CUSTOMER EXPERIENCE MANAGEMENT MARKET ANALYSIS

The global customer experience management market size was valued at US$ 9.6 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 13.46% from 2022 to 2030. The market is driven by a number of factors, such as the need for improved customer retention and engagement strategies, growing demand for personalized experiences, increasing focus on AI-based technology solutions, and growing adoption of big data and IoT technologies.  

Global Customer Experience Management Market: Regional Insights

North America is anticipated to show substantial growth in the global customer experience management market over the forecast period. This can be attributed to growing emphasis on medium and large-sized enterprises to offer multichannel services for delivering a seamless customer experience in all touch point channels. Moreover, organizations across the region are increasingly adopting business analytics tools such as speech analytics, sentiment analytics, and text analytics. These efforts are likely to support companies to gain more knowledge from unstructured data gained from customer interactions for providing improved digital services. Thus, the region is expected to show strong growth in the market over the forecast future.

Furthermore, Asia Pacific is expected to gain major share in the global customer experience management market over the forecast period, owing to countries such as Japan, Singapore, China, and Australia that are pioneers in omnichannel. Moreover, the region is observing growing trend of ‘phygital’ (providing digitally-enhanced offline experiences), which helps the customers to move between various devices or platforms seamlessly, while continuing with the interaction with a brand or company. This trend is likely to continue in the region, which is likely to boost growth of the market across Asia Pacific in the near future.  

Figure 1. Global Customer Experience Management Market Share (%), By Region, 2022

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Global Customer Experience Management Market Drivers:

Increasing adoption of automation, cloud-based technology, and advanced analytics to boost the market pace

Data integrity is known to be a major factor driving the customer experience, and now it is leading to growing shift among enterprises toward automation, cloud-based technology, and advanced analytics. With these tools, access of companies to data remains up to date. The use of cloud-based technology offers provision of data consistency, which further drives the demand for these tools. Due to the management of data feeds in cloud-based repository, achieving consistent distribution and management of data in the internal system of an organization becomes possible. This further ensures that customers get real-time update, which is an important factor of enhanced customer experience. Thus, increasing adoption of these tools is expected to drive growth of the global customer experience management market during the forecast period.

Rising demand for personalized customer experience to propel the market growth

Personalized, enhanced customer service along with the quality of the service/solution is required for development of a business. Customer retention and customer satisfaction are the most important aspects of enhanced customer service. Enterprises across various industries are finding ways to leverage the advantage, which is hard to imitate for competitors through offering highly personalized customer experiences. These experiences use proprietary data in order to provide a better experience to several customers. The end results however are dependent on the execution, which can allow businesses to differentiate themselves and also achieve customer loyalty as well as sustainable competitive benefit. Thus, these factors in turn are expected to fuel growth of the global customer experience management market during the forecast period.

Global Customer Experience Management Market Opportunities:

Growing adoption of AI is expected to bring multiple growth opportunities in the global customer experience management market during the forecast period. AI is expected to drive success of customer experience through AI-driven data collection and measurement, enhanced chatbots, and actionable intelligence to predict modeling. The Ai interactions in customer experience space enabled by natural language communication are continuously increasing. Conversational communication with Chabot with the use of natural language in chat and voice, especially in support channel is likely to make AI chat vague from human agents of customer service. Thus, adoption of AI in customer experience field is likely to offer various growth opportunities in the coming future.

Growing demand from telecom sector is anticipated to create major opportunities in the global customer experience management market over the forecast period. The demand for broadband services continues to remain strong and higher, even during the global pandemic of COVID-19, as several industries adopted isolation measures and remote working. This in turn increased telecom spending. Moreover, the existing increasing demand for cloud infrastructure services and a strong increase in specialized software is likely to drive the growth of customer experience management solutions. As several academic institutions began online classes, the demand for telecom services and communications tools increased all over the world. This is further expected to offer several lucrative opportunities in the global customer experience management market over the forecast period.

Global Customer Experience Management Market Trends:

Growth of hospitality industry is a growing trend in the market

Hospitality industry is one of the end-user industry of customer experience management solutions, which increasingly growing in terms of customer experience. The market is thus, expected to show strong growth with increasing growth of this industry and continuously changing customer expectations. The hospitality industry is majorly impacted by AI, as hotel owners are using AI to keep a check on the messages being exchanged by customers about their amenities, property, stays, and services. Thus, increasing growth of hospitality industry is expected to drive demand for customer experience management solutions. This trend is likely to continue in the market over the forecast period.

Growing investment in CX solutions is a recent trend in the market

In the coming future, the demand for an Omni channel service experience is likely to grow among customers. Along with this, real-time messaging is likely to outgrow email, and as the adoption of remote work is increasing with customer success, it will be a key competitive differentiator. These changes are taking place at a highly rapid pace, due to which competition in the market is growing immensely. This in turn is driving the investments in the customer experience management market, which is likely to continue in the market over the coming years.

Global Customer Experience Management Market Restraints:

Issues regarding data privacy and security to impede market growth

The privacy and data security issues along with ethical use of gathered data are likely to adversely impact the use and deployment of CEM solutions. Enterprises have to be clear about the intentions of collecting and analyzing data, and the advantages they gain from using these solutions. In the age cloud technology, data security is one of the persistent problems. The incidences of data breaches and cyber-attacks are increasing across the globe. This further exposes the customer data to misuse. Thus, issues regarding data privacy and security in CEM solutions are expected to hinder growth of the global customer experience management market over the forecast period. However, market players are focusing on developing data security solutions for these services, which is likely to support growth of the market in the near future.

