Gartner has published its first Magic Quadrant for the social CRM (customer relationship management) market, and the firm's analysis suggests that the fast-growing market has a ways to go to reach maturity.
Gartner said there are more than 100 companies offering social CRM products, yet the analyst firm ranked only 19 of them, and listed only two — Lithium and Jive Software — as leaders. Three firms — Salesforce.com (NYSE: CRM), Mzinga and KickApps — were listed as visionaries, and the rest were dubbed niche players.
Oracle (NASDAQ: ORCL) CRM On Demand wound up in the niche category, as did Nielsen BuzzMetrics, Bazaarvoice, RightNow, Demand Media, Vovici, Radian6, LiveWorld, Globalpark, Leverage Software, Thomson Reuters-Hubbard One, Visible Technologies, InsideView and Overtone.
"Interest has exploded in using social software for marketing and customer service departments, and, to a lesser extent, in sales organizations," wrote Gartner analysts Adam Sarner, Ed Thompson, Jeffrey Mann, Michael Dunne, Jim Davies, Chris Fletcher, Gene Alvarez and Michael Maoz. "Inquiry volumes on social software for CRM have spiked well over 50 percent in the last 12 months. The number of social CRM vendors has expanded rapidly; the market in mid-2010 has just over 100 vendors."
But few of the vendors address the whole social CRM market yet, Gartner said, and most have annual revenue of less than $1 million and are not profitable. "However, spending has significantly ramped up since 2008, and a few vendors grew revenue by more than 100 percent in 2009," the analysts wrote, noting that the rapid growth has led to a number of mergers and acquisitions.
One reason that the small social CRM space is growing faster than the rest of the CRM market is the natural affinity between social media and CRM. Gartner assessed more than 240 social use cases last year and found that 80 percent of them were related to improving customer relationships.
Gartner said social CRM vendors tend to start in one of four ways:
- Hosting and supporting a branded or private-label community
- Monitoring and surveying private-label or independent social networks
- Facilitating the sharing of common B2B or business-to-consumer (B2C) contacts through the use of an internal community
- Community product reviews to facilitate the online sales process
The Gartner report costs $1995 and can be found here.