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Social media analytics software, software that analyzes social media data for useful information about a company, product, or brand, is reaching a rather limited market right now. There are two major types of customer for these products; large multi-national multi-brand companies and the advertising and marketing agencies that serve them. Think of this as the corporate one percenters. As marketing organizations strive to become more data driven and analytical, one of the better tools for ascertaining how consumers feel about a company and who is influencing their buying decisions is designed and priced for a small fraction of companies.

Pricing generally falls into two categories – expensive and really expensive. The pricing bands center around two midpoints of US$25,000 per year and US$100,000 per year. For enterprise software that touches much of a company such as a CRM or ERP, that’s not outrageously expensive… at least for a large enterprise. For a small to medium enterprise (SME), on the other hand, that is a boatload of money. SME companies sweat spending $400 per user on Microsoft Office even though the products in the suite are critical for knowledge workers. They cringe at spending $5,000 a year on software maintenance agreements that are essential to their survival as a company. Spending $25,000, $50,000, or $100,000 per year for software to scan social media for customer attitudes and influences would seem insanely expensive to them. Vendors can talk value all they want but raw dollars is important when you don’t have unlimited funds.

Unlike a lot of other enterprise software, social analytics doesn’t touch everyone in the company, especially at the moment. The argument can be made that there are a lot of uses of social media analytics aside from marketing – service, supply chain management, etc. That’s not where the market is right now. Instead, social media analytics is mostly used for brand management and market intelligence. For software that is mostly used by a few sales or marketing folks this seems like an extraordinary amount of money. While brand and market intelligence drive revenue, for the SME market more direct lead generation efforts are much more important.

Simply put, most social media analytics software is too expensive for the SME market and even many large enterprises. There are some lower cost options but they are much more limited. Often, the number of social media accounts or the types of analysis are severely restricted, or customers get analysis on data that is not close to real-time. This sends one of two messages to potential customers. First, social media analysis only matters to giant brands. Or, social media analysis matters to everyone but we (the vendor) don’t care since we can squeeze better margins form the biggest of the big. Either way, when that top segment of the market becomes saturated and vendors start looking to everyone else for growth, they may not find a particularly receptive audience.

There is a glaring hole in the SME market for social media analytics. Now, if someone can only fill that with a sub-$5000 per year offering there will be many happy customers to buy it.