Jive and Lithium Top Gartner's First-Ever Magic Quadrant for Social CRM
Rounding out its Customer 360 Summit in Los Angeles last week, research giant Gartner unveiled its much-anticipated Magic Quadrant for Social CRM report. A collaborative effort by eight CRM analysts, the 26-page report evaluates the market and ranks the leading social CRM vendors according to vision and ability to execute. "The initial challenge was trying to give our clients an understanding of how they can make good choices based on a very new area around CRM," says Gartner Research Director Adam Sarner.
Sarner reveals that the research firm began with a list of 140 vendors, all offering some elements of social CRM. Gartner whittled that list down to 20. "There were a lot of vendors that did [an element] of social CRM, but we were looking beyond that," Sarner explains. "We wanted [the vendor to have] a considerable amount of processes and ideas around how harnessing the social relationship would work towards a business process."
According to Gartner, social CRM application spending will grow at a faster rate than traditional CRM spending. The vendor landscape is becoming more populated, and, at the same time, it is going through a wave of consolidation. Gartner predicts that acquisitions will continue rapidly through 2010 and 2011. The applications will evolve, as well. The report states: "Gartner believes that by year-end 2011…disparate approaches will combine to form social CRM suites."
Vendors in the report include the following categories: social-media monitoring, hosted communities, product reviews, sales contacts, and enterprise feedback management. Despite tremendous growth and interest in the market — Gartner says that inquiries into social CRM have doubled in the last 12 months — the research firm notes that many of the social CRM incumbents still are not profitable and generate annual revenue of less than $1 million.
Gartner employs the following definition for social CRM: "Social CRM applications encourage many-to-many participation among internal users, as well as customers, partners, affiliates, fans, constituents, donors, members and other external parties, to support sales, customer service and marketing processes. Social CRM works within each of these domains, for example, to provide a social enterprise feedback mechanism in the service domain, or social monitoring or product development in the marketing domain."
Here's Gartner's breakdown of the market:
Vendors falling in this space have software that benefits both the company and the consumer. "Leaders' software convinces users that they will get something valuable by participating in a conversation or community," the report states, "Leaders' offerings demonstrate support for multiple CRM processes, not just one domain, and have substantial revenue coming specifically from their social CRM offerings."
These vendors are paying close attention to market trends, such as collaboration. "Their products and product road maps exhibit innovation, especially in architecture and lightweight integration," Gartner writes.
Some of these vendors or products may be narrow in scope, but Gartner writes that they "provide useful, focused technology." Gartner suggests, however, that growth is crucial for all of them, especially given the research firm's predicted rise in the need for differentiation in 2011.
- RightNow Technologies
- Demand Media
- Nielsen BuzzMetrics
- Hubbard One (a unit of Thomson Reuters)
- Radian6 [Editors' Note: Named a CRM Rising Star in 2010.]
- Oracle CRM On Demand
- Leverage Software
- InsideView [Editors' Note: Named a CRM Rising Star in 2009.]
- Visible Technologies [Editors' Note: Named a CRM Rising Star in 2009.]
Sarner insists that the vendors faring the best on the Magic Quadrant excel at balancing the "care and feeding with customers" with ROI and key performance indicators. He shares a key finding from the research: "In general the traditional CRM vendors... have knowledge of business process. The more hosted community vendors — social listening platforms, for example — they are good at communities." Both of these groups have something to learn from each other, Sarner says. "Traditional CRM needs to figure out the care-and-feeding with customers — less of, ‘What's in it for us as a business,' but ‘what's in it for them?' And, in general, the vendors specifically dealing with social need to understand what that means for business."
Sarner hammers home the point that the social CRM technology by itself produces nothing social. "Strategy before technology in this market is essential," he says.
News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine.
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