What Salesforce.com’s Acquisition of Radian6 Means for Businesses

Wow! The announcement yesterday that Salesforce.com is acquiring Radian6, the market leader in world of social media monitoring (used by over 50% of Fortune 100 companies) is pretty...

Customer Engagement Landscape

Wow! The announcement yesterday that Salesforce.com is acquiring Radian6, the market leader in world of social media monitoring (used by over 50% of Fortune 100 companies) is pretty dramatic by the standards of any industry.

While the world has tumbled into and through recession, the monitoring industry has been booming over the past 2 years. Radian6 has been leading the pack, but strong players like Sysomos (another Canadian company, recently acquired by Marketwire), Synthesio (based in France), Brandwatch (a UK company that just secured investment), plus the old guard like Visible Technologies, Crimson Hexagon and new players like Ubervu and ViralHeat have made this one of the most innovative and exciting industries to be part of.

Yet monitoring is only one stage in the customer engagement cycle.  In social media marketing we often talk about the need first to listen (i.e. monitor social media), then to engage, and finally to connect. Some monitoring solutions, such as Radian6, have started to offer engagement features – to manage and reply to online mentions – but this has been better achieved by the equally vibrant dashboard market, with players such as Hootsuite (the market leader), CoTweet (for team collaboration) and MarketMeSuite (much more marketing-focused),

But engagement is about as far as the social media marketing industry goes today. What comes next is building a relationship.

This is where we leave marketing and move into what has traditionally been called customer relationship management (CRM). He we have a large and thriving industry with solutions from giants like SAS, Oracle and more recently Salesforce.com, that has been focused on how we manage our customer data and relationships within our companies. In other words, more internal than external communications.

Since this is the more established market with billion dollar players a-plenty, it was somewhat inevitable that these giants would start to snap up the larger and more profitable monitoring companies. While CRM companies have been good at producing robust tech solutions, it makes sense to “socialise” their solutions through the acquisition of social media solutions (and teams) rather than try and build newly open solutions from the ground up. As you can see from my diagram above, the Salesforce.com / Radian6 connection is an almost perfect match.

So what next? Well, as we move towards an end-to-end customer engagement process that includes monitoring, engagement dashboards and CRM, I think the next changes are likely to be within companies. Most companies aren’t currently structured in way that makes managing customer relationships (not data) cross-departmentally workable. As Brian Solis pointed out in his recent visit to London, the “socialisation” of businesses is only just beginning and – to be successful – it’s going to require the whole organisation to understand what customer engagement, as defined by our recent experiences in social media, truly means.

Salesforce.com will be speaking at Social CRM 2011 in London on 6th May. Early Bird tickets @ £145 are available from the ticket site now.

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  1. Avatar

    Anonymous Reply

    Thanks for the mention! What big news! Do you know how much the acquisition was for?

    1. Avatar

      Luke Brynley-Jones Reply

      Around $350 million. Not crazy, but significant.

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    James Ainsworth Reply

    Customer engagement is going to get a lot more focussed and see an actual delivery, rather than theoretical musings of “Social media could do this…”

    This acquisition validates the importance of social media monitoring as something all organisations must embrace and yes it will bring attention and focus on the possibilities of sCRM but that is still just one niche of the range of opportunties social media monitoring can deliver a business.

    This union not only validates the market, but it brings social media marketing to the masses and sets the stage for a deeper dive into social media insights. Simply having access to social media monitoring tools is not enough; marketers must understand how to analyse and act on the data they collect, incorporating it into the broader marketing mix. Listen outside the box.

    With Salesforce.com’s core business being customer service and lead generation, it makes sense that the newly forged companies will focus on helping companies build social CRM strategies. However, one of the true values of social media monitoring remains in its data, insights and the way it can therefore be used to understand and shape the business and marketing strategy.

    James Ainsworth
    Community Manager for Web & Social Solutions – Alterian

    1. Avatar

      Luke Brynley-Jones Reply

      Thanks James – that’s more of a mini-post than a comment – but a good one! So what’s Alterian’s take on this? Are you chasing the sCRM vision – or waiting to be gobbled up by one of Salesforce’s competitors?

      1. Avatar

        James Ainsworth Reply

        Brevity sometimes goes out the window when you are passionate about a subject. Alterian are very much excited by the implications of the acquisition for the industry. As I say, sCRM is one aspect of monitoring, we are still very much focussed on delivering valuable insight services to our clients, as evidenced by our acquisition of Intrepid last year.

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    Sergei Dolukhanov Reply

    Excellent article, Luke! I agree that the next step is managing customer relationships. I like when you say:

    “So what next? Well, as we move towards an end-to-end customer engagement process that includes monitoring, engagement dashboards and CRM, I think the next changes are likely to be within companies. Most companies aren’t currently structured in way that makes managing customer relationships (not data) cross-departmentally workable.”

    I also have some interesting feedback for you regarding the folks here at EvoApp and what we’ve been able to do in this new customer relationship industry. Heres a brief segment about EvoApp (a budding Durham-based software startup):

    EvoApp’s software is a centralized portal that does volumetric and sentiment analysis for all forms of indirect AND direct communications including, but not limited to, emails, phone calls and social media posts such as twitter, blogs, social feeds etc. You can use the social media module to look at before and after marketing campaigns, monitor social media, search for keywords, and do competitive analysis, etc.

    On the other hand, you can use the direct communications module (this is the amazing part) which archives and rates the polarity (positive to neutral to negative) of your customer’s communications to the company by tying into the email, phone, etc.This module I.D.’s problematic discussions quickly and allows you to pre-emptively rectify customer issues. It also allows your company to collaborate and interactively communicate through a central portal, giving executives the power to understand and analyze every aspect of communication within the company. EvoApp in a nutshell: an interactive, integrated communications hub for visualizing, analyzing and interacting with the entire communications heartbeat of an enterprise.

    We have dubbed this entire hub the next level up from social media monitoring or CRM as “Relationship Intelligence”, as we are approaching the next level of communication tools that you speak of in your article. I hope this can shed some light on some of the masterful technology available in this day, and once again thank you for the excellent article!

    Sergei Dolukhanov
    Director of Marketing, EvoApp, Inc.

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    Dominique Lahaix Reply

    Hello Luke,

    Thanks for the article.

    I think your chart (and the industry in general) is way over simplifying. There is no such a thing as “customer engagement”. Brands need to build different strategies and approach to engage with:
    – influencers and people as media
    – most valuable customers
    – non customers
    – out of target people

    Taking these different type of target. The objectives, the ressources that they need to employ (ther own people, agencies, …), the time that they need to dedicate, the platform (response oriented versus relation oriented) are different.

    Frankly, Radian6 and SF are a perfect match for call center agents (hence the Customer Control Tower that R6 built for Dell and other) , maybe for sales people – although I would go for Linkedin and Jigsaw, and brand marketers and product marketers currently get little value from Salesforce so far and I doubt this acquisition help them much.


    1. Avatar

      Luke Brynley-Jones Reply

      Thanks for your thoughts Dominique. The chart is designed as a simplification, but I would disagree completely on your point about customer engagement. There are, of course, other stakeholder groups that aren’t customers – but by connecting customers (and potential customers) with staff and internal communities via sCRM solutions and processes, genuine customer engagement becomes a realistic goal. I know of many PLCs and large organisations that are focusing on exactly that – so I would sincerely hope it exists.

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