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Gartner Says Only 50 Percent of Fortune 1000 Organizations Will Get a Worthwhile Return From Their Social CRM Initiatives by the End of 2012

Analysts to Discuss the Future of Social CRM at Gartner Customer Strategies & Technologies Summit 2012, June 11-12, in London, UK

Although the adoption of social applications by sales, marketing and customer service departments continues to grow rapidly, Gartner, Inc. said that, by the end of 2012, only 50 percent of Fortune 1000 companies will receive a worthwhile return on investment (ROI) from their social customer relationship management (CRM) initiatives.

“For the 50 percent 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 percent 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 Mr. Sarner. “ROI, measurable business value and budget justification for social projects are becoming unavoidable topics for many organizations.”

Gartner analysts said they expect the worldwide market for social CRM software licenses and subscriptions to total $1.2 billion in 2012, up from 850 million in 2011, and that social CRM revenue will represent 10% of the overall CRM market.

Initially, social CRM was mostly a concern of marketing, but it now affects every discipline, from marketing and sales to customer service and support. Social CRM is increasingly important to lead generation and cross-selling and up-selling capabilities, and to other functions that are key to successful sales organizations. Gartner said that business-to-business applications for sales use will have the fastest growth and will account for 30 percent of social CRM spending by 2015, up from 5 percent 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 find it harder to gain an advantage by providing unique core functions. They will need to show quantified business cases and, more importantly, deliver repeatable social CRM processes that are not yet broadly available.

“Vendors that can assemble a full set of social CRM functions and make progress in two or more areas, such as marketing and customer service or sales and marketing, will be best-positioned for success,” said Mr. Sarner.

Gartner analysts will discuss the development of social CRM at the Gartner Customer Strategies & Technologies Summit 2012, to be held from June 11 to 12 in London, UK. For more information about Summit, please visit www.gartner.com/eu/crm. Information from the event will be shared on Twitter at http://twitter.com/Gartner_inc using #GartnerCRM.

About the Gartner Customer Strategies & Technologies Summit 2012

CRM is entering a new era in which the focus is much more on the relationship and less on the management. As organizations balance growth and retention objectives, they need to get smarter, think socially and be mobile-oriented. The Gartner Customer Strategies & Technologies Summit will help organizations gain a fuller understanding of the technological, social and economic trends influencing the next generation of CRM.

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Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the valuable partner to clients in over 9,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 6,400 associates, including more than 1,480 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.

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