2004, IDC Says

AMSTERDAM – JUNE 22, 2000 – Customer relationship management (CRM) services activities, consisting of consulting, implementation, operations management, training, and support, represented a $9.4 billion market in Europe in 1999. The market will reach $34 billion by 2004, approximately 29% of the total worldwide CRM services market. The United Kingdom was the largest market for CRM services in Europe, but IDC expects that by 2004, Germany and France will be neck and neck with the United Kingdom. These three countries represented 63% of the European CRM services market in 1999, and IDC expects these regions to remain stable till 2004.


"The attention to detail on the customer and management is becoming increasingly blurred; the real focus is on relationships and how to maximize value and maintain loyalty," said Rasika Pradhan, senior analyst for IDC's European CRM Services research. "This is one of the reasons CRM training is predicted to experience strong growth. Many CRM initiatives fail due to lack of adequate training. Too much emphasis has been put on training on the tools and technology, rather than on how to use these tools to reach, build, and retain relationships with the community at large – whether it be building relationships with customers, partners, suppliers, or colleagues," Pradhan added.

Today, more than ever before, customers have an enormous variety of products and services they can choose from while additionally having a choice of channels to actively interact with the company. "While the fastest-growing preferred channel in the Western European business and consumer communities is the Internet, traditional channels such as phone, fax, mail, and face-to-face contact require serious attention," Pradhan said. The competitive landscape has significantly changed due to the introduction of newer channels such as the Internet and mobile commerce.

IDC's CRM Services Predictions: Pick of the bunch

While the Internet plays a large role in the way the CRM market is expected to evolve, it is only part of the equation. The future directions for CRM will be heavily guarded by developments in the new economy as a whole. IDC has made predictions that could have an impact on the development of the CRM services market in the future.

· Balancing the technology and human factor in CRM becomes critical: Human interaction will be increasingly focused on providing high-level, value-added services, leading to the creation of increasingly personalized and best-of-breed specialists in niche areas. As services become more productized, IT vendors will have to make sure they have the right balance between online services and human interaction. After all, the human factor is expensive, and if this can be channeled more effectively, the cost will be reduced. Already new technology in contact center allows for customers to have the choice of self-service or agent contact.

· B2B digital trade exchanges strengthens collaborative relationships: A new development in the marketplace is the recent launch of trade exchange initiatives. These collaborative partnerships are new Web-based business-to-business exchanges that are designed to enable trading between members of the group. This Web-based marketplace is designed to facilitate and simplify trading for retailers by optimizing resources, streamlining processes, and improving the overall efficiency leading to building long-term customer loyalty. By leveraging collaborative relationships, companies can strengthen their bonds with customers. They can use demand-side information to optimize supply chains.

· Colleague relationship management – the next wave: Crucial to meeting the demand for CRM service spending is the ability to staff CRM projects with personnel with varying skills. Companies will need to look beyond compensation packages for retaining employees. They will need to move toward benefits such as working with state-of-the art technology, working on challenging projects, and on those with a great deal of variety, flexibility in work schedules, career development opportunities, ongoing training, and a sense of company ownership. While larger organizations can capitalize on their names and prestige when recruiting, smaller CRM service vendors can provide benefits, such as stock options, equity in the firm, and flexibility in work schedules. This is critical to being successful in terms of attracting qualified employees who will remain with the company and take it forward.

About This Report

European CRM Services Forecast & Analysis 1999/2004 (IDC #PR03G) provides an overview of the CRM services market in Western Europe and helps to define opportunities for vendors that are looking to capitalize on this high-growth segment. It includes historical figures and forecasts for this market from 1999 to 2004, and a more detailed five-year forecast is provided according to type of CRM services activities (e.g., consulting, implementation, operations management, training, and support). Additional forecasts by country and industry are provided in this report as well as a view of the major drivers and trends impacting CRM. In addition, the report includes IDC's top predictions impacting the CRM services market, a chapter on the top 10 CRM service vendors in Europe, and an overview of major news events and industry announcements related to the CRM market in Europe.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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