Gartner, Inc., the Stamford, Connecticut based IT research and advisory firm recently reiterated its guidance that “market for Social CRM is on Pace to Surpass $1 Billion in Revenue by Year-End 2012” (for more, see this). I have seen similar estimates regarding size of Social CRM market from other research and analyst firms in recent past.
Such crystal gazing for estimating market potential for Social CRM software and services reminds me of the story of two shoe salesmen in Africa trying to assess size of the market for shoes. One salesman reported that there is no potential for selling shoes as no one wears them. Second salesman reported that there is tremendous potential for selling shoes as no one wears them. It’s all in the perspective!
In my opinion, the magic revenue number of $ 1 Billion for Social CRM is an under-estimate and true size of the market or potential for Social CRM software and services is much higher than ‘just’ a billion dollar. This is because Social CRM is an indispensable part of any CRM system due to the fact that Social Media has empowered customers like never before, they can discuss about brands/products on Social Media channels and companies have no control over what customers are saying about their brands/products. This discussion is visible to all including other customers, potential customers and competitors.
The best any marketer can do is to Listen and Learn from what customers are saying and Engage them in meaningful conversations. In other words, marketers have to treat Social Media channels as the front-end of CRM system, capture all relevant information from Social Media channels in the database and use Predictive Analytics and Knowledge Management tools to derive insights and help in decision making. As a result, CRM ain’t CRM if it isn’t Social!
And if CRM ain’t CRM if it isn’t Social, size of Social CRM market is equivalent to the size of CRM market in terms of number of installations (this includes large/enterprise class and SME/Small and Medium sized installations of CRM system). In terms of dollar amount, size of Social CRM market is equivalent to a substantial % of CRM market (atleast 25% of CRM market in my opinion). There is tremendous pent up demand for Social CRM software and services, not only among large enterprises but also small and medium ones. The only reason why it is not manifesting in terms of $$$ or revenue for Social CRM vendors is that software/services offered by existing vendors don’t address the pent up demand for Social CRM.
In other words, most Social CRM vendors don’t have a good product/service offering to address this demand. The moment any Social CRM software/services vendor offers a comprehensive solution for this pent up demand, marketers are going to lap it up the way customers lap up Apple’s iPad or iPhone for example. What I am trying to highlight here is that underlying demand for Social CRM software and services is very strong, but software vendors and service providers have not risen to the occasion to meet that demand and hence haven’t been able to tap into it. Hence to say that “market for Social CRM is on Pace to Surpass $1 Billion in Revenue by Year-End 2012” does not truly reflect the size of Social CRM market. It is substantially more than $1 Billion in my opinion, in fact many times more than that.
What do you think? Do you agree with Gartner that “market for Social CRM is on Pace to Surpass $1 Billion in Revenue by Year-End 2012” or you, like me think that it is substantially more than $1 Billion? Please take the following survey and share your opinion. (in case if survey question box is not visible below, you can Click here to take survey
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