Social CRM Off to a Strong Start
Investors are recognizing the growing clout of the social conversation with enterprises, propagating several investments in social enterprise applications at the beginning of the year.
Lithium Technologies banked $53.4 million from New Enterprise Associates as well as SAP Ventures and various other sources to fuel product development, engineering, and heightened service delivery for existing customers.
Rob Tarkoff, Lithium president and CEO, called the investment a testament to social CRM's staying power. "Brands will continue to go social in an even bigger way in 2012 and beyond," he said in a statement.
"I'm very excited about social media in general because…now we're in the phase of early majority, the 'How do I actually do this as a business?'" stage, says Natalie Petouhoff, social media executive education program director at the UCLA Anderson School of Business. "We're starting to see the conversation around, 'What's the business value? How do I apply this? What's the ROI?' because these [companies] are very structured."
Almost simultaneously, social relationship startup Nimble stepped up its game with $1 million in seed money from Google Ventures and angel investors, including Dharmesh Shah, Don Dodge, Jason Calacanis, and Dallas Mavericks owner Mark Cuban. In a statement, Cuban referred to Nimble as a CRM service that "is one of the best tools any small to medium-sized business that wants to increase sales and productivity can have." Nimble plans to expand upon its social business platform, adding sales and marketing functionalities, and to improve social relationship management and collaboration in an entire company environment.
In August 2011, Gartner forecasted social CRM investments to surpass $1 billion by the end of 2012; how it will be defined remains at the forefront of related thought.
"The Lithium announcement reinforces the demand in the market for social business solutions," notes David Northington, CEO of GlobalOne. "We are investing into all aspects of what is now evolving as social CRM. Our social business services practice was established at the beginning of this year with a team of industry veterans who have a clear point of view and expertise in the space."
GlobalOne marked a $25 million investment from Columbia Capital this summer to continue its growth pattern; at the end of 2011, it acquired a Vodafone mobile app team, which Northington says will address "internal collaboration as part of social CRM as well as helping [clients] leverage social CRM into their existing marketing efforts."
B2C and B2B companies will need to define clear benefits of social CRM, according to Gartner. "Use by consumers accounts for over ninety percent of spending on social CRM, but spending on business-to-business use is growing faster and will account for thirty percent of total social CRM spending by 2015," said Adam Sarner, research director at Gartner, in the report.
In the enterprise and SMB environment, expect to see deeper insights into social business data, both in the form of data and subsequent analysis of that data, industry experts say.
"[2012] for me is the year of analytics and the year of integrating," Petouhoff says, though she notes that a true social CRM system will need to incorporate social marketing, social sales, and social customer service. "This is the year of taking all these separate point solutions and integrating them into something that can be called—maybe, just maybe—social CRM."