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Does CRM need to be social?

In case you haven’t noticed, 2012 is the year in which businesses are supposed to get more social.

Collaboration solutions are getting a makeover, thanks to the help of social business software companies such as pioneer Jive Software. Customer service is getting more social, through applications from the likes of Lithium and Yammer. Marketing and public relations activities are being transformed through social media.

And, increasingly, people are starting to talk about so-called social CRM — technologies that more closely integrate all of the above with customer relationship management systems.

The big question for solution providers, both as an internal business strategy and as a consideration for their clients, is whether being social pays off.

This issue is something I follow pretty closely for one of my other blogs. Just this week, I reported that a new survey suggests that close to 60 percent of midsize and larger businesses are using social media as part of customer service. In fact, many of the companies that are doing this have been doing so for two years.

But a different research set from Gartner predicts that it will be difficult to gauge the return on some of these investments, especially those related to social CRM.

By the end of this year, only 50 percent of businesses will actually be able to measure their ROI related to social CRM applications, according to Gartner. For technology solution providers, that could mean a shut down in funding. Noted Gartner research director Adam Sarner:

“For the 50 percent of Fortune 1000 organizations not determining, or even measuring, ROI, ignorance will mean failed projects. Among the companies who will not see a worthwhile return, only 20 percent will even have the data to evaluate where their social strategy is falling short.”

This year, social CRM deployments will account for about 10 percent of overall CRM software license and subscriptions, Gartner figures. The overall revenue expected for the category this year will be $2.1 billion, up from $850 million in 2011.

Clearly, it is important for VARs and manager service providers to build a strong business case for their clients when steering them toward the social CRM realm — one that they should endeavor to track and to measure moving forward. Or, it could be difficult to find future funding for these initiatives, no matter how sexy they seem.

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