The 2012 Social CRM Tragic Quadrant
Posted by Jeff as Enterprise Software
Last week the respected industry analyst firm Gartner Group released their 2012 Social CRM Magic Quadrant. For those of you who follow these proclamations, the inside baseball crowd, the MQ is an event unto itself and despite what anyone would suggest, it really is all about the 2×2 chart.
The methodology of the MQ is rigorous, focusing on vendor positions, customer references, and product offerings. The coveted position is upper right quadrant, the intersection of the “visionary” and “ability to execute” axis, and typically the landscape changes incrementally reflecting the arduous pace of change in any technology solution segment.
Companies trumpet placement in the MQ as an approving nod from Gartner that they have passed muster and represent a safe choice for organizations in the market for such a product. It has been like this since the 1990’s and will no doubt continue into the future.
(Full disclosure: Get Satisfaction did not participate in the MQ process, in fact we asked to not be included and did not submit any material to Gartner but they evaluated us and placed us in the Niche quadrant.)
The Social CRM MQ always sparks debate, about the placement of vendors and more significantly about the methodology employed to evaluate the vendors. This year is no exception.
Gartner defines social CRM as
- Encourage many-to-many participation with customers, prospects, selling partners and internal staff.
- Capture and share user-generated data and content.
- Cede control to the community by providing varying levels of autonomy and engagement levels.
- Demonstrate a mutual, balanced purpose for company and community use.
Leading to the benefits of successful social CRM strategies, which are, according to Gartner:
- Building trust
- Gaining customer insight
- Differentiating products or services
- Increasing sales
The stated #1 benefit is “building trust” but here we get into the soft center of the entire social CRM market, which is the ability for any product or service to “build trust” if the organization deploying it does not itself define “building trust” as an organizational value. Is Gartner asking the right things or are they throwing in things that any software provider by itself is incapable of achieving on behalf of a customer? In other words, are they evaluating what is achievable with a good social product or they holding vendors accountable for the aspirational goals of social technologies in general?
Of the four benefits the most tangible is #4, increasing sales, but this is the one that causes the most consternation for companies implementing social strategies. What is the value of a tweet, shared Topic, customer interaction, and Like? We have theories and models but the fact remains that the economy of social engagement is being defined on a day-by-day basis and modeling the ROI of social interactions is highly theoretical (for a good read, check out the paper Social Dollars: The Economic Impact of Customer Participation in a Firm-sponsored Online Community and McKinsey’s breathtakingly deep report on The Social Economy: Unlocking value and productivity through social technologies)
More problematically is that after starting out by defining social CRM as a set of values, Gartner then proceeds to evaluate vendor offerings not on how they contribute to the stated organizational values but on the functionality, use cases, and vendors attributes… which in the end is pretty much all they can evaluate.
In each Vendor Profile the strengths and cautions line up according to attributes that have little to do with how companies are taking advantage of the solutions; rather the primary critique of the MQ is on based on evaluation through an IT lens. The fundamental challenge remains that Gartner is attempting to evaluate solution providers according to the business strategies their customers will adhere to… social CRM is, as defined by Gartner in the first sentence of the opening paragraph: “Social CRM is a business strategy…”.
As a result, the proclaimed leaders in the MQ are what they always are… well capitalized, suited-based offerings, and in 2012 we saw little movement from 2011, which itself saw little movement from 2010. I predict that in 2013 the map will look pretty much like 2012, barring any acquisitions in which case the names will change but the offerings will remain the same.
Broadly speaking, how can the same companies hocking the same products be declared leaders when the market itself is recognized as highly dynamic and fluid? More significantly, when has IT led any organization when it comes to values and capabilities related to customer engagement and experience? Mitch Lieberman states the case well:
“Social CRM does NOT need a quadrant. What companies need is help understanding how to humanize their CRM practices.”