Social CRM: Top Use Cases and Benefits for 2012Published: 24 February 2012 ID:G00231448Analyst(s): Adam Sarner | Jenny Sussin

VIEW SUMMARY

Companies are rapidly adopting social CRM applications for diverse purposes, with initial experience and benefits gained in a single department. This research analyzes emerging social CRM use cases and their corresponding benefits.

Overview

Adoption of social applications by sales, marketing and customer service departments continues to grow at a rapid pace. Actual use cases are growing but are unevenly diffused across a company with experimentation that, most times, forgoes measuring business benefits. This research analyzes and focuses on top use cases and benefits for social CRM projects.

Key Findings

Business-to-consumer (B2C) companies account for more than 90% of spending on social CRM applications. Therefore, internal users, adoption and use cases tend to come from marketing and customer service.

B2B social applications for sales use will have the fastest growth and will account for 30% of spending by 2015, up from 5% in 2011.

The most significant barrier to the adoption of social applications is a lack of strategy and understanding, and an inability to determine a business use case or ROI.

Recommendations

Tie social strategy objectives to the corporate vision or the CRM strategy — for example, if the corporate vision is to "increase customer loyalty by 5% in 2012," then companies should explore how social CRM will support that corporate goal.

When evaluating social CRM applications for one department, such as marketing, consider the expanded use case for other departments, such as customer service, to raise the potential for innovation.

Success in procuring and deploying social CRM applications is achieved by those companies that focus on the intended use of one or more CRM business functions, such as marketing, sales and customer service.

What You Need to Know

Social CRM is a business strategy, rather than a technology. It benefits the business by fostering engagement, participation, and interaction among customers, prospects and partners. A business benefit is the support of sales, marketing and customer service processes. Stakeholders should use this research to cut through the confusion and to select technology and processes best-suited to fill sales, marketing and customer service needs.

Return to Top

Analysis

Gartner has seen many different potential starting points for a social CRM strategy; however, many initiatives are unfocused and experimental, largely at the expense of measurable business benefits. Actual benefits for organizations using social applications are varied and dependent on the use case to which an application is applied. However, marketers have been the biggest adopters of social applications. Our most recent reference survey of companies purchasing social software showed that marketing departments are largely supported by the social software purchased, followed by IT (which, in turn, supports mostly marketing departments) and customer service. Sales departments are the least supported thus far (see Figure 1).

Figure 1. Which Business Units Within Your Organization Are Supported by This Social Software? (Multiple Answers Allowed; n = 175)

Source: Gartner (February 2012)

Return to Top

In addition, cited use cases for social CRM applications from most to least prevalent were external community peer-to-peer support, customer feedback, marketing functions idea management, brand reputation and defense, social campaigning, brand management, PR and social sales (see Figure 2).

Figure 2. Business Use Case for Purchasing Social Software (n = 175)

Source: Gartner (February 2012)

Return to Top

Gartner examines the most common use cases observed for social CRM in marketing, customer service and sales, the business benefits that are derived, and emerging applications that we expect to support these applications in 2012.

Return to Top

Social CRM for Marketing

Marketing departments are the largest adopter s of social analytics among any department, including IT. From largely experimental to continually forming use cases, social-marketing-type activities assist internal users, customers, partners and other stakeholders in better managing marketing processes for engagement, promotion, and product and service decisions. The five most common use cases of social marketing we have seen to date are:

Idea management: Generating new ideas from individuals and communities, communicating those ideas and implementing them to support marketing objectives. For example, Dell's IdeaStorm, which started in 2007, has generated over 16,000 ideas with over 500 ideas implemented.

New product market research/test/launch: Engaging the community for market research, testing, and feedback for new products and services. For example, Starbucks' product launch of Via instant coffee drove store traffic and taste testing

through Facebook and Twitter promotion by engaging customers to rate and compare different blends.

Brand and reputation monitoring: Listening, developing, strengthening, promoting and defending a company brand. For example, Toyota counteracted negative sentiment around recalls by soliciting positive experiences at Auto-Biography .

Social analytics for marketing: Identification of influencers, customer profiling, scoring, and automatic classification of subject/topic, people and content for marketing objectives. For example, Sephora's identifying and engaging influential customers in Beautytalk influenced 10 times more spending.

Social campaigns: Tracking, targeting segments/individuals within a community (such as influencers), aligning products and services with individual needs, and leading prospects through a buying process by applying specific treatments. For example, the Golden State Warriors engaged customers through a new logo contest and sold $440,000 in season tickets (see "Social CRM: How a $5,000 Investment in Social CRM Yielded $440,000 in Sales" ).