Increasing regulatory compliance to hamper the market pace

Government of countries across the globe are implementing new regulations in response to increasing data breaches. These regulations enable data security and protection. For instance, in May 2018, the European Union introduced General Data Protection Regulation, which provides data protection regulations as well as monitors behavior of a person in the European Union. These regulations have to be followed by CEM solution providers, while leveraging data of their customers. Such regulations by governments around the world are expected to hinder growth of the global customer experience management market during the forecast period.                         

Figure 2. Global Customer Experience Management Market Share (%), By Component, 2022

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Global Customer Experience Management Market Segmentation:

The global customer experience management market report is segmented into Component, Deployment, Organization Size, Touch Point, and Application

Based on Component, the market is segmented into Solutions, Services (Professional Services, Managed Services). Out of which, Solutions is expected to dominate the global market over the forecast period and this is attributed to the growing competition among market players, as the market entry for new vendors through digital platform is easy. This in turn is leading to the customer experience of existing or potential customers providing businesses with a major competitive advantage. Thus, solutions segment among component is likely to show strong growth in the near future.

Service segment is also expected to witness significant growth in the near future and this is owing to the increasing number of market vendors offering customized solutions either on-premise or remotely. Professional services segment includes different types of professional services provided by vendors, such as tailored and flexible services, training, integration and deployment, and support. The demand for these services is increasing rapidly, which is expected to support growth of the market.

Based on Deployment, the market is segmented into Cloud, On-premise. Out of which, Cloud is expected to dominate the global market over the forecast period and this is attributed to the growing smartphone and internet usage, providing easy access to customers to information about various services and products  in different channels such as social media, web, and others. The demand for cloud deployment is further increasing in several industries, which is likely to propel growth of this segment.

On-premise segment is also expected to witness significant growth in the near future and this is owing to the constant demand for on-premise solutions. Even though popularity of cloud solutions is increasing rapidly, there are some shortcomings to this solutions, such as lack of proper security measures to protect data. Thus, on-premise solutions continue to be in demand among several industries. This in turn is anticipated to support growth of the segment in the coming years.

Based on Organization Size, the market is segmented into SMEs, Large Enterprises. Out of which, SMEs is expected to dominate the global market over the forecast period and this is attributed to the growing adoption of customer experience management solutions in SMEs around the world. The demand for better customer experience is increasing, which is leading to growing awareness about customer experience and profitability among SMEs. This in turn is expected to drive this segment’s growth in the market.

Large Enterprises segment is also expected to witness significant growth in the near future and this is owing to the rapidly increasing adoption of customer experience management solutions in large enterprises due to affordability as well as the large scale economies of these organization, which allows them to deploy these solutions. Moreover, due to increasing digitalization and investment in customer engagement solutions, the segment is likely to flourish in the near future.

Based on Touch Point, the market is segmented into Telephone, Email, Web, Social Media, and Other Touch points. Out of which, Telephone is expected to dominate the global market over the forecast period and this is attributed to the increasing popularity of VoIP phone systems. These systems allow to view all the important data about missed calls, abandoned calls, with Queue Stats. Telephone is a most used way to gain information regarding customer experience, as it is considered to be the most convenient way to contact customers with a business through oldest and simplest of support channels.

Email segment is also expected to witness significant growth in the near future and this is owing to the widespread use of email for customer interaction. Today, major amount of customer interaction is carried through emails. When a customer receives an automatic welcome email, the business is trying to create an experience with the brand for customers. This method is used widely across several industries. Thus, the segment is likely to show increasing growth in the market over the forecast period.

Based on Application, the market is segmented into BFSI, Retail, IT and Telecommunications, Healthcare, Manufacturing, Government, Travel and Transportation, and Other Applications. Out of which, BFSI is expected to dominate the global market over the forecast period and this is attributed to the growing usage of smartphone for conducting banking transactions. This has enabled more personalized engagement, further facilitating smooth banking experience for customers through mobile channels.

Retail segment is also expected to witness significant growth in the near future and this is owing to the increasing shift towards an omnichannel model for giving apt customer services and support at all the touchpoint. Moreover, the increasing competition of product pricing and lack of product differentiation in the retail sector is also encouraging retailers to build efficient management strategies in order to develop competitive edge. This is further expected to boost growth of the segment in the global customer experience management market during the forecast period.

Global Customer Experience Management Market: Key Developments

In August 2020, Oracle Corporation introduced a new updates to its Oracle CX Marketing in the Oracle Cloud Customer Experience for helping companies gain more knowledge about customers and have an impactful customer interaction.

In January 2020, Adobe announced that it is moving its Experience Manager Services to the cloud for providing secure and scalable content management applications in the companies.

In May 2020, SAP SE introduced series of updates to its SAP Cloud ALM solution. This cloud-based application lifecycle management (ALM) solution helps companies in tracking and managing the customer requirements of cloud solutions from SAP.

In September 2020, Avaya Inc. along with Telarus, announced that it will offer the novel Avaya Cloud Office by RingCentral UCaaS solution to the company’s network of extensive partners in the U.K.

Global Customer Experience Management Market: Key Companies Insights

The global customer experience management market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global customer experience management market are MaritzCX Research LLC (Inmoment LLC), Adobe Inc., Medallia Inc., Oracle Corporation, Clarabridge, SAP SE, Sitecore, IBM Corporation, Zendesk, Avaya Inc., Open Text Corporation, Verint Systems Inc., and Tech Mahindra

*Definition: Customer experience management (CXM) is the process of delivering a great customer experience across every touchpoint and ensuring that customers remain loyal to the brand. It is a core part of any customer-first strategy and helps to drive customer satisfaction, reduce churn and increase revenue and loyalty.