Where Is Social CRM ROI?

Ann All

Updated · May 04, 2012

CRM's star is rising in the enterprise, as evidenced by a recent Gartner survey that found CRM moved up 10 spots on a list of CIOs' technology priorities and a separate survey in which CEOs tapped CRM as the most important near-term technology investment.

Social CRM got a special shout-out with Gartner Vice President Ed Thompson noting CRM executives will be challenged with “taking ‘social more seriously – not as ‘just another channel,' but as a whole new way of doing business.”

As Thompson pointed out, “…  CRM services are shifting from a focus on point solution deployment centered on application suites, to a ‘customer experience' that brings together customer information, analytics, workflows, mobility and social CRM disciplines into a richer, multichannel access to capture the entire customer journey.”

Social CRM Benefits, Challenges

Results of this more holistic approach will likely include more effective product development, more targeted marketing campaigns and ultimately happier customers. Yet offering a multiple-discipline customer experience that may incorporate not only social CRM but also business intelligence and business process management is almost sure to present a learning curve for most organizations.

While social channels play a key part in social CRM strategies,  many organizations take a reactive approach to social channels like Facebook and Twitter and do not incorporate them into their existing customer support operations and infrastructures, Forrester Research analyst Kate Leggett told Enterprise Apps Today earlier this year.

As a sign of the nascent nature of social CRM, Gartner predicted that just 50 percent of Fortune 1000 companies will attain a worthwhile return on investment (ROI) from their social CRM initiatives by the end of this year.

Many organizations fail to tie their social CRM initiatives to clear business objectives, and thus struggle to measure their ROI, Gartner found. “Among the companies who will not see a worthwhile return, only 20 percent will even have the data to evaluate where their social strategy is falling short. These organizations will be unable to justify future funding,” said Adam Sarner, a Gartner research director.

Organizations must look beyond metrics such as weekly tweets or numbers of Facebook fan pages because it is difficult to align those measures with business objectives, he said.

Still, organizations will keep trying and more will experience success with their social CRM initiatives. By the end of 2012, Gartner believes three-quarters of new social CRM initiatives that receive funding will be based upon a business case incorporating measurable ROI.

Social CRM Spending

Gartner expects the global market for social CRM software licenses and subscriptions to reach $2.1 billion in 2012, up from 850 million in 2011. Social CRM revenue will represent 10 percent of the overall CRM market.

Sales organizations will become especially eager adopters of social CRM, as social CRM is increasingly important to lead generation and cross-selling and up-selling efforts. Business-to-business applications for sales use will experience the fastest growth and will account for 30 percent of total social CRM spending by 2015, up from 5 percent in 2011, Gartner predicts.

Earlier this year a Nucleus Research report found sales people with social CRM capabilities were 11.8 percent more productive than their non-social peers. Twenty-one percent of respondents surveyed by Nucleus cited productivity gains of more than 20 percent, with just 7 percent reporting no productivity enhancement.

Rebecca Wettemann, a research vice president at Nucleus, told Enterprise Apps Today that as the line between CRM and social collaboration continues to blur, social CRM will spread from the sales/marketing function throughout other parts of an organization. “… We're seeing more and more people not directly involved in sales getting sales information from applications like (Salesforce.com's) Chatter,” she said. This added involvement from other business units can help raise social CRM's profile and better align it with strategic business objectives.

Ann All is the editor of Enterprise Apps Today. Follow Enterprise Apps Today on Twitter @EntApps2Day.

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  • Ann All
    Ann All

    Public relations, digital marketing, journalism, copywriting. I have done it all so I am able to communicate any information in a professional manner. Recent work includes creating compelling digital content, and applying SEO strategies to increase website performance. I am a skilled copy editor who can manage budgets and people.

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