Customer Engagement Solutions Market Revenue Analysis by Component (Solutions, Services), Deployment Type (Cloud, On-Premises), Industry (Retail, Manufacturing, BFSI, IT & Telecom, Healthcare), Enterprise Size (Small & Medium, Large) – Size, Share, and Growth Forecast to 2030

Market Overview

The global customer engagement solutions market size was $18,186.8 million in 2021, and it will grow at a CAGR of 10.1% during 2021–2030, reaching $43,398.9 million in 2030. The growth of the market is attributed to the rising usage of these solutions in various industries, such as FMCG, BFSI, healthcare, and telecommunications. Moreover, with the advancements in the internet technology, the cloud is increasingly being leveraged to host these solutions.

In North America, the U.S. uses these solutions on a massive scale owing to the rising adoption of big data for insights into customer behavior and preference, to ultimately address their concerns quickly and accurately.

Rising Need for More-Accurate Customer Support Driving North American Market

The North America customer engagement solutions market growth is projected to be the fastest, with a CAGR of 10.5%, during the forecast period. The leading software vendors in the continent offer a range of customer engagement solutions for companies to timely address the concerns of end customers. These solutions offer metrics and actionable insights, which help in improving the overall experience of customers, which, in turn, increases brand loyalty and decreases the churn rate.

For instance, in June 2020, Walgreens Boots Alliance Inc. announced an expansion of its strategic partnership with Microsoft and Adobe to launch a customer insights platform, to deliver personalized healthcare and general retail offerings. This personalization platform facilitates an individually tailored prescription experience for patients at Walgreens. Moreover, Boots will launch an enhanced beauty experience for customers by enabling its beauty consultants to provide custom product recommendations.

Moreover, North America is a hub for the healthcare, IT & telecom, and energy and utility sectors due to the increasing use of emerging technologies, such as machine learning and industrial automation, itself due to the major shift of businesses toward digital transformation.

Companies in these industries have huge customer bases, and these digital trends are influencing the adoption of customer engagement solutions. For instance, ServiceNow has launched the Now Platform, which facilitates the scale-up of automation and app development processes across enterprises. It facilitates digital platforms for seamless customer and employee interaction enabling workflow solutions efficiently.

The U.S will have the higher CAGR in the region during the forecast period. Leading players have planned investments to expand out of their home countries and set up operations overseas, to acquire international customers. For instance, in December 2021, U.S. company ChurnZero set up an office in Amsterdam to cater to its existing international clients throughout Europe via a one-stop solution for customer engagement.

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Solutions Sales Are Principal Revenue Contributor for Players

The strong need for customer satisfaction and retention is the prime element that contributed to the solutions category’s 66.2% customer engagement solutions market share in 2021.

Customers are shifting from physical stores to shopping online on web browsers and mobile phones. For retailers, the placement and promotion of their products are not limited to the physical stores but they are also now listed on e-commerce websites all over the world. As a result, success management ensures that customers' needs are met and that the company's offerings are at par with those of their competitors, thus allowing them to stay one step ahead from others in the market.

Online channels such as Amazon, Myntra, and Flipkart have become an indispensable part of people’s shopping experience around the globe. As per analysis, in 2020, over 2 billion people purchased goods or services online, owing to, in part, the better customer engagement solutions that e-commerce firms now possess.

Cloud Solution Demand Expected To Grow Faster

The cloud-based deployment type category holds a significant customer engagement solutions market share. This is due to the growing smartphone and internet usage and accessibility of product and service information across various channels, such as company websites, social media sites, and mobile apps. As per the Internet World Stats, there are around 5.0 billion internet users globally in 2022.

Moreover, small businesses are keen to deploy innovative solutions that combine real-time self-service analytics with cloud-based solutions, to improve their growth potential in the quickest time feasible, while spending the least amount of money.

This is because these solutions provide highly scalable tools with easy data storage and access, which is why they will witness a demand CAGR of 10.4% during the forecast period. The adoption of cloud-based solutions speeds up automation and improves the accuracy of client success predictions. This is because a number of critical tasks, including data collection, reporting, and optimization, can be handled better, thus giving customer success managers (CSMs) more information for effective decision making.

The IT & telecom sector is the most-significant user of cloud solutions, as they help in storing, managing, and processing data. Moreover, cloud computing generated around $400 billion revenue in 2021, due to massive investments in it by the IT & telecom sector.

