A version of this article first appeared in Customer strategy, a magazine published 10 times a year in London by TBC Research. Through its comprehensive portfolio of magazines, events and research, TBC Research is dedicated to helping senior business professionals make more informed technology decisions.
Over the past few weeks I have spent most of my time in Europe and have been almost everywhere except Greece and Albania. My mission has been to look at the European CRM industry and to make some sense of what is going on in the different markets, and most of my preconceptions have been confirmed.
For a start, the U.K. represents about 35 percent of the spending on European CRM for a couple of reasons. Firstly, there is a tendency for U.S. products and companies to use the U.K. as a launch pad in Europe, so market making and infrastructure arrive here first. This is, however, not the whole story, as the U.K. has also had the biggest indigenous CRM market in Europe through the past decade. Contrary to popular myth, the U.K. business management and commercial climates are more open to external influences and leading edge ideas. It may be that our history as a trading nation has something to do with this--it is no coincidence that the Netherlands, with a similar history, is the second most mature market in Europe.
My analysis of the various country markets showed the Nordic region to have a lower level of CRM awareness than I had thought but a very high level of interest in changing the situation. Nordic is a leading edge area in other technologies such as mobile and the Internet, and take-up on all things CRM will be swift over the next 18 months. It is also English-speaking, which will accelerate the process.
By contrast, Germany is at about the same level in terms of awareness but will take longer to "go." German CRM is very contact management focused and other than in some key areas such as banking shows no real signs of imminent maturity. This may have a lot to do with the lack of service culture in Germany (cynics would say they don't need one as everything works as advertised) and an over-regulated marketing environment which may be inhibiting. Germany is a big market which can't be ignored, but it may take until late next year to show alignment with the U.K. and the U.S.
France is the dark horse, which could show spectacular growth over the next year. Conventional wisdom has it that Minitel held up the advent of the Internet in France, but now that has been reversed it is a Internet savvy nation, and Web-based technologies will do very well.
Italy has the same GDP as the UK. It has great food and is warm and friendly. I clearly need to go back for a second look, but in the meantime the big impact may come with second-generation mobiles. The need to have a more disciplined service environment could be a big driver very soon.
All this leads me on to an important point. Of the world's top 20 eCRM companies next year only two at most will be European and none will be British. The rest will be from the U.S. The biggest application area in the history of computing is opening up, and Europe is missing out.
Understanding the reasons for this has important ramifications.
If we look back to the early '90s, we can see that the U.K. industry of the time was at least as good as in the U.S., so there was no disparity in terms of technical or conceptual know-how. However, in about 1995 the U.S. took a great stride forward when Siebel, Vantive and Clarify got under way. These were well-funded companies with heavyweight players from the IT industry, and they forged alliances that would help them exploit what they predicted would be a massive market. They had great advantages in funding and in the Nasdaq mechanism which fuelled their growth and rewarded the investors. Europe has no comparable mechanism and therefore no similar springboard existed here.
But it isn't as simple as having Nasdaq and a big homogenous market to sell into. Europe had a second chance in about 1998 to really get into the CRM business. It was obvious then to those in the know how big CRM and e-business would become, but still there was a failure in Europe to think globally, to get proper financial backing and to forge technology partnerships. Companies like Update.com and Point have done well, but all too often there is a tendency to believe that success in a national market will be protection against global competition. There is also a lesson for our masters in Brussels that competition and markets are global, and failure to recognise this will have only one outcome.