Return to Top

Application Types Used

The main types of social applications used by marketing are:

Social monitoring/social analytic tools: Radian6, Attensity, Telligent, Collective Intellect

Hosted community platforms: Lithium, Jive, Telligent

External social networks: Buddy Media, Vitrue, Hearsay Social

Product reviews: Bazaarvoice, PowerReviews

Return to Top

Benefits Measured

The strongest measurable benefits have been for shortened product-development cycles, using a community for product ideas, testing and improvements in promotion targeting, and using customer product reviews as a promotional and influencing tool in the evaluation stage of a buying process.

Return to Top

Cross-Departmental Link

Social marketing has strong ties with service for areas such as customer experience, as well as links to sales in areas such as lead management and competitor intelligence.

Return to Top

Social CRM for Customer Service

Customer service and IT professionals continue to invest in social CRM in the form of community peer-to-peer support, service feedback, service listen and respond, and service process analysis:

Community peer-to-peer support: This requires tools for content creation and curation, member management and a knowledge management system, all on an agile social platform. Community peer-to-peer support popularly incorporates forums, blogs, wikis and messaging, all within a common space. The purpose of these tools is to foster peer-to-peer and organization engagement to provide business value. Community peer-to-peer support can be conducted within a no-cost environment like Facebook, Google Plus or LinkedIn, or can be done in a branded environment requiring an investment in peer-to-peer community software. An example of community peer-to-peer support is Autodesk, where 53% of subscription customers resolve their issues in the online community, versus the 39% industry average for 2010 (per the Technology Services Industry Association [ TSIA]).

Service feedback: This requires tools for member interaction, surveys, forums and polling. While these tools are not new, the social iteration of them is new. Social feedback can incorporate community panels and personalized surveys, a key component being the visibility of results to the entire community. Intuit's work with a private community panel is a social example of service feedback where the tax and financial management software provider saw a 40% to 60% decrease in the length of its market research cycle, in some cases shortening the cycle from eight weeks to two weeks.

Service listen and respond: This category of social media monitoring software focuses on the detection of potential support situations voiced in a social environment, such as Twitter. These tools can listen for particular terms or context to determine the importance of mentions and the necessary action. Bonobos, an Internet-based men's retail clothier, employed a social service listen-and-respond solution, increasing customer interactions on Twitter and Facebook by 15% in six months, and increasing Web traffic from social channels by 215% in three months (see "Case Study: Tackle Customer Service to Expand Marketing Initiatives Using Social CRM" ).

Service process analysis: This requires the analytical tools to pinpoint precisely where a customer service process falls short. These include measurements such as the time to inquiry resolution, the number of posts, the accuracy of responses, and the number of participants. SlideRocket is a presentation software provider leveraging social CRM for service process analysis by working with social analytics to increase the efficiency of its customer support team.

Most recently, customer service and IT professionals have begun to engage their marketing departments to establish a consistent cross-departmental process and to create a single, positive customer experience.

Return to Top

Application Types Used

The main types of social applications used by customer service are:

Peer-to-peer community software: Lithium, Jive, Telligent, QuestBack Social media engagement software: salesforce.com, Oracle-RightNow

Technologies, Engage121, HootSuite

Social analytics, including sentiment analysis and natural-language processing (NLP): Clarabridge, Attensity, GoodData

Return to Top

Benefits Measured

The benefits of social customer service and support tend to revolve around cutting costs or improving the customer experience. Organizations measure for call deflection, reduction in organization-provided technical support, time to resolution, change in customer lifetime value, customer satisfaction, and impact on trust and brand loyalty (see "Key Performance Indicators for the Top Business Processes for Customer Service and Support" ).

Return to Top

Cross-Departmental Link

Social customer service and support is integral to the customer experience as customers progress through their life cycles. Thus, social customer service has strong ties to both the marketing and sales departments, with the majority of coordination taking place around the customer's experience with the marketing department.

Return to Top

Social CRM for Sales

B2B social CRM represents less than 5% of all social CRM spending, but we expect this to rise to more than 30% during the next three years. A large chunk of this growth will come from the adoption of social CRM sales applications. However, social sales application use cases are currently the least developed of the three (sales, marketing and customer service), and thus far have the fewest examples of measurable outcomes. As

noted in Figure 2, when references were asked their main business case for purchasing the software, just over 5% specifically cited social sales.

Many organizations will wait for their current sales force automation (SFA) vendor (e.g., salesforce.com, Microsoft Dynamics, Oracle's Siebel CRM technology, Oracle On Demand, Sage SalesLogix, CDC Software's Pivotal CRM and SAP) to add social capabilities to their core application, either for free or at a minor upgrade cost. The starting point for traditional SFA vendors is to add an activity-stream-based user interface to blend email, alerts from the SFA tool and external social network sources. However, for those interested in adopting more quickly to gain competitive advantage, there are other options that go beyond pulling LinkedIn contact profiles into SFA or Twitter feeds and alerts.

