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The customer experience technology market has evolved with a flurry of recent high profile acquisitions
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The changing CX tech marketplace - what does it all mean?

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Customer experience experts give their views on what the recent flurry of acquisitions in the CX tech market means for practitioners. 

3rd Aug 2021
Editor MyCustomer
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The customer experience technology market is evolving at pace – principally in Voice of the Customer (VoC), which has been transformed in recent times by a series of heavyweight, strategic acquisitions and mergers.  

Just last week, investment firm Thoma Bravo announced the acquisition of Voice of the Customer and Employee (VoE) specialist, Medallia for around $6.5bn.

Following in quick pursuit was the announcement that Qualtrics would be acquiring Clarabridge. Qualtrics itself was acquired by SAP in 2019 for a seismic £8bn, whilst other major, multimillion dollar acquisitions of companies in the VoC market include Confirmit in 2020, Rant and Rave in 2018 coupled with the 2020 merger of InMoment and MaritzCX.

But beyond VoC (or EFM – Enterprise Feedback Management – as it’s also coined), across the entire spectrum of the customer experience vendor landscape, numerous eye-catching acquisitions appear to be highlighting that the CX market is in a phase of rapid evolution – from Kitewheel being purchased by CSG to Qualtrics, again, very recently announcing the acquisition of Usermind.   

What does it all mean?

Speaking with fellow CX experts Paul Greenberg and Brent Leary on a recent CRM Playaz LinkedIn Live event, Ed Thompson, distinguished analyst for Gartner, suggested that the customer experience vendor market was in a period of consolidation having become vast and difficult to define.  

Gartner recently surveyed CX leaders to find out what tech they were focused on most and they received over 100 different types in response.

“What we’ve seen is that you can use any technologies to improve the CX at your company. What we [at Gartner] get asked all the time is, how big is the CX market? And my answer is always, how big do you want it to be? I made a list of vendors that are calling themselves CX vendors and I got to about 800 and then had to stop. It’s personalisation, it’s CRM, it’s analytics tools, it’s content management, it’s customer journey, it’s Voice of the Customer and survey tools. It’s lots of different tech.

“Interestingly, CEOs are increasingly saying they care about customers and they are appointing more and more CX leaders and they’re largely putting money into that area, especially in digital transformation. With a third of all digital transformation projects, the primary goal is customer experience improvement.”  

Your job as a CX leader is to lean in and take advantage of the upward momentum

According to Heart of the Customer’s chief technology officer, Shawn Phillips, two acquisitions in particular – Kitewheel and Usermind – are as clear a display of where CX is heading as any others, and that customer experience leaders must take note.

“Leaders in the CX space are spending money consolidating disconnected CX technologies into enterprise experience platforms. Your job as a CX leader is to lean in and take advantage of the upward momentum, and spread the reach of what CX is all about in your company.

“Qualtrics has been saying for the last several years that they are an experience platform and not a survey platform. They just invested in that in a significant way with the purchase of Usermind, a leading journey orchestration platform. This sends a message that anyone serious about CX needs to go beyond surveys and start meeting customers where they are in their journey…and help them succeed.”   

Indeed, numerous big brands including Adobe and SAP have pivoted their offerings in recent years to promote themselves as ‘experience platforms’ and ensure they can offer an end-to-end CX solution to their customers. The all-encompassing ‘platform’ is fundamental to many of the acquisitions being made across the CX vendor landscape, as Forrester’s VP analyst Harley Manning recently explained:  

“This is a hot market. Big organisations including Cisco (Cisco WebEx XM), Salesforce (Salesforce Feedback Management), and Microsoft (Microsoft Dynamics 365 Customer Voice) have recently entered the market or upped their game with more serious offerings than they’ve had in the past.”

Fellow Forrester analyst Judy Weader also added that, as a vendor in the space, “If you have a differentiated offering, now is the time to double down. That could be channel expertise (such as with SMG and physical locations) or social listening (like Reputation) or cost-effectiveness (such as Khoros/Topbox). If you are one of the other big VoC / EFM platforms, now would be a good time to build (or, more likely, acquire) your own superior analytics capabilities.”

However, Dave Fish, CEO at CuriosityCX and the author of The Customer Experience Field Guide: A Practical Manual for Getting Things Done believes the market is actually beginning to “wind down”, despite the very recent flurry of acquisitions, and was more sceptical of the VoC market’s long-term appeal to prospective investors.

“I think it part of the natural fragmentation > aggregation > fragmentation flow of any maturing industry. Also many of these software companies are trying to cash in while the can.  Finally, there is a sort of a exuberance around these software companies for investors; many of whom have no idea what they are investing in.”

Mergers and acquisitions in the Voice of the Customer vendor market 2011 - 2021
Source: Curiosity CX

“It’s serious stuff”

There’s no denying that the Voice of the Customer market has evolved, even if it is showing signs of a wind down or consolidation.

As Thompson explains, many VoC offerings are moving at light speed towards an entirely new form of customer feedback. Speaking about Medallia and Qualtrics specifically, he said:  

“Everyone thinks they’re survey tools but they’re actually doing a lot more. They’re sucking in a lot of social media data, for instance. They’re collecting a lot of indirect data and call logs and text analytics stuff. They’re also pulling in location data and transactional point-of-sale data too. So it’s behavioural data they’re focused on and they’re predicting what NPS [someone] is going to give without even giving it.

“If you talk to the world’s biggest supermarket chain, they have 2m employees and 285,000 users of their VoC tool. It’s not 5 guys in a box doing some analysis, this is operational execution. If you’re a store manager in Arkansas, you’re getting a daily report telling your guys on the bread aisle to brush the crumbs up because yesterday wasn’t good enough. You’re getting the [customer] feedback and taking action really quickly. It’s pretty serious stuff that’s going on in that market right now.”

And as Heart of the Customer’s Jim Tincher adds, this may well push users of VoC tools towards making a major choice.

“Soon, CX will divide into one of two groups: those chasing insights versus those focused on action. My interpretation of Qualtrics' moves is that the CX of tomorrow will have a broad toolbox that goes far beyond surveys, incorporating a full 360-degree analysis of customers, not just survey scores but text and voice analytics paired with journey analytics to give you a truer picture of customers' sentiment and their journey.

“Beyond that, the Usermind capability allows CX leaders to do something about that customerjourney. Usermind enables CX to change that journey in real-time based on that in-depth analysis.

“If you're not familiar with Clarabridge's and Usermind, I recommend taking the time to look into them and process their implications about the future of CX. If you're chasing insights, you may soon be chasing a new job.”

 

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