Gartner has just been published its latest edition of "Magic Quadrant for Social CRM" — and with it, the challenges facing vendors in this space have finally been articulated. Not least of those problems is the need for vendors to demonstrate the economics of deploying these Social CRM systems in multiple customer relationship management use cases, including marketing, sales and customer service.
Social CRM Magic Quadrant
What is interesting about the Magic Quadrant for Social CRM is that it is one of the only MQs researched and published this year where the Niche Players vastly outnumber both the Leaders and the Challengers, while only two companies made it into the Visionaries quadrant.
The Leaders, as might be expected, include Salesforce, Jive and Lithium, while Oracle — surprisingly enough — only made it into the Challengers Quadrant, along with Bazaarvoice.
Whether the low number of Leaders is due to the fact that Social CRM is still an emerging market remains to be seen. But, Gartner notes, one of the key characteristics of the market over the past year has been a burst of acquisition activity as vendors jostle for position.
Today we will take a look at the market itself as well as emerging market trends. On Thursday, we will take a look at the Niche Players — who constitute the vast majority of players in the Quadrant — to see whether this situation has evolved because individual vendors develop a single product in a niche area and stick to that, or whether there are other reasons.
If the "niche product" trend is indeed the case, then next year it will likely be dominated by more acquisition activity, with the larger vendors seeking to fill holes in their own portfolios by buying up what they don’t have already.
Gartner Defines Social CRM
How does Gartner define Social CRM? According to the MQ, it is a business strategy that generates opportunities for sales, marketing and customer services, while also benefiting online communities.
To succeed in the market, vendors need to provide ways for the customer to manage their relationship with the enterprise. The result is that Social CRM applications need to provide a number of different customer engagement levels. Gartner says that all Social CRM applications should:
- Encourage many-to-many participation with customers
- Share user-generated content and data
- Provide communities with high levels of autonomy and engagement levels
- Provide the community with balanced purpose
It only works if users participate of their own accord — and generally, they will only do so if there is some kind of reward system in place. However, enterprises also need to be able to see measurable benefits, or they will not be inclined to invest in Social CRM technologies.
Value and profitability are provided by:
- New customer insights
- Products and services differentiators
- Pushing sales
- Building brand trust
- Improving customer experience
Overall the, Social CRM applications should:
- Provide customers with the feeling that they are involved in making decisions of their own accord — as opposed to feeling forced into something by the enterprise producing the product.
- Give customers more control in their dealings with the enterprise, particularly in the customer’s online presence and their online reputation. It should also give customers control over what personal information is used.
- Provide customers with the feeling that they belong to an identifiable community.
There are other tools outside of the Social CRM space that are used by marketing, sales and customer service — like multichannel campaign management, e-commerce, and web content management — but Gartner has not looked at those in this MQ.
Again like all other MQs, Gartner recommends that any company considering investing in this space should look at all the products in all the Quadrants before making a decision. They point out that needs will often be best served by products that do not fall into the Leaders Quadrant — especially in an environment where there are so many Niche Players.
Social CRM Market Context
But before looking at the Leaders it is necessary to place them in the context of the market as it stands at the moment. As a market space, it is relatively new, with the first Quadrant developed only three years ago. It was developed, Gartner says, because of the explosion in the use of social tools by enterprises looking to develop a competitive edge in marketing.