There are currently three main use cases for social CRM for sales:

Sales social prospecting/frontline research: The use of cloud-based data services to help salespeople maintain up-to-date contact information and/or the use of social networks for prospecting. For example, Frost & Sullivan generated $125,000 from leads generated through its presence on SlideShare in seven months.

Sales social collaboration: Using social networking capabilities for collaboration on processes like competitive intelligence use and tendering. For example, Swiss Re used collaboration tools for virtual teams to work together to assess and underwrite very complex risks, such as pandemics, obesity and rising sea levels.

Sales social analytics: The use of social software for sales analytics, including NLP and semantic analytics.

Return to Top

Application Types Used

The main types of social applications used by sales are:

Social contact management, with data derived from communities: InsideView, salesforce.com's Jigsaw, ZoomInfo

Lead management: CDC Software's Pivotal Social CRM, InsideView, Hubbard One's ContactNet, salesforce.com's Jigsaw

Call planning: Artesian Solutions, Oracle Social CRM Sales Prospector

Sales content management, with social software providing a collaborative environment: iCentera, Oracle Social CRM Sales Library, salesforce.com's Chatter, Savo Group

Social-media monitoring: Radian6, Visible Technologies

Proposal management, with social software providing a collaborative environment: Brightidea Switchboard

Social network analysis: Saba, Trampoline Systems

Return to Top

Benefits Measured

Lead management ultimately presents compelling value propositions for social CRM for sales, particularly with key performance indicators (KPIs) concerning sales-ready leads and the impact on sales cycle durations: number and percentage of leads deemed ready for sales attention, leads committed to sales pipelines, lead velocity, impact on close rates, decreased time invested in lead qualification and early stages of prospecting.

However, companies are also exploring how social software can imbue improvements in turnaround time with proposals, providing sales content and encouraging cross-selling and upselling within sales cycles. KPIs are being crafted to track aspects of the following concerns: RFP response times, bid or proposal cycle times, accepted proposal and quotes, instances of upselling, attach rates, deal size, and reductions in sales cycle duration (specifically with stages concerning needs assessments, proposing solutions and negotiating deal parameters).

Return to Top

Recommended Reading

Some documents may not be available as part of your current Gartner subscription.

"Magic Quadrant for Social CRM"

"Social Software Vendor References Show the How and Why of Adoption"

"How to Determine Levels of Engagement for Social CRM"

"Critical Capabilities for Peer-to-Peer Customer Community Software"

Return to Top

Click To Browse

Social Software ,  Social Computing and Social Networking ,  Social CRM ,  Marketing to Customers ,  Sales Management Return To TopDon't Forget to Rate This Document

Gartner's CRM Application Functionality Categories Spider

Published: 7 December 2011 ID:G00226719

Analyst(s): Ed Thompson | Jenny Sussin

VIEW SUMMARY

Gartner breaks CRM functionality into nine main categories: sales, marketing, customer service, field service, e-commerce, customer analytics, social CRM, voice of the customer and cross-CRM technologies. Each of these has subcategories, of which there are 121 total.

Overview

CRM buyers often have a narrow perception of the types of CRM application technology available. Decision makers often struggle when attempting to understand the variety of software available for CRM, because they are bounded by the limits of specific vendors. This research maps out Gartner's view of what non-industry-specific CRM application functionality is available.

Key Findings

In 2011, about 40% of CRM applications were custom-built, and 60% used packaged CRM applications.

Fewer than 15% of CRM projects in 2011 were transformational and cross-departmental, involving the deployment of a broad variety of functions in a CRM suite. Decisions were usually made in one department to meet the business goals supporting specific processes for that department.

Gartner categorizes CRM applications at the finest level of detail into 121 subcategories; no vendor offers functionality in more than 75 of these types.

Only the smallest of organizations has succeeded in meeting its goals with one CRM application; the larger the organization, the larger the number of CRM applications in use.

Recommendations

Focus on the business strategy and business requirements first, rather than dogmatically selecting a vendor and struggling to improvise with the vendor to satisfy business needs, or composing the initiative to accommodate the vendor.

Expect to engage more than one CRM vendor to meet your goals.

When selecting a CRM application, do not focus solely on the functionality. Use these top-line criteria to conduct a comprehensive evaluation of CRM application vendors: the functionality of the application,

its usability, the technology and architecture, the vision, the vendor's viability, the services the vendor and its partners provide, and the total cost of ownership for the solution.

Use the CRM Functionality Spider to evaluate whether other types of CRM technologies could provide business benefits.

Analysis

How Gartner Categorizes CRM Application Functionality

Since the mid-1990s, CRM technology has been associated with three classic organizational departments:

Sales Marketing

Customer service

Gartner covers a wide range of CRM applications that serves these departments, and puts them in different categories. The categories can be viewed at different levels of granularity. They also alter over time, as new forms of CRM applications arrive and often are absorbed into other categories. The highest level of application functionality currently has nine application functionality categories: sales, marketing, customer service, field service management, social CRM, e-commerce, analytics, voice of the customer (VoC) and cross-CRM infrastructure (see Figure 1).

