Esteban Kolsky looks at the new Gartner Magic Quadrant for SCRM and asks whether it demonstrates that the market doesn't exist.
- Sufficient differentiating features to make it independent of other markets.
- The ability to operate independently of other applications (no do-or-die dependencies).
- An addressable, unique problem that cannot be solved with other applications.
- A revenue projection that will make it worth the time for vendors and providers.
- A business justification, tangible costs and benefits, and in some (OK most) cases an ROI.
- A story that is easy to understand by senior management, middle management, and users.
In June of 2010, Gartner was faced with the same question and decided to test an answer in the form of a Magic Quadrant. In this Magic Quadrant they included four different vendor categories, and tried to compare them to each other – resulting in a mess of sensible proportions: trying to contrast a community-vendor to a social-platform-vendor to an enterprise-feedback-management-vendor is almost comical. I thought there was something not quite there with this first try, and I said so in my post debunking the Gartner SCRM Magic Quadrant.
One of the conclusions in that report, and something that was also shared by others in the market, was that Gartner had at least validated the concept of social CRM – if not the market (the conclusion back then was that Social CRM was too immature to be a real market). I agreed the concept was validated and Gartner threw the gauntlet in the rush to make a market: they said it would reach one-billion dollars by 2012.
It was almost as if that gave license to every vendor (OK, most every vendor – I am sure that those reading this article will say they were not part of the mad-dash) to become a social CRM vendor. If the four categories Gartner had selected in their first MQ were confusing, try dozens of different solutions and vendors. Attempting to rename everything that was social as social CRM created a pseudo-gold-rush, where the prize was not a mother-lode, but one-billion dollars in revenue.
Fast forward about a year, and Gartner has released their second version of the MQ (link to a free download, courtesy of Lithium), and unfortunately they have not provided additional insight into what the social CRM market is, should be, or will be. Not only did it fail to describe what social CRM is, it also failed to provide guidance on what a social CRM vendor looks like continuing to compare different vendor types against a mythical definition. It had a great opportunity to paint a good picture of what social CRM is and is not at a time when the vendors and end-users needed that guidance – and failed to deliver on it.
Was it because they cannot define the market? Does this mean there is no social CRM market? As an analyst, there is only one way I can answer that question: it depends.
Three different ways to look at it:
1) By the market definition introduced above and introduced in September 2009. We are not going to go down point by point, but the majority of them are not yet fully met – so it is not a market.
2) By the offers from many different vendors, some of them (but not all) highlighted in the Gartner MQ. There could be a potential for a market, but we still have many different categories of vendors calling what they offer social CRM – so I am going to make a judgment call and say we don’t have yet a market.
3) By the demands from organisations and customers to have a solution called social CRM delivered. This is the most interesting of the three aspects. How can a vendor tell a prospect or client what to call what they want to buy? Sounds flippant, but in all seriousness – if a vendor offers a community solution (one of the sub-markets that Gartner identified, and one of the four components I think are essential to have a social CRM solution, see figure 1) and the client calls it social CRM – will they correct them?
Do we have a social CRM market – even though Gartner and the rest of us failed to properly define it – because the customer is calling it so?
Interesting question, and one that points to a single concept to answer that – as well as the main question of what is the market of Social CRM. That concept is maturity.
The social CRM market continues to mature, slowly, and it is not quite settled yet. Customers will call it a market, and what the vendors offer a solution, mostly because they really want to have a simple answer to what they don’t understand. Social CRM – nay, social media - is a complex topic. It is not about Twitter, Facebook, Communities and now Google+. It is not about "engagement" or even about ROI or metrics. It is a far more complex concept that requires a lot more than technology to solve the problems it brings with it: deepening the relationship with the customer to, ultimately, co-create value.
As with everything else we do, however, we would like to have a technical solution. If an iPad can control a TV with a remote-control application, why can’t a social CRM application bring the deepening of those relationships? Which one is harder to master – considering the myriad television brands, models, and remote controls that exist out there?
Incredibly enough, something as simple as retaining a Twitter ID and the rules and behaviors associated with that is far harder to master. It requires many layers of controls, checks-and-balances, rewriting policies, and decision-making at almost every step. It requires people trained to understand it and use it, and requires compliance with guidelines, laws, and regulations. It requires changes to operations charters as well as a deeper understanding of what is it that the client represents to the organisation, and what the organisation does for the client.
Mastering all these takes time, patience, and trial-and-error. Changing a channel using a remote requires to be bored watching a specific show.
That maturity level gained by trial and error – by doing things right and wrong is what social CRM is all about: learning more about the organisation, the client, partners and other participants and using that to deliver more and better value to all parties involved.
Not something that Oprah can do.
Esteban Kolsky is principal and founder of ThinkJar, an advisory and research think-tank focused on customer strategies. will present: A Social CRM Framework at the upcoming Social CRM Strategies for Business Seminar hosted by SAP in Palo Alto, California on Sept 13-14. Mr. Kolsky has over 22 years of experience in customer service and CRM consulting and research. Learn more and Register at www.bptpartners.com.