Is the CRM Market Stagnant?

There is something wrong with the CRM marketplace today.  Frankly, it’s getting left behind in the face of social networks.  The focus today is on social networks.  If that’s where the customers are, then eventually that’s where the business will be.  What does that mean for CRM?  Let’s first look at the world of today’s relationship management applications.

CRM is Vastly Under Penetrated

Facebook has 800 million users today. That means 800 million people (1/10thof the world’s population) are using Facebook to manage their personal relationships.  150 million business professionals use LinkedIn to manage their business relationships.  That’s a lot of people.

However, do you know how many people are using CRM tools to manage their customer relationships?  About 15 million total across all applications.  That means if you combine all of the users across SugarCRM, Salesforce.com, Oracle, SAP and all the others, you have only 15 million sales, marketing and customer service professionals interacting and collaborating with their customers with CRM applications.  Compared to 150 million on LinkedIn alone.  Hmm, something is wrong here.

And here’s the simple truth of it.  After 20 years as a software category, CRM solutions are mostly a reporting tool for management at large, enterprise companies.  Smaller companies have mostly avoided CRM apps because they have been too expensive, too complex and not helpful for the average user.

How Big Should the CRM Market Be?

So if Facebook has 800 million users, LinkedIn has 150 million users and CRM as an application category has only 20 million, how many people should be using CRM today?  That’s actually pretty easy answer to find.  Look at what they are using now.  Email.

Research reports show that there are three billion email users in the world today and 25% of all email usage is in the corporate setting.  That means 750 million people globally are using the most basic of collaboration technology (i.e. email) at work to share ideas, communicate status, and ask for help and much, much more.

Now let’s say half of those workers are customer facing.  This is just a swag as that number is going to be different across different industries.  For instance, the manufacturing industry probably has something more like 10% of its workforce interacting with customers.  Whereas the financial services industry has a percentage likely closer to 100%.  But let’s just take a simple number, 50% of all corporate email users, as interacting with customers over email.  That means 375 million people globally are using email today to solve customers’ problems when they could (should?) be using a CRM application.

The challenge for the CRM industry is to turn 360 million people who rely on email (and spreadsheets) to work with their customers into CRM users.  Fanatic CRM users.   Loyal CRM users.  The kind of customers every company wants.

And that’s what SugarCRM is focused on.  Growing the CRM marketplace by 25x.  Turning a stagnant, under penetrated market into the fastest growing software market segment.  Turning 15 million users into 375 million users.

The Solution is “CRM Made Simple”

How will we create 360 million new users? As is usually the case with big problems, the answer is simple but will take a lot of work.  At SugarCRM, we are focused on delivering simple, easy-to-use CRM solutions that help users first and management second.  We are delivering this solution through a worldwide network of local value added resellers who know you and know your business.  Along the way, we will create a partnership with you (the best kind of customer/vendor relationship there is) by being completely open, transparent and trustworthy in how we solve your CRM problems.  We will earn your business every day and in return, we simply ask that you spread the SugarCRM word to your colleagues and friends.  That’s CRM made simple.

Yeah, it’s a big goal.  It might even be audacious.  But that’s why we do what we do.  We’re here to create successful customers and have some fun at it.

–Clint

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