Gartner: Measuring ROI critical to social CRM initiatives

New York -- Although the adoption of social media by sales, marketing and customer service departments continues to grow rapidly, by the end of 2012, only 50% of Fortune 1000 companies will receive a worthwhile return on investment from their social customer relationship management (CRM) initiatives, according to Gartner.

“For the 50% of Fortune 1000 organizations not determining, or even measuring, ROI, ignorance will mean failed projects,” said Adam Sarner, research director at Gartner. “Among the companies who will not see a worthwhile return, only 20% will even have the data to evaluate where their social strategy is falling short. These organizations will be unable to justify future funding.”

During the next two years, the success of social CRM will depend on how well companies and social CRM technology providers can make social CRM projects more than just social objectives by tying them to clear and measurable business objectives. Gartner predicts that by the end of 2012 three-quarters of new social CRM initiatives that receive funding will have a business case incorporating measurable ROI.

Many organizations have established a form of social presence. However, many also lack a clear business performance objective for social CRM, being at early stage in their measurement of its business outcomes.

“Social data, such as numbers of fan pages and weekly Tweets, is not enough to correlate with the contribution of top business objectives,” said Sarner. “ROI, measurable business value and budget justification for social projects are becoming unavoidable topics for many organizations.”

Gartner analysts expect the worldwide market for social CRM software licenses and subscriptions to total $2.1 billion in 2012, up from 850 million in 2011, and that social CRM revenue will represent 10% of the overall CRM market.

Gartner said that business-to-business applications for sales use will have the fastest growth and will account for 30% of social CRM spending by 2015, up from 5% in 2011.

Today, social CRM vendors differentiate themselves on the basis of functions, analytics, ease of use and superior experience delivered through professional services. Over time, however, they will need to show quantified business cases and, more importantly, deliver repeatable social CRM processes that are not yet broadly available.