But if you want it to work, you have to get it right first — and a lot of the world’s most powerful companies are getting at least one aspect of it wrong.
The latest findings from tech research company Gartner suggest that only 50% of Fortune 1000 companies will see worthwhile returns from their social Customer Relationship Management (CRM) campaigns.
Perhaps of greater concern, though, is the fact that of that 50%, “only 20% will even have the data to evaluate where their social strategy is falling short”. These organisations will be unable to justify future funding.
“For the 50% of Fortune 1000 organisations not determining, or even measuring, ROI, ignorance will mean failed projects,” says Adam Sarner, research director at Gartner.
Gartner reckons that a large portion of companies lack a clear business objective when it comes to social CRM, being at an early stage in their measurement of its business outcomes.
“Social data, such as numbers of fan pages and weekly tweets, is not enough to correlate with the contribution of top business objectives,” says Sarner. “ROI, measurable business value and budget justification for social projects are becoming unavoidable topics for many organisations.”
That desire to make business sense out of social is driving the market in social CRM tools. It’s part of the reason Salesforce was willing to dole out nearly US$700-million for Buddy Media.
Gartner expects the worldwide market for social CRM software licenses and subscriptions to total US$2.1-billion in 2012, up from US$850-million in 2011, and that social CRM revenue will represent 10% of the overall CRM market.
Companies selling social CRM products will also have to find new ways to differentiate themselves. Today, they can do so on the basis of functions, analytics, ease of use and superior experience delivered through professional services. In the future, they will need to show quantified business cases and, more importantly, deliver repeatable social CRM processes that are not yet broadly available.
It’s also now a part of every aspect of business, from marketing and sales to customer service and support. Gartner says business-to-business applications for sales use will have the fastest growth and will account for 30% of social CRM spending by 2015, up from five per cent in 2011.