Category Archive : social business

The Market Size of Customer Engagement Management

Market Size

We are excited that luminaries such as Paul Greenberg, Ray Wang and Dion Hinchcliffe and big league investors such as David Skok are starting to define the market for Customer Engagement Management.

We would love to see more work done by analysts to size up this market.

If Paul is right and this market is going to be the natural evolution of Social CRM and Social Business, then the market will be very large indeed.

The total spend in 2010 on social software was according to Gartner, $770 million, a fraction of the CRM market which was around $15 billion in 2010, $16.5 billion in 2011 and projected to be more than $18 billion in 2012 by IDC.

According to ABI Research, the latest global enterprise social collaboration market forecasts show revenues will reach $3.5 billion by 2016 up from $898.6 million on 2010.

More market validation:

Key consulting firms like Accenture, Cognizant, Infosys, Booz-Allen, CAP Gemini, and CSC either created explicit Social CRM practices or began to compete on Social CRM and Social Business projects.
IBM’s Institute for Business Value, in its 2010 CEO study found that the most important imperative for the next five years for CEOs – 88% of them to be exact – is to be closer to their customers.

Early adopters for Customer Engagement Management solutions such as Totango are all businesses who acquire and service users online, including:

  • SaaS and B2B Cloud Apps
  • Consumer Web Apps
  • Mobile Apps and Games
  • E-commerce Sites


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Beyond Social Business – A Definition of Customer Engagement

Customer Engagement - Shake hands

Paul Greenberg wrote a great blog this week defining Customer Engagement. I am much looking forward to his expanded paper on the topic.

Basically he writes that in 2012:

  • Out: Social Business and Social CRM
  • In: Customer Engagement

What’s the difference?

Ray Wang and Dion Hinchliffe define this more elegantly, but in simple terms CRM Systems hold customer records, whereas Engagement Systems facilitate customer interactions (company-customer and customer-customer).

Customer Engagement is fundamentally about a customer’s 1) voluntary, 2) ongoing interaction with a company and its products or services for the purpose of 3) mutual value creation. So yes, the company should derive value (profits or other KPI), but in my mind key to Paul’s definition of Customer Engagement is the creation of Customer Value.

Customer Value is NOT measured by the time that customers spend interacting with your marketing tools or even by customer loyalty, but rather by – well – the VALUE delivered to customers through your product or service. So if you are going to measure time spent, then focus on the time spent interacting with the product or software itself, rather than with sales and marketing materials. Even better, focus on metrics that are specific to your product or service: Tracey Kaufman from Cloud9 says it all in a recent video blog Your Customer Success is Your Own Success: (in essence) “if the goal of your product is to save customers money, then customer success if defined in terms of money saved (not time spent)”.
So, when you speak about Customer Engagement next, make sure to think not just about Customer Engagement before purchase (sales and marketing interactions) but especially about Customer Engagement AFTER purchase (using your product or service).

At Totango, we can help you model your customer lifecycle and define customer actions that correlate directly with customer value created. We recommend that you segment your customers in groups depending on whether or not value was delivered to them. Your customer success team can use this information to help lagging customers along. Your sales and marketing teams can use the actual benefits customers have gotten as a tool to up sell (at Totango we prefer “up serve”).
If you focus on Customer Value, the rest, including and especially customer referrals, will follow naturally.