Figure 1. Nine Top-Level CRM Application Functionality Categories

Source: Gartner (December 2011)

Return to Top

These can be further divided into 43 more detailed areas, as shown in Figure 2. Many areas in Figure 2 are supported by MarketScopes and Magic Quadrants, but not all. For a full list of Gartner's CRM Magic Quadrants and Market Scopes, see "The Elusive CRM Magic Quadrant." Gartner has not produced a Magic Quadrant in all these areas, but responds to inquiries regarding all of them.

Figure 2. 43 Midlevel CRM Application Functionality Categories

Source: Gartner (December 2011)

Return to Top

Over 70% of spending and more than two-thirds of Gartner inquiries are on four of these application categories:

Sales force automation (SFA) E-commerce platforms

Call center call handling

Campaign management

The remaining 30% of spending is spread across the other 39 categories. The majority of buying organizations overlook most smaller categories of CRM application that sit outside the "big four." Ironically, the evidence from Gartner clients is that these smaller categories often deliver higher levels of ROI. We recommend using the CRM Functionality Spider to evaluate whether other types of CRM technology could provide business benefits

These categories can be even further divided into 121 separate applications, as shown in Figure 3, with some duplication. Some vendors, such as Oracle and SAP, provide functionality in approximately 75 of these detailed application functions, working with partners to fill the gaps where they are not represented. Not all these areas will be covered as well as best-of-breed alternative vendors can cover them. Other vendors, such as salesforce.com and Microsoft Dynamics CRM, are present in approximately 25 areas, and choose to build even more partnerships to cover complementary categories of CRM applications. This map is important when exploring CRM vendors, because it shows how Gartner categorizes CRM, and breaks this broad market space into different submarkets.

Figure 3. 121 Detailed Low-Level CRM Application Functionality Categories

Source: Gartner (December 2011)

Return to Top

We often see organizations aiming to deliver a CRM project or program with one CRM application vendor. Only the smallest organizations have succeeded in meeting their goals with one CRM application; the larger the organization, the larger the number of

CRM applications in use. Therefore, expect to engage more than one CRM vendor to meet your goals. No large organization has succeeded in meeting its business goals with one CRM vendor. This is due in part to the political nature of CRM, where different geographies, brands, divisions and departments have different, or even conflicting, objectives. It is also due in part to the need for speed of change in response to customer or competitive pressures, and to the level of innovation that takes place in CRM, as 25 to 30 new vendors arrive in the market each year. For an overview of the variety of CRM vendors that Gartner covers, see "The CRM Vendor Guide 2012."

One common risk we see is an obsessive focus on functionality when selecting a vendor. While the functionality of the application is important, it is not the only criterion to use when selecting a vendor. The top-line criteria we recommend to conduct a comprehensive evaluation of CRM application vendors are the:

Functionality of the application Usability of the application

Technology and architecture of the application

Vendor's vision

Vendor's viability

Services the vendor and its partners provide

Total cost of ownership for the solution

The most common question we are asked about the functionality is whether we expect it to consolidate over time. The answer is yes, in that we would expect the social, analytics and VoC categories to be absorbed into the mainstream categories of sales, marketing, customer service and e-commerce. However, we also anticipate that new categories will appear, and that, as the spider loses some legs, it will gain new ones.

Return to Top

Implications From Gartner's CRM Application Functionality Categories

The implications of the progressively detailed functionality views shown in this document are:

Most organizations underestimate the varied types of CRM applications available, and few use the maximum number of those available to them.

No individual in the sales, marketing and customer service, or IT departments can hope to know all the processes and functionality that can be adopted as part of a CRM project —external help from consultants, analysts or other sources will be needed to learn about the different types in depth.

No large organization will achieve its sales, marketing and customer service business objectives with just one CRM technology vendor — it takes multiple technologies from multiple vendors.

CRM technologies don't stand still; while one area of CRM may be mature and ripe for standardizing and consolidating processes, other areas of new functionality are appearing. To keep pace, organizations need to continually manage a portfolio of different CRM applications with differing levels of maturity.

CRM applications mature at different rates, with some almost disposable, others systems of record and others providing differentiation. Gartner's pace-layered research provides a useful framework for how to manage the CRM application portfolio.

Return to Top

Recommended Reading

Some documents may not be available as part of your current Gartner subscription.

"The Elusive CRM Magic Quadrant"

"How to Get Started with a Pace Layered Application Strategy"

"Applying Pace Layers to Marketing Processes and Applications"

"Apply Gartner's Pace Layer Model to Sales Applications"

"Use Gartner's Pace Layer Model to Structure Customer Service Applications Based on Business Value"