- By Keith Kirkpatrick
- July 29, 2021
The goal of providing a good CX is certainly not new; smart organizations have realized that mutually beneficial, long-lasting relationships with their customers usually have a positive impact on the company’s bottom line. While some companies have been making investments in new, more powerful integrated platforms and applications to support these efforts, the 2020 COVID-19 pandemic served as a catalyst for making CX top-of-mind for both companies and their customers.
As businesses pivoted to remote-only and low-contact physical operating models, providing an efficient and friction-free CX, across all channels and functions, became a priority for most businesses, both business-to-consumer (B2C) and business-to-business (B2B). Ultimately, improvements made to drive better experiences are powered and enabled through organizational change management, which is often best applied via a top-down approach, with appropriate levels of oversight to ensure best practices are followed consistently. However, software can be used to support these initiatives, as they can provide access to a plethora of customer data that is captured and aggregated from a variety of sources.
Dash Research has published its CX Market Forecasts report, which discusses the drivers of spending on CX software and services, illustrates which segments and industries are likely to see the most investment over the next several years, and provides a market forecast that spans 20 industries and covers the B2B and B2C software and services opportunity related to CX. Taking 2019 as a base year, the 2020 to 2026 forecast is broken down into a variety of segments, based on the region in which the software is used, the offering itself (software platform, service, or software application); functional area (customer data & analytics, customer relationship management (CRM), contact center, personalization & optimization, customer data platform, customer feedback, and employee experience); and industry. Dash Research projects that that overall revenue for CX/customer engagement (CE) software and services will reach $100.3bn by 2026, up from $68.1bn in 2019, reflecting a 2019–26 CAGR of 5.7%. Most of the spending will be concentrated in North America, Europe, and Asia Pacific region. While the COVID-19 pandemic caused a dip in revenue in 2020, Dash Research projects that the market will fully rebound by 2022, and accelerate in 2023 and beyond.
Some of the other key insights from the report and forecast include:
- Telecommunications, financial services, healthcare, and retail are the top industries for CX/CE software and services spending. These industries are marked by intense competition, are awash in customer data, and, on a revenue basis, were minimally impacted by the COVID-19 pandemic.
- Customer data & analytics, CRM, contact center, and personalization & optimization are the largest functional areas for software and services spending across the forecast period, though employee experience is expected to grow over time as end companies and vendors increasingly focus on this functional area.
- More than ever, customers expected personalized experiences across all channels, but retailers and distributors, in particular, were forced to create seamless online and offline CXs, driven by the buy online, pick up in store (BOPIS) model that accelerated during the pandemic.
- A key strategy being deployed is meeting the customers where they prefer to communicate and do business, which can incorporate a wide range of channels (online via websites, mobile devices, chat, social media, or in stores, or any combination thereof). The key is using intelligent software that can provide seamless interactions between customers and the company, while removing points of friction.
- This omnichannel approach to CX/CE is now viewed as table stakes for both B2C and B2C organizations; the increasing use of digital tools and products has driven customers to demand the ability to contact and interact with companies on the customer’s terms.
- Despite the use of APIs, there is still a significant need among larger end-user companies to customize and integrate disparate data sources; it is expected that consulting and services revenue will continue to drive much of the spending in the marketplace. Smaller vendors may be less reliant on consulting revenue, and instead are building their tools and platforms to be deployed in parallel with large sales or CRM platforms.
For more details on the full CX Market Forecasts report, please click here.
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