Gartner Says Spending on Social CRM Will Grow Faster Than Traditional CRM

5 minute read
Barb Mosher Zinck avatar

 Gartner (newssite) has officially recognized the growing movement that is Social CRM by giving it a place on the list of Magic Quadrants. So what are they saying about it and what where do all the vendors sit in the quadrant?

The Social CRM Marketplace

Social CRM, as we've indicated before is not a replacement for traditional CRM solutions, it augments it. 

Gartner says that the Magic Quadrant is in response to "the growing interest and investment in social applications to support sales, marketing and customer service business processes."

They have identified over 100 vendors of some type of Social CRM solution although few address all the categories listed below. It is expected that the market will go through major changes such as mergers and acquisitions, new entrants and exits over the next year or so. 

  • Social Monitoring
  • Customer and Partner hosted communities
  • Enterprise Feedback Management (EFM)
  • Product Reviews
  • Sales Contacts

Right now Social CRM vendors differentiate themselves by the services they offer, their ease of use and the quality of their professional services, but Gartner believes it's going to get harder for vendors be successful offering these core functions and sees the market moving towards Social CRM suites. They also suggests that much this capability will be integrated into traditional CRM solutions by 2014 -- especially with the larger CRM vendors.

According to their research, B2C customers account for over 90% of spending on Social CRM. This is expected to change through 2015 as more B2B vendors starting using it.

There are a number of different use cases for Social CRM and Gartner lists some of them in the report along with a list of typical functions for customers and organization administrators. If you follow the use of communities, whether they are internal, external or some combination, the use cases, and capabilities are very familiar.

Making the Magic Quadrant Grade

To widdle down the list of vendors, Gartner outlines a few inclusion/exclusion criteria which include:

Learning Opportunities

  • Offer a social application, supporting one or more of internal sales, marketing, customer service users, customers, prospects and partners outside the enterprise.
  • Appear on at list 25% of Gartner's Social CRM shortlists
  • Have at least 8 accessible client references for the product

There is also a list of minimum functions for the included applications, one of which is the ability to incorporate findings or solutions into CRM operations.

Social CRM Leaders

Leaders of Social CRM have two characteristics according to Gartner:

  1. Their software benefits both the company and the community.
  2. Demonstrate support for multiple CRM processes and have substantial revenue specifically from Social CRM.
  • Jive Software: Not really surprising to see Jive in a leader position, they are one of the most well known social software vendors (social business software) and have a number of very large corporate customers. We've covered a lot of their offerings over the past year or more that are strongly focused on marketers. The cautions for Jive include its low sales and support presence in EMEA and Asia/Pacific, and its lack of prebuilt integration with packaged CRM solutions.
  • Lithium: Offering primarily hosted private-label social networks to both B2C and B2B, one of Lithium's strengths is its ability to measure ROI and the health of a customer's community. Weaknesses include no interoperability with popular social networks (although they indicate they have recently launched a Facebook app), and lack of integration with CRM solutions.

Social CRM Visionaries

  • KickApps: A hosted platform for B2C communities, KickApps makes the Visionaries list for a platform that is flexible, highly configurable and easy to implement. Cautions are related to its only recent focus on marketers and its limited integration with packaged CRM solutions.
  • Mzinga: A hosted platform that can be standalone or integrated into an existing website, Mzinga's focus is on sales, marketing and customer service. It has one of the widest ranges of applications, but has been slow to integrate with public social networks or traditional CRM solutions.
  • salesforce.com: Chatter, Ideas and Jigsaw all contribute to helping Salesforce bring social into their CRM processes. Viability is an obvious strength, and they are a leading proponent of social in CRM applications. Cautions include a lack of B2C focus, and the maturity of their social solutions.

Niche Players and Challengers

The bulk of the quadrant is filled with Niche players who focus in specialized areas of Social CRM. Some of these include Leverage Software, Visible Technologies, Radian 6, Oracle CRM on Demand and Overtone.

It's also interesting to note that Gartner lists no vendor as a Challenger, which shows the room there is for growth within this market. 

Another important point is that no vendor listed in this report has tight integration with traditional CRM solutions (other than salesforce.com). This is an area we should expect to see real growth in over the next couple of years, although it's likely that many of these vendors need to work on the social aspects of their solutions before they take it to the next level.

You can get the full details on the strengths and cautions for each vendor by obtaining the report from Gartner