CRM (Customer Relationship Management) has, in the past decade, been completely redefined by the social media marketplace. And while traditional telephone-based customer support and sales continues to account for a large proportion of customer engagement for large companies, this state of affairs is rapidly changing. In the new world of Social CRM, smaller, more agile companies are filling the gaps in which up to 70% of customer complaints and queries made via social media go ignored every day.
American IT research and advisory firm Gartner, has been pioneering the use of the “magic quadrant,” in business analysis for the past decade. Magic quadrants analyze CRM system vendors on two scales, the “completeness of vision,” and “ability to execute.” A Gartner magic quadrant looks like this:
In its recent study and analysis of CRM Customer Engagement Centers, Gartner ranked 15 vendor companies in the customer engagement space, using these metrics. Here is an overview of the results of that study.
Goliaths Continue to Dominate the Market
Salesforce.com, Microsoft, and Pegasystems
As seen in the quadrant, Salesforce.com ranked highest among vendors both as a thought leader, and in their ability to execute their vision. According to the analysis, Salesforce.com grew its revenue by 35% year-over year in 2013, and 40% of that revenue growth came from the Service Cloud line, making it the CEC vendor leader. Unlike the others ranked highest in the categories of thought leadership and vision, Salesforce.com is also an “online native,” company, and did not make the same transition from hardware and software sales in the pre-social landscape, to customer engagement software and Social CRM. The paper also notes that salesforce.com’s cloud solutions are supported by a strong user interface, and good integration with back-end systems, like Oracle ERP, SAP and telephone systems.
Among salesforce.com’s weaknesses, Gartner lists the complexity of system maintanence for large, customized systems, lack of transparent pricing, and weak presence in South Ameria, Asian and Eastern Europe. They also predict that salesforce.com will have trouble making the transition to providing these same services to large B2C institutions such as banks, insurance companies, and major retailers with large legacy systems and homegrown systems already in place.
With its 2013 acquisition of Antenna Software, and more than 2,500 employees worldwide, Gartner also predicts rapid growth for Pegasystems, with big bets on mobile technology as the future for interfacing with customers via social CRM, using customer engagement centers.
In addition, the strengths of a deep and well developed software base can be seen in the continued dominance of Microsoft, which blends customer acquisition, support, and campaign marketing channels with the support of its suite of enterprise software. These products lend Microsoft using corporations a built-in depth of tools and experience, and integration with many existing systems, making Microsoft, one of the world’s largest vendors, attractive for large-scale customer engagement operations.
Smaller Challengers May Define the future Marketplace
Interesting new developments are occuring in this industry. As the tech landscape changes, and smaller, more agile companies look for world-class CRM solutions, they are increasingly finding alternatives to large-scale vendors in smaller, equally agile CRM providers. This trend is easy to see in the Gartner Quadrant for Contact Center Infrastructure, in which several challengers threaten the security of mammoth incumbent companies.
Avaya, Interactive Intelligence, and Zendesk
Along with the incumbent Cisco and Genesys, these market leaders are joined by Avaya, which with its recently increased emphasis on “enabling companies to master the “omni-channel” customer experience,” has remained among Gartner’s market leader section since its own inception, 14 years in a row. Avaya offers a fully integrated customer service platform, including self-service, assisted support, reporting, agent management and optimization. The effect is to present a less fragmented, less ad-hoc engagement structure that leads to greater efficiency, and better brand loyalty.
With their Customer Interaction Center, a highly integrated application suite, Interactive Intelligence’s product line appeals particularly to IT decision makers, who find that their efficient use of server space, and clear and useful management tools make the CIC easy to scale and implement. By offering hosted, web-based services, as well as local and regional data hosting, they provide a great deal of flexibility for mid-to-large scale companies who may need both local and internationally hosted data centers.
Still, Interactive Intelligence’s products don’t necessarily match the redundancy and scale of the larger competitors, and may be weaker in certain geographic areas (such as Asia). As well, their locally hosted solutions have technical limitations (they are based exclusively on windows server platforms) that should give large companies with large and complex operations some pause in working with them.
Zendesk, among the youngest companies Gartner includes in the study, was founded only 7 years ago. Still, it is ranked highest in client satisfaction for technology implementation, and it trades primarily on its unique focus on a beautiful, easy to use interface, which emphasizes the importance of job satisfaction among customer service agents. While larger vendors focus on CRM as a compliment to their other verticals, Zendesk is a purely SaaS product, which allows it to be scaled to small and medium sized operations easily, and at a much lower cost, opening up new opportunities to compete, especially in the Social CRM space, for smaller and challenger companies.
Design and Experience Taking Precedent
While pure SaaS products have their challenges in competing with the likes of Cisco and Microsoft, who have experience in the full stack of verticals involved with customer care and engagement, Gartner highlights this trend as an important mark of what may be coming in the next few years, as more and more companies compete in this space on the strength of their UI and design principles, rather than their mastery of all the technology involved.
As Social CRM and mobile-first customer engagement becomes a more mature industry, these SaaS challengers may quickly find themselves in an enviable position, perfectly placed to sell themselves on their merits as user-focused, rapidly iterating and improving platforms for customer engagement. Companies like Brand Embassy, Conversocial, and Spark Central are leading innovation in this field of off-the-shelf Social CRMs. As highlighted by Forrester in a recent white paper, the cost of failure in CRM implementation is traditionally very high, but the new availability of pure SaaS products may signal a sea-change in the industry, where smaller and medium sized companies enjoy growing access to world class CRM products.