The Rise of Full-Box CRM

Editor’s note:  Jon Bischke is a founder of Entelo and is an advisor to several startups. You can follow Jon on Twitter @JonBischke.

CRM is a massive business. At least an $8 billion industry according to Gartner. Salesforce, the company you think of when you hear CRM (after all, it is their ticker symbol) has a market cap north of $21 billion dollars. And while sales departments are typically most commonly thought of in conjunction with these systems, they’re far from the only adopters of CRM.

In the human resources and recruiting space the equivalent to CRM is the applicant tracking system or ATS. This is also a big business, worth somewhere in the neighborhood of a billion dollars. Taleo, a leader in the ATS market, was recently acquired by Oracle for $1.9 billion. SuccessFactors, another provider of ATS software, was bought by SAP for $3.4 billion.

And it’s not just big companies that are worth watching in the space. Streak, a stripped-down CRM that sits within GMail, is experiencing tremendous growthNimble, an LA-based company, is posting solid numbers as well with the company’s CEO Jon Ferrara sharing that active users of the product are spending about four hours a day on the platform. Jon knows a thing of two about CRM. After all, he was a founder of Goldmine, one of the largest players in the CRM space (back when the industry was commonly referred to as contact management software).

Indeed, it’s an interesting time to be in CRM. But there’s a noteworthy trend that could change CRM as we know it. It has the potential to be as revolutionary as the movement to cloud-based SaaS platforms at the turn of the century. That trend is the rise of the “full-box CRM” and this trend seems noticeably different from the buzz around “social CRM” which focuses more on social media monitoring (think Radian6).

So what is full-box CRM? Let’s start with what empty-box CRM is. When you buy a CRM platform and roll it out inside of your organization what you initially start out with is an empty box. Your sales, marketing and human resources organizations are then tasked with filling the box with leads. Significant energy is spent on prospecting, data entry and management of existing contacts. Filling the box is, in itself, a multi-billion dollar industry with leaders like EloquaHubspot and Marketo among the fastest-growing SaaS companies in history.

Enter the full-box CRM. A full-box CRM comes pre-filled with “customers” (e.g., sales leads) and this is a big deal. Now the workflow of your team is spent on searching your existing system for the right people rather than going “outside the box” to find those people. And because all of the data is contained internally the massive amount of wasted productivity on data entry goes away.

But where does this data come from? And this is where the enabling factor for the full-box CRM comes in: the rise of the social web. The types of people that would end up in a company’s CRM are more visible than they’ve ever been. They’re on LinkedIn, Twitter, Facebook and a whole host of other sites. People are already using tools as well-known as and Klout and as obscure as Follower Wonk to mimic full-box CRM systems today (Disclosure: Our company Entelo is doing work in the full-box CRM space.)

The rise of full-box CRMs brings up a host of potential issues and challenges. Privacy concerns will be paramount and there is sure to be some backlash as has already been seen in older controversies surrounding Jigsaw/ (see Michael Arrington’s 2009 TechCrunch post The World Has Changed. Is Jigsaw Still Evil?) and more recent controversies involving Klout (see Charlie Stross’s Evil social networks post and Klout CEO Joe Fernandez’s response).

Despite concerns, there are tremendous productivity gains to be made here. At a minimum, billions of hours are spent each year on rudimentary data entry and on scrubbing and maintaining that data. Furthermore, increased visibility into more efficient communication channels made possible by social networks like LinkedIn and Facebook provide a historic opportunity to do business in new ways.

Indeed, LinkedIn seems exceedingly well-positioned to pounce on the full-box CRM opportunity and their recent acquisitions of Connected and Rapportive seems to indicate that they’re positioning to go after this full-force. Changing tides make for unpredictable sailing of course and ago a decade it wasn’t clear who would dominate the CRM landscape as it shifted to the cloud. Similarly, it’s entirely too early to declare a winner here but given an industry of this size, the stakes are significant.

[image via flickr/Roger H. Goun]