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SME CRM
Overview
Flexible and more affordable CRM apps look to capture the vast SME market
Customer relationship management (CRM) platforms for small and medium enterprises (SMEs) form a sub-segment of the larger CRM market and cater to smaller companies (less than 500 employees). These SME-focused CRM platforms (offered mostly by relatively small vendors) are differentiated by their more affordable pricing and many free features, focus on essentials, basic customization, and simplicity. Some SME CRM vendors also provide social media integration, automation, and extensive customer support.
Considerable market opportunity remains for SME CRM providers because SMEs account for more than 99.9% of all businesses, 44% of economic activity, 47% of the labor force in the US, and have a comparatively lower market penetration. SME CRM penetration for SMEs stands at around 44% versus around 91% for regular CRMs for all enterprises with more than 10 employees.
Industry Updates
Market Sizing
The US SME CRM market could reach USD 8.5 billion–10.1 billion by 2027
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Market Mapping
Majority of the incumbents focus on the collaborative segment and have entered the SME CRM space through in-house development. While most of the disruptors are pure plays, there are a few that operate in multiple segments, such as Pipedrive and Insightly. Overall, the majority of the players are involved in the operational and collaborative segments, as these are areas in which SMEs would require the most help.
Operational
Analytical
Collaborative
The Disruptors
Among small and medium enterprise customer relationship management (SME CRM) vendors, Bitrix24 leads in terms of active users (~10 million users), mainly due to their strategy of offering a core CRM service for free. Weave, a collaborative all-in-one CRM platform, is one of the most active firms in the collaborative CRM space and has broadened its product offering to include marketing automation and an online payment suite. The other disruptor companies also differentiate themselves in terms of product strategy or target market. Some are either focused on local-level interactions (e.g., Podium), targeting non-employer SMEs engaged in professional services (e.g., Keap), or catering to specialized industries (e.g., Jobber).
Funding History
Competitive Analysis
Incumbents
The incumbents consist of leading enterprise customer relationship management (CRM) players Salesforce Essentials, Microsoft Dynamics, Oracle, and Zoho. The incumbent list also includes Hubspot, one of the leading and oldest SME CRM system providers, which had a user base of more than 194,000 as of November 2023.
Although user data from the incumbent operators is not readily available, it appears that Microsoft Dynamics is considered the leader within the SME CRM market, given its integration with popular business applications.
One of the leading enterprise players, SAP, entered the SME space in 2018 by launching the SAP Sales Cloud platform, which was formed by combining three acquisitions made by SAP since 2013—Hybris in 2013, Gigya in 2017, and CallidusCloud in 2018. However, in September 2020, two years after launch, SAP announced it would be exiting the CRM space, conceding its 5.3% market share to existing leader Salesforce. Salesforce has since expanded its presence in the SME CRM space with the launch of Salesforce Easy, which provides a range of solutions across sales, email outreach, and customer service functions as well as access to an app ecosystem.
Notable Investors