In addition, the cloud space is undergoing numerous advancements in order to automate and scale up processes. For instance, in December 2021, Wolken Software launched a cloud-native, self-serve SaaS customer service platform, which facilitates businesses in transforming the customer service experience. The solution is designed for small and medium-sized businesses in varied sectors, including BFSI, semiconductor & electronics, manufacturing, IT & telecom, and FMCG.

Further, owing to the cost constraints, not every company, especially SMEs, can afford on-premises solutions. In the on-premises environment, the corporation hosts all its IT infrastructure, including the servers, racks, and software, in-house, but in a cloud environment, a third-party provider hosts everything for users.

However, on-premises solutions are considered more immune to security threats, which are a key concern for customers’ personal information, such as login credentials, as well as to intellectual property, all of which can be breached if stored on the cloud. Hence, on-premises solutions are adopted in organizations where sensitive data needs to be stored safely, where the public cloud-based software isn’t as trustworthy. Therefore, large multinational corporations and even government organizations, which are usually well-funded, prefer to have their IT infrastructure deployed on premises.

IT & Telecom Sector To Grow at Highest CAGR

As per the analysis, the IT & telecom sector is the major user in the customer engagement solutions market, and it is projected to have the highest CAGR, of 10.5%, over this decade. Since the major mode of operation for IT & telecom companies, especially in regard to connecting with customers, is the internet, they widely use advanced software to engage better with them.

Further, various larger enterprises have CSM teams, which help customers achieve their goals by utilizing API analytics platforms, which capture data on customers’ engagement on websites and motivate them to renew their subscriptions and upgrade contracts. In times of economic downturns, these systems can assist CSM personnel in identifying customers’ concerns and their attrition.

In order to manage sales more effectively, CSM systems are frequently utilized to integrate customer and client data. An increasing number of Chinese business owners are looking for CSM systems that support various business models, capture customer demand, and, most importantly, help companies grow amidst the emergence of social media and the spread of internet connectivity. The CSM market in China is centered on the east coast, and it will continue to mature as the nation's economy grows.

For instance, in order to reinvent the traditional customer engagement models, in March 2022, Intercom added new products to its Engagement OS, which enables businesses to capture data from customers and resolves issues on a real-time basis.

The retail category will be the second-fastest-growing during the forecast period, as this sector uses API connectivity to develop customer experiences. APIs have surfaced as an emerging tool to extract enterprise data, allowing businesses to generate new revenue streams and make better decisions on other aspects.

Moreover, players are investing in new technologies to grow their sales volume and customer success rates. For instance, Stefanini Group uses IoT and AI to enhance the digital shopping experience with better services, customization, and frictionless payments. To provide an enhanced consumer experience, members of its digital team combine analytics and advanced UX. Additionally, the business can identify areas for development by analyzing user behavior throughout the client journey.

To Increase Market Share, Companies Involved in Various Strategic Developments

Major players in the customer engagement solutions market have been involved in the introduction of products, collaborations, and mergers and acquisitions. For instance:

• In September 2021, Tata Tele Business Services (TTBS) launched a customer experience platform for its products, enabling a digital experience for enterprise customers and partners.
• In January 2021, Informatica announced its Customer 360 SaaS solution, which provides connectivity, data integration, process orchestration, reference data management, and master data management functionalities in a single solution.

Top Providers in Customer Engagement Solutions Market Are:

• Microsoft Corporation
• Oracle Corporation
• SAP Group
• Salesforce, Inc.
• Nice Ltd.
• ServiceNow Inc.
• ChurnZero Inc.
• Pegasystems Inc.
• Open Text Corporation

Market Size Breakdown by Segment

The study offers comprehensive market segmentation analysis along with market estimation for the period 2017-2030.

Based on Component

• Solutions
• Services

Based on Deployment Type

• Cloud
• On-Premises

Based on Industry

• Retail
• Manufacturing
• BFSI
• IT & Telecom
• Healthcare

Based on Enterprise Size

• Small & Medium
• Large

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • France
  • U.K.
  • Italy
  • Spain
• Asia-Pacific (APAC)
  • China
  • Japan
  • Australia
  • South Korea
  • India
• Latin America (LATAM)
  • Brazil
  • Mexico
• Middle East and Africa (MEA)
  • Saudi Arabia
  • South Africa