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Gartner: Stand by for social CRM consolidation

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22nd Jul 2010
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While expenditure on social CRM point solutions will grow at a faster rate than traditional CRM offerings over the next few years, the market is starting to consolidate, which will lead to the creation of broader-based suites, according to Gartner.

In its first ‘Magic Quadrant’ report on the sector, the researcher indicated that, while new entrants were coming onto the market all of the time, a raft of merger and acquisition activity would take place during this year and next.

Such activity would occur as social CRM software vendors found it increasingly difficult to differentiate themselves based on the ease-of-use of their products and quality of their professional services offerings as is currently the case. Moreover, although customer enquiries into such products have doubled over the last 12 months, few existing players are profitable or generate annual revenues of more than $1 million, Gartner said.

As a result, the functionality that is now available in point solution form will start to be integrated into the traditional CRM suites provided mainly by existing large software providers by the end of calendar 2011, with this process moving towards completion over the following three years or so.

As for who is using social CRM software the most at the moment, business-to-consumer (B2C) organisations currently make up 90% of the market, although this situation is expected to change over the next five years as uptake increases among business-to-business firms.

When choosing the right social CRM product for them, meanwhile, marketers should look for features such as the ability to integrate data or software into existing CRM systems, although such capabilities are rare at the moment.

Applications should also be able to support at least one function in areas ranging from internal sales, marketing, customer service, customers, prospects or external partners and vendors should be able to provide at least eight accessible customer references.

The leading vendors in Gartner’s Magic Quadrant are currently Jive Software, although the social business software provider has a low sales and support presence outside of its domestic US market, and Lithium Technologies, which provides hosted private-label social networks.

Visionaries include KickApps, a hosted environment for B2C communities; Mzinga, which sells hosted sales, marketing and customer service offerings and hosted CRM giant Salesforce.com. But there are currently no challengers to be seen in the Quadrant, which would appear to indicate that there is still room for growth within the sector.

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