Magazine article CRM Magazine

CRM Magazine Best Practices Series: CRM Solutions for Vertical Markets

Magazine article CRM Magazine

CRM Magazine Best Practices Series: CRM Solutions for Vertical Markets

Article excerpt

In the old days--well, the 1990s--several CRM software providers were once end-user companies that had developed proprietary software to fit the particular needs of their company's specialized business processes. At some point, each decided to monetize its investment by selling its CRM solution to other companies operating in that specific vertical market segment.

Two particular companies that come to mind--one in the utilities sector and the other in pharmaceuticals--were quite successful marketing their solutions in their respective markets. Since most companies in any particular vertical market utilize very similar business models and processes, this approach was an extremely efficient way for other end-user companies to become technology-enabled without having to go through the pain and expense of developing their own proprietary software.

This approach allowed the software vendors to create offerings that tended to be "an inch wide, and a mile deep"--which, to start a new metaphor, ended up a double-edged sword. At first, the approach may have been a benefit in the early stages of marketing--most of the desired customization for target customers was already built into the initial product, making it relatively easy to beat out competing vendors whose solutions would still require immense amounts of customization. Unfortunately, new prospects, especially in verticals such as utilities and pharmaceuticals, are difficult to come by: Those fields require vast amounts of capital, limiting new market entries. Although these markets represent huge targets for vendors, implementations are time- and resource-intensive--and deals, although large, are few and far between.

Many of the early CRM vendors who started out in specific market segments soon found themselves boxed in, with no place to grow. Take the two examples cited above, in the utilities and pharmaceuticals sectors: One vendor took the leap into a broader market, transforming its technology to become an early leader specializing in mobile applications. …

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