Gartner Says Only 50 Per Cent of Fortune 1000 Organisations Will Get a Worthwhile Return From Their Social CRM Initiatives by the End of 2012

Analysts to Discuss the Future of Social CRM at Gartner Customer Strategies & Technologies Summit 2012, 11-12 June in London, UK

Although the adoption of social applications by sales, marketing and customer service departments continues to grow rapidly, Gartner, Inc. said that, by the end of 2012, only 50 per cent of Fortune 1000 companies will receive a worthwhile return on investment (ROI) from their social customer relationship management (CRM) initiatives.

“For the 50 per cent of Fortune 1000 organisations not determining, or even measuring, ROI, ignorance will mean failed projects,” said Adam Sarner, research director at Gartner. “Among the companies who will not see a worthwhile return, only 20 per cent will even have the data to evaluate where their social strategy is falling short. These organisations will be unable to justify future funding.”

During the next two years, the success of social CRM will depend on how well companies and social CRM technology providers can make social CRM projects more than just social objectives by tying them to clear and measurable business objectives. Gartner predicts that by the end of 2012 three-quarters of new social CRM initiatives that receive funding will have a business case incorporating measurable ROI.

Many organisations have established a form of social presence. However, many also lack a clear business performance objective for 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,” said Mr. Sarner. “ROI, measurable business value and budget justification for social projects are becoming unavoidable topics for many organisations.”

Gartner analysts said they expect the worldwide market for social CRM software licenses and subscriptions to total $2.1 billion in 2012, up from $850 million in 2011, and that social CRM revenue will represent 10 per cent of the overall CRM market.

Initially, social CRM was mostly a concern of marketing, but it now affects every discipline, from marketing and sales to customer service and support. Social CRM is increasingly important to lead generation and cross-selling and up-selling capabilities, and to other functions that are key to successful sales organisations. Gartner said that business-to-business applications for sales use will have the fastest growth and will account for 30 per cent of social CRM spending by 2015, up from 5 per cent in 2011.

Today, social CRM vendors differentiate themselves on the basis of functions, analytics, ease of use and superior experience delivered through professional services. Over time, however, they will find it harder to gain an advantage by providing unique core functions. They will need to show quantified business cases and, more importantly, deliver repeatable social CRM processes that are not yet broadly available.

“Vendors that can assemble a full set of social CRM functions and make progress in two or more areas, such as marketing and customer service or sales and marketing, will be best-positioned for success,” said Mr. Sarner.

Gartner analysts will discuss the development of social CRM at the Gartner Customer Strategies & Technologies Summit 2012, to be held from 11 to 12 June in London, UK. For more information about Summit, please visit www.gartner.com/eu/crm. Information from the event will be shared on Twitter at http://twitter.com/Gartner_inc using #GartnerCRM.