Spending on business to business (B2B) use to grow faster
The worldwide social customer relationship management (CRM) market is forecast to reach over $1bn in revenue by the end of 2012, up from $625m in 2010, according to Gartner.
Worldwide social CRM market is projected at $820m in 2011.
Gartner said spending by buyers on social software for marketing, customer service and sales increased by 40% in 2010, but social CRM remained less than 5% of the total CRM application market.
More than 100 vendors have social CRM offerings, but most are not profitable and generate annual revenue of less than $1m.
Use by consumers accounts for over 90% of spending on social CRM, but spending on business to business (B2B) use is growing faster and will account for 30% of total social CRM spending by 2015.
Gartner said earlier social vendors acquired each other, now business application vendors and outsourcers have started to add capabilities through acquisitions.
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 reflect one of four typical starting points including 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 and more.
Gartner says certain factors will differentiate vendors, including interoperation between public social networks and internal collaborative communities, integration of processes with operational CRM applications, such as multichannel campaign management, application-specific analytics among others.
Vendors who can assemble a full set of social CRM functions, and make progress in two or more of these areas, will be best positioned for market success as the market matures.
The need for integration will favor more-traditional CRM vendors that add social capabilities, though companies are asking for the integration of social data with other customer data within sales, marketing and customer service processes, which will require the integration of social CRM with applications such as a knowledgebase for customer service, and even back-office applications.