Making CRM more social media-friendly

July 30, 2013: 5:00 AM ET

As customer relationship management finds itself at a crossroads, Nimble aims to take a bite out of Salesforce and others.

By Andres Vaamonde

130729162034-customer-service-computers-614xaFORTUNE -- "CRM" looks like yet another jargony business acronym -- it stands for "customer relationship management," which just doesn't sound all that sexy.

Lack of appealing acronyms aside, the CRM industry is booming. CRM companies create software that helps businesses manage contact with current and future clients and partners. The systems are used in a whole host of fields including marketing, customer service, and event planning. Bursting at the seams, the business is $18 billion in size and saw 12% growth in 2012. A report by MarketandMarkets predicts that the industry's size could increase to $24.2 billion by 2018.

The leaders in this space are well-established names you already know: (CRM), SAP (SAP), Oracle (ORCL), Microsoft (MSFT), and IBM (IBM). Salesforce leads all CRM companies with $2.5 billion in sales in 2012, with SAP coming in a close second at $2.3 billion.

With all its success, the CRM market now finds itself at an important juncture due to the constantly growing—in significance and size—role of social media.

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"Everything revolves around your smartphone now," says Jason Maynard, a senior enterprise software analyst at Wells Fargo. "Everything that happens can be captured." He adds that contrary to popular belief, the recent obsession with social media is not restricted to youth: "My mom is in her sixties, but she is on Facebook more than I am."

Social media's potency means it now affects business. Twitter is important. LinkedIn is crucial. Many PR firms tell corporate clients that social media is the only media type of substance anymore. As a result, CRM outfits must be social media-proficient or risk becoming obsolete. This need has opened up a whole new market within the CRM community, called "social CRM." The same MarketandMarkets report estimates this fragment of the business is $1.91 billion in size -- and will grow to $9 billion by 2018.

One company in the social CRM space is Nimble, founded by CRM pioneer Jon Ferrara. He cofounded GoldMine Software Corporation in 1989, which he later sold to FrontRange in 1999. After 10 years outside the business, Ferrara founded Nimble in 2009 to capitalize on his conclusion that CRM products for small businesses were either unsatisfying or too expensive and complex. Additionally, he noticed the upswing of social media and that other CRM companies were not paying attention to this trend. Ferrara believes his own offering "can connect the right people to the right opportunities."

Nimble's function is simple: It culls data from a wide range of social sources (including email, Twitter, Facebook, and LinkedIn) and combines it so that users can contact customers without having to scour all of their social media outlets. Customers navigate to and type in a password to access a system similar to Facebook (FB) or Linkedin (LNKD). There, they can choose how they'd like to reach out to their customers.

So far the platform has appeared successful, boasting a 300% increase in users since launching its third update in May. According to Ferrara, the average time a Nimble user spends on the interface is 5.5 hours. Clients, he says, "tell me we have hit the holy grail."

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Plastick Media, an internet-based media agency, is one such client. Sean Reilly, its VP of business development, says that before Nimble, Plastick used High-Rise, a small business-focused CRM company, but after finding flaws with the interface, calling it "clunky and uninviting," Plastick made the switch. "Nimble is prettier, more sophisticated, and much friendlier to use," he says. "And let's face it, it helps us close more deals." High-Rise declined to comment.

While the numbers are nice and customers have been more than pleased with Nimble's functionality, the company is still dwarfed by Salesforce and similar giants of the CRM world. Yet Ferrara remains optimistic. His big goal is to allow Nimble users to not just foster relations with the contacts they already maintain, but see how future relationships could pan out. "We're deriving insights," he says, "to decide when new contacts come across whether that relationship will be successful."

Ferrara also hopes Nimble isn't restricted to its "social" CRM status. "We have transcended social CRM and evolved into an intelligent contact manager," he says. His objection to the social label likely stems from his belief that the established CRM giants are coming up short. "Salesforce, Oracle, Microsoft, and others are ... more burden than benefit to the modern social selling environment." For the big guys, Ferrara says, " It will be hard for them to evolve."

So, can Nimble fill the gap Ferrara perceives has been left open by larger CRM players? Wells Fargo's Maynard, a man with as much a pulse on the community as anyone, states, "Nimble has all the DNA of a disruptive company."

Of course, refining his previous statement, Maynard adds, "I do think, though, the wave is bigger than just one company." But bigger than Salesforce?

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