The worldwide social customer relationship management (CRM) market is forecast to reach over $1 billion in revenue by year-end 2012, up from approximately $625 million in 2010, according to Gartner, Inc. Worldwide social CRM is projected to total $820 million in 2011.
However, analysts said spending by buyers on social software for marketing, customer service and sales increased by 40 percent in 2010, but social CRM remained less than 5 percent of the total CRM application market. More than 100 vendors have social CRM offerings. Most are not profitable and generate annual revenue of less than $1 million.
Most vendors remain relatively small and unprofitable, although many grew 50 to 100 percent in 2010. In order to thrive in the future, analysts said that social CRM vendors will need to provide clear benefits for companies and communities, demonstrating multiple use cases for sales, marketing and customer service processes.
Today's vendors differentiate themselves on the basis of functions, process workflow, analytics and ease of use or superior experience delivered through professional services. The functions that social CRM vendors offer tend to reflect one of four typical starting points:
- Hosting and supporting a branded or private-label community, and providing the surrounding functions
- Monitoring, listening to, surveying and responding to private-label or independent social networks
- Facilitating the sharing of B2B or business to consumer (B2C) contacts through communities
- Establishing community product reviews largely to facilitate online sales
Four other factors will also differentiate vendors:
- Seamless interoperation between public social networks and internal collaborative communities
- Integration of processes with traditional, operational CRM applications, such as multichannel campaign management, a customer service knowledgebase or a sales lead application
- Application-specific analytics to help prove the ROI of the social CRM application
- Partnerships with global system integrators, or digital or interactive agencies and consultants, to promote and deploy the applications
Gartner analysts said that R&D in social CRM will center on five areas: (1) deeper integration with traditional CRM processes; (2) tools to measure ROI; (3) deeper integration with social network services -- particularly Facebook and Twitter; (4) increased use of analytics; and (5) new use cases for social CRM.
More information on CRM can be found at www.CRMindustry.com.