Global spending on customer experience technologies is continuing to rise. According to the inaugural Customer Experience Spending Guide from IDC, the value of CX technologies will reach $508 billion by the end of 2019, an increase of 2.9% from 2018. What's more, as businesses continue to concentrate on meeting the rising expectations of today's customers, IDC believes that CX spending will reach a CAGR of 8.2% over the period up to 2022. This means that the industry will be worth $641 billion by 2022.
IDC refers to CX as a functional strategy that actively encompasses business processes, services, technologies and strategies to deliver better experiences to customers, and differentiate companies from their competitors. According to the research manager of Customer Insights and Analysis, Craig Simpson, customer experience is now the key differentiator for businesses around the world. New technologies like data analytics and AI are at the forefront of the drive for differentiation as businesses struggle to upgrade their customer experience initiatives.
What's Driving the Demand for CX Solutions?
IDC's report found that CX spending will be distributed across around 16 different use cases, however, the use case that will see the most spending this year is likely to be customer care and support, followed by interaction management and order fulfilment. According to Mike Davies, the VP of Business Partners at Quadient,
“Businesses are increasingly being punished for poor customer experience"
On one hand, regulators are putting more pressure on companies. Recently, Ofgem banned two providers from taking on additional clients after they delivered ineffective experiences to their existing customers. GDPR fines also have the potential to raise serious concerns among brands, with penalties being handed out already to companies that don't handle data correctly.
At the same time, customers are turning their backs on the companies that fail to meet their expectations, Davies notes that it's "easier than ever for them to do so thanks to regulators’ efforts to make switching easier across industries such as banking and utilities."
As companies continue to strive for better all-around experiences to give their customers, new investment opportunities are appearing in the form of disruptive technology. IDC believe that the use cases that will see the fastest spending growth up to 2022 will include interaction management, ubiquitous commerce, and AI-driven engagement.