Social CRM Targeted For Growth In 2012
Acquisition seems to be the rule to adding social CRM tools to the options for the corporate brand armoury
Jive Software, Oracle, Salesforce.com and more than 100 other enterprise software companies are fuelling growth in the social customer relationship management market, which is expected to top $1 billion (£736m) through 2012.
That is up from Gartner’s social CRM projection of $820 million (£503m) through 2011, which was an increase over $625 million (£383m) in 2010. Social CRM, also called social media monitoring, allows companies to gauge what users, rivals and others are saying about them on social networks such as Facebook, LinkedIn, Twitter and Google+. This sentiment analysis helps companies improve their customer service, as well as their brand positioning online.
Business-Focused Social Network Scanning
The trend has spurred larger enterprise software providers to acquire smaller companies to gain social CRM tools rather than spend the time building them in-house.Salesforce.com acquired social media monitor Radian6 for $326 million (£200m), and is stitching Radian6 technology into its Chatter corporate social network tool.
Jive, which added social CRM through its purchase of Filtrbox, has bet so heavily on this software that it has filed its intent to go public with the Securities and Exchange Commission.
Gartner analyst Adam Sarner said the social software consolidation will continue through this year, with enterprise application vendors such as Oracle, SAP and others likely making purchases to fill holes in their portfolios.
Jive, Salesforce.com and others are ahead of the market curve. While spending on social software for marketing, customer service and sales increased by 40 percent in 2010, social CRM remained less than five percent of the total CRM application market.
“Use by consumers accounts for over 90 percent of spending on social CRM, but spending on business to business (B2B) use is growing faster and will account for 30 percent of total social CRM spending by 2015,” Sarner said.
Not All Is Rosy In Social CRM
Most of the 100-plus social CRM providers are small and not making money despite growth of anywhere from 50 percent to 100 percent in 2010. To survive independently, or at least position themselves for sale to the right bidder at a juicy premium, Sarner said social CRM vendors will need to prove their mettle in a hyper-competitive market.
Moreover, they need prospective customers to buy into social CRM as more than an experiment or a bit-purchase limited to small departments. Sarner said few companies have social CRM strategies, let alone consistent applications sets across departments. This means different social CRM buckets for sales, marketing and customer service, with different vendors catering to each niche.
To help realise the $1 billion social CRM market capitalisation for 2012, Jive, Lithium, Oracle and others will have to be able to host and support a branded or private-label community; monitor and survey private-label networks; facilitate contact-sharing between businesses or business and communities; and include community product reviews.
“Vendors who can assemble a full set of social CRM functions, and make progress in two or more of these areas, will be best positioned for market success as the market matures,” Sarner said.
