Keith Dawson's Analyst Perspectives

The breadth of customer experience (CX) solutions created by software providers in recent years has expanded into new areas, usually related or adjacent to existing, more traditional toolkits. Most providers in the space began as more-or-less pure play contact center software providers, so the CX toolset starts with that set of technologies. Products are grounded in core functions for service delivery, like interaction handling, labor management and customer tracking. Some software providers have come into the CX space from other starting points, notably customer relationship management (CRM) and marketing technologies, so they start with a different core toolset, often expanding to add contact center functions. The features aimed at contact center operations are very well-explored and thoroughly understood by both buyers and sellers. Over the years, buying patterns for specific aspects of the portfolio wax and wane, but for the most part someone planning an RFP for a generic contact center knows exactly what they need and (mostly) what features they need to focus on. It is true that the details have changed somewhat in recent years thanks to advances in artificial intelligence (AI) and automation, but the essential service delivery goals remain the same: efficiency, cost control, productivity and CSAT. So, while the basic contours of a CX platform are fairly clear, the bundle of possible components one might find in the suite are shifting. Providers are opportunistically developing or acquiring to feed the gaps that they perceive, mostly around areas that build on the familiar core by adding data management or analytic capabilities that enhance the value of contact center activities. The universe of features thus expands to include tools that don’t focus on the interactions directly, but that add either value to the interactions or help a business understand the ramifications of policies and procedures related to customers. The goal is to help direct customers towards defined outcomes. That’s the path laid out by enterprise CX and Customer Experience Management (CXM)—they take contact center tools and put them into a larger business context to aid marketers and sales teams. It's clear to me that CX software itself (with contact center at the heart) is really the center of an even bigger circle, comprised of tools that hook into those planning and orchestration elements, but that fill a more specific operational need. Field service is a good example: it’s not offered by every contact center or CX provider because it’s not needed in every customer context. It is a specialty, but one that mirrors many of the aspects of traditional service in form and technology, so we can consider it part of the CX toolkit. Which brings us to the key question: what else are we overlooking? More specifically, what else should software providers be considering as expansions (or line-extensions?) to their solution portfolios? There are gaps in the industry’s conception of the CX solution suite that could be filled with niche software acquisitions, partnerships or development, but that are historically left out of the mix. Field service isn’t left out so much as it is chosen or omitted on purpose by providers making strategic decisions about their customer bases. (A similar dynamic is at work with industry-specific versions of tools.) If I were designing a CX solution from scratch, I would include two other areas that are somewhat overlooked. One is customer success tools. This is still an area filled with a mix of niche software and professional services. CX and contact center systems only very rarely directly cover the space in the customer relationship between purchase and service. Can this process be automated and made more efficient? Absolutely, especially with an eye to boosting a customer’s likelihood to expand product usage and ensuring satisfaction. Another area is the agent pre-hire pipeline. Contact centers have long ceded responsibility to the HCM industry to ensure continuous labor flow. They take responsibility for the agent once training and incubation are in place, so most agent management tools haven’t been built to do pre-hire assessment and manage large-scale recruitment. Could this gap be profitable and differentiable for CX and contact center providers? Possibly. If we are now embarking on an industry-wide project to automate just about every process related to customers (which we are), then it makes sense to look for gaps at the operational level that can be filled with niche software or perhaps an AI-based application. The evolution of CX tools so far indicates that providers will eagerly expand their capabilities when three criteria are in play: The additional functions dovetail directly with existing capabilities, as in adding analytics to performance management or using AI to carve out new ways to do existing tasks (e.g., agent assistance). The additions can be made quickly, at relatively low cost and risk, often via partnerships or acquisitions of small niche firms. And the addition allows the software firm to differentiate from some significant subset of the larger CX marketplace. For example, contact center as a service (CCaaS) providers adding CDP or martech firms adding certain agent performance functions (often related to sales efforts, like proactive outbound communications). The faster technology advances, the harder it is for software providers to create differentiation for their solutions. Finding and filling even small gaps like these creates space and time to innovate in core areas. So it’s fair to expect that over the next few years, CX providers will take simultaneous paths that seem contradictory, but are really complementary: beefing up the capabilities of the core interaction handling and measurement while seeking out undeveloped niches in the customer lifecycle where software can improve productivity and unify customer-related activities handled by different enterprise teams. Customer success and pre-hire assessment are two possibilities, and of course there are many others to be explored. By 2028, software for managing customer experiences will focus on automating cross-departmental processes that touch customers. CX buyers should think of this as an opportunity to simplify complex processes under a unified provider’s solution set. When considering how to expand or replace their contact center or CXM systems, they should look at a wider array of providers from across the expanded CX marketplace. And they should press those providers to include more creative applications that don’t leave key CX-adjacent functions isolated as silos. For their part, software providers should be looking left and right at their adjacent markets, and at the niche software that their customers already use, for opportunities to bring smaller software niches into their suites. Not every opportunity will clearly look like a traditional contact center application. But the days when building out contact centers was the easy route to growth are gone and are never coming back. Regards, Keith Dawson

Keith Dawson's Analyst Perspectives

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