Customer Experience Management Market

Market Overview

The global customer experience management market size was valued at USD 9.63 billion in 2022 and is projected to reach USD 37.19 billion by 2031, with a CAGR of 16.2 % during the forecast period 2023–2031.

Customer experience management (CEM) is constructing and responding to consumer interactions to fulfill their expectations. Organizations use evolving practices and technologies to transform continuously to meet and exceed consumer expectations. Business organizations have recognized the significance of customer experience management, as it enables them to strengthen their brand presence, increase consumer loyalty, decrease consumer churn, and ultimately increase business revenue.

In addition, increasing customer loyalty and advocacy requires a process change and an array of technologies. Customer experience management services have aided in decreasing at-risk revenues and regaining lost customers. The solution enables business owners to engage with their customers as a sustainable development element. CEM further reduces the cost of acquiring new customers. It includes customer-to-customer interactions, website visits, and customer experiences with product installation instructions, product performance, and the quality of service from all parties, including in-house and dealer-supplied services. Customer experience management is concerned with the customer's interactions with a company's employees, products, services, and advertising. Furthermore, it is a company-wide effort to personalize the customer experience by incorporating customer feedback to enhance the delivery of rapid, high-quality service via the most effective tools and channels.

Market Dynamics

What are the Factors Driving The Global Customer Experience Management Market?

The customer experience plays a significant role in retaining customers and fostering brand loyalty. Not only does satisfied customer visit the website or store multiple times, but they also provide positive feedback about the brand. This would encourage additional customers to engage with the brand and retain and acquire additional customers. According to Harvard Business Review, a five percent increase in customer retention can boost profits by 25% to 95%.

Customers' preference for digital channels has increased, With the evolution of e-commerce and digital banking. The shift of retailers from physical stores to digital channels. In 2020, according to Statista, more than 2 billion people purchased goods and services online, and global e-retail sales surpassed $4.5 trillion. Retailers have adopted Al-enabled virtual trial rooms, chatbots, and surveillance systems to capture and analyze customer behavior. Brands increase their visibility through multiple channels, including social media, mobile applications, and websites.

Increased social media channels, such as Instagram, YouTube, Facebook, Twitter, and Pinterest, have increased brand awareness, marketing, and direct sales. Numerous brands are adopting social media shops to simplify the purchasing process for customers. For example, Facebook and Instagram shops facilitate acquiring new customers and direct purchases from social media platforms. Consumer experience solutions assist retailers in decreasing customer churn, maximizing customer lifetime value, and retaining customers. Such alterations in consumer purchasing patterns fuel the expansion of the customer experience management market.

Digitalization has accelerated the adoption of e-health applications, telemedicine, smart health equipment, and wearable devices throughout the healthcare industry. As a result of the digitalization of healthcare, customer expectations, such as 24-hour service and instantaneous responses, are evolving. Thus, businesses are implementing various strategies to enhance the customer experience.

What are the Restraints for The Global Customer Experience Management Market?

The expanding use of digital platforms has raised data security and privacy concerns. The impact of rising cybercrimes and data theft on the customer experience is substantial. The government enacted new rules in response to an increase in data breaches and data protection. These government regulations enable data security and protection. For instance, the General Data Protection Regulation that the European Union introduced in May 2018 provides data protection regulations and monitors the behavior of individuals within the European Union. Similarly, in January 2020, the federal government will implement the California Consumer Privacy Act to give customers access to and control their personal data.

Other government regulations, such as the  Health Insurance Portability, Payment Card Industry Data Security Standard (PCI) and Accountability Act (HIPAA), Sarbanes-Oxley (SOX), Gramm-Leach-Bliley Act (GBLA), and Family Educational Rights and Privacy Act of 1974 (FERPA), also provide data protection regulations to secure sensitive customer information. While leveraging customer data, customer experience solution providers must address regulatory compliance requirements. These government regulations will likely inhibit market expansion.

What are the Future Opportunities for The Global Customer Experience Management Market?

Organizations view CEM solutions as one of the most important tools for identifying customer requirements and anticipating their intentions. The analytics component of the solution enables marketers to identify customers at risk of abandoning and diverting from a product. The marketer could devise retention strategies and offer customers incentives like discount coupons or product upgrades.

The rapid spread of the pandemic has significantly impacted the global economy and stunted the expansion of several industries and markets. Nonetheless, the rapid digitization witnessed during the pandemic has increased demand for digital payment applications such as Amazon Pay and Google Pay. The decreased physical consumer interaction made possible by these applications has fueled the expansion of effective customer experience solutions. The pandemic has created dynamic consumer purchasing patterns. As a result, key players are developing innovative solutions to meet the fluctuating demand of consumers. In the post-pandemic era, the market is projected to experience tremendous growth opportunities due to these trends.

Regional Analysis

The global customer experience management market has been segmented based on geography into North America, Europe, Asia Pacific, and LAMEA.

In 2021, North America had the largest revenue share at over 40%. Various industries, including telecom, retail, and banking, are increasingly adopting CEM solutions and services to strengthen customer relationships. U.S. and Canadian businesses are investing more in digital channels and marketing, contributing to the growth. The growing preference of consumers to post reviews and share experiences via digital media is compelling businesses and brands to undergo a digital transformation and adopt customer experience management solutions. This causes businesses to invest aggressively in digital channels.

Due to the increasing adoption of modern technologies, Asia-Pacific is anticipated to experience rapid growth over the forecast period. Increasing E-commerce adoption has created unprecedented market opportunities for consumers and companies. China will likely drive market expansion in the region. To target and reach consumers, e-commerce companies have adopted a unified data platform because of seamless Internet connectivity, the proliferation of mobile devices, and the rising demand for digital payments.

In addition, the increasing adoption of IoT-based sensors and devices and AI-driven advanced analytics tools by B2C and B2B consumers. Contributing to the expansion are the prevalence of call centers, the rise of social media, and the emphasis on customer experience management and customer satisfaction. As part of their efforts to drive their regional and global businesses, SMEs in countries such as India are significantly emphasizing implementing CEM solutions.

Expanding digitalization and adopting big data and data analytics in Europe will increase investments in digital platforms. Advertisers and marketers have adopted digital platforms due to the government's increasing emphasis on customer data privacy. To capitalize on these trends, market leaders are developing innovative CEM solutions. For instance, in April 2021, Dentsu and Merkle Company launched a sophisticated platform in North Europe.

During the forecast period, it is expected that the Middle East and Africa market for this product will expand at a CAGR. According to the 2019 report on mobile internet connectivity by GSMA Intelligence, mobile social media penetration in the Middle East and Africa was 44% in 2018. This penetration rate indicates that the region's mobile internet adoption and social media users continue to grow. This factor is anticipated to generate lucrative market opportunities for the dominant players.

Segmental Analysis

The global customer experience management market is categorized by analytical tools, touchpoints, and end users.

Analytical Tools segment the market into enterprise feedback management (EFM) software, speech analytics, text analytics, web analytics & content management, and other analytical tools. It is anticipated that demand for text analytics will remain high throughout the forecast period. The increasing generation of text-based data in the form of feedback, comments, and reviews across various digital platforms and offline survey systems is one of the key contributors to segment expansion. Text analytics tools assist organizations in comprehending unstructured text-based data and gaining valuable insights from social media comments and product reviews.

In addition, they enable businesses to provide real-time responses and reduce manual labor. Numerous organizations use text analytical tools for text classification and in-depth analysis of unstructured customer data due to these advantages. In the contact center industry, speech analytics software is gaining popularity as it provides conversational analytics to organize and identify words and key phrases spoken during calls into themes. In addition, the tools are useful for enhancing agent performance, monitoring compliance, and enhancing first-call resolution in contact centers.

The market is segmented on touchpoint into stores/branches, web services, call centers, mobile, social media platforms, email, and others. Mobile touchpoints are projected to have the highest CAGR over the forecast period. The segment's growth is attributable to the increasing use of smartphones, prompting businesses to develop mobile marketing and communication strategies. In addition, mobile customer experience management enables mobile carriers to develop long-term consumer relationships via customer-initiated requests.

Mass, email and personalized marketing enable enterprises to acquire existing customers and increase brand awareness. Recently, there has been a steep increase in consumer demand for prompt response and individualized attention to their problems. To meet this demand, the contact center is under intense pressure to provide services of the highest quality. Companies are increasingly leveraging the power of contact center analytics to provide exceptional and notable customer experience management.

The market is divided into retail, BFSI, healthcare, it & telecom, manufacturing, government, energy & utilities, and others, based on the end user of the products. During the time frame of the forecast, the BFSI segment is anticipated to have the highest CAGR. More and more people are using smartphones to do banking transactions. This has led to more personalized interactions, which makes mobile banking easier for consumers. This new trend has made it more possible and difficult for management to create a good customer experience. In 2021, the market was led by the retail sector.

The key factor in the segment's growth is the increasing shift to an omnichannel model to provide the right customer service and support at every point of contact. Also, the growing competition over prices and the lack of differences between products in the retail sector have pushed retailers to develop effective management strategies to gain an edge in the market. Retailers can also use customer experience management solutions because they are spending more on marketing to give customers personalized content and services.

Recent Developments

• In September 2021, Tech Mahindra acquired Activus Connect Customer Experience Management Services and Solutions Company in response to the rising popularity of working from home. This acquisition enables Tech Mahindra to provide remote businesses with advanced CEM services.
• In September 2021, IBM's Watson introduced Al-based Intelligent Watson Assistance with automation features that help businesses transform their customer service. IBM's Watson Assistant is designed to assist businesses in integrating IntelePeer's voice agent for a seamless customer experience. Utilizing cutting-edge analytic tools, it addresses customer issues related to the rising call volume.
• In July 2021, Southeast Asia Commercial Joint Stock Bank (SeABank) transformed its operations with Oracle Financial Services Performance and Balance Sheet Management Suite products.
• In March 2021, Adobe partnered with government agencies in all fifty states of the United States to facilitate their digital modernization using Adobe Experience Cloud and Adobe Document Cloud.
• In November 2020, SAP acquired Emarsys to integrate and add Emarsys products to the SAP customer experience portfolio.
• In October 2020, SAP SE launched a customer data platform. This new platform will enable businesses to create customized customer profiles. In addition, this platform will improve its customer experience (CX) software and its role in the development of intelligent businesses.