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2023 Customer Experience Trends and a Look Ahead

2023 Customer Experience Trends and a Look Ahead

Introduction

At year end 2022, I wrote about EX and CX during turbulent times and the importance of maintaining customer trust during an economic downturn. Many of those insights still hold true. However, missing from those insights was acknowledgement of the scale of change that was heading towards CX, particularly when it comes to AI.

The year 2023 was certainly busy in the CX segment and yes, splashy AI-related solutions and features exploded across all CX technology segments. But that does not tell the entire story. Although AI is now serving to augment and enable a lot of CX activities, it has yet to reveal its full powers. AI is still in its beginning stages and we have seen the most success in supporting basic and pragmatic (yet very important) actions. That statement should not be taken as a negative. AI has, for the most part, been used thoughtfully and carefully in the CX segment and 2023 will serve as a great foundation for further use case expansion in 2024.

In this review of 2023, I am going to highlight some AI and (gasp!) not AI-related trends of note, as well as some examples of companies that made some interesting announcements, as well as offer thoughts about 2024.

AI Layered in Across all Customer Experience Segments

The Futurum Group considers CX to encompass a broad range of technologies including customer relationship management (CRM), customer data & analytics, customer data platforms, customer insights and feedback, contact center, and employee experience. The past year saw AI layered across all these segments. I will dive into just a few of these areas in this piece, with more EX-related insights forthcoming in a future post.

  • Contact Center: Out of all the segments, contact center was perhaps the hottest area this past year; it is where those practical use cases of AI as well as automation did shine. Top contact center use cases that saw some great traction in 2023 included:
    • Post-call summarization
    • Next best action
    • The use of sentiment analysis
    • Use of bots
    • Knowledge base improvements and automation
    • Real-time coaching
    • Making workforce engagement management more efficient and EX-supporting

There were many notable AI-related announcements and innovations in this space from the leaders that you would expect, including Genesys, Verint, NICE, Cisco Webex, Amazon Connect, Zendesk, and Five9. There were also interesting advancements from companies such as 8×8, Mitel, RingCentral, Zoom, Content Guru, and GoTo and I expect to see more from this second grouping as their contact center offerings deepen.

What has also been interesting and good to see in the contact center space is the increased focus on agent experience, which has also been supported by AI tools.

  • Customer Insights and Feedback: A hearty 2023 shout out goes to the many CX management providers who are using AI to wrangle and harness feedback information. AI is being used, as in the contact center use case mentioned above, to summarize information, find the important trends, and get to the critical action piece faster. The use of AI has also allowed companies to expand the type of data collected, with information from qualitative responses or even from video being more readily analyzed and acted upon.

Both Qualtrics and Medallia announced some impressive investments and metrics. InMoment deepened its AI offerings and QuestionPro acquired PathosAI, which will help the company leverage intent and sentiment in its CX offering.

  • Customer Data + Personalization: This one really flows across and powers multiple CX categories. Customers still want personalization ― in my opinion, not any more in 2023 than they did in 2022, but what customers did want is smoother, easier, and more relevant recommendations and interactions. Was 2023 the year that AI helped break down all data silos to create a supreme CX? Unfortunately, not, but progress was made last year in using AI to tie together information to move customers towards the type of experience they are craving which is reliant on creating single sources of data or “truth.”

The likely candidates, such as Salesforce and Adobe, of course made many AI-related announcements that will support more personalized customer interactions, as did SugarCRM.

2023 also saw Twilio double down on its AI efforts, fueling personalization efforts with data, and Microsoft combining Dynamics 365 Marketing with Dynamic 365 Customer Insights into one offering.

Smoothing Out Omnichannel and Self-Service

This past year saw good progress in the general smoothing out of omnichannel interactions and self-service. Companies have, of course, been going at this for years, but I do feel like in 2023 there was just a bit more focus on the bridge points between channel jumping and removing those friction points where customers might go from say, messaging on a website with a bot, to an agent, to a phone call. There was also a more robust approach towards supporting self-service.

Partnerships, Acquisitions, and Integrations Help Vendors Bridge CX Gaps

This could be an entire report on its own. The year saw CX companies be very thoughtful and strategic about potentially fleshing out gaps in their CX offerings or augmenting services they already have.

This tracks with just the smallest movement towards realizing that the “experience” ecosystem really should not be so disconnected. We will see more of this in 2024—the bringing together of best-of-breed approaches to create solutions that will make the experience better for both customers and employees.

Some notable examples from 2023 include the Genesys and Salesforce partnership that tied together CCaaS and CRM; Zoom’s acquisition of WorkVivo, which brings together Contact Center and Employee Experience; Five9 acquiring Aceyus, which unites contact center, data, and analytics; and the deepened Alvaria−Avaya partnership.

What’s Next in 2024

  1. Accelerated movement towards proactive rather than reactive customer experience. This trend is going to be boosted, of course, by the use of AI for more predictive analytics and signaling of trends. This will be the case across all the CX segments, with likely more progress in contact center and customer insights and feedback areas.
  2. Small expansion beyond the pragmatic AI use cases. I do think 2024 will be a year of seeing which use cases for AI really are bright and shiny and which ones, in retrospect, did not hold up quite as well. Still, those who have already seen the benefit of AI will move toward adopting some more advanced capabilities.
  3. Deepened personalization driven by data. As mentioned, the dreaded silos did not disappear in 2023, nor do I think they will be eradicated in 2024, but capabilities are certainly moving at pace. I expect personalization to become less basic and more sophisticated. This is going to be even more important in 2024 to help create more compelling customer interactions and experiences. Consumers might tighten spending and will need a compelling reason to keep a relationship based on experience, rather than on a price point.
  4. More investigation of verticalization. CX is not the same across the board. In 2023, we saw some vertical specific offerings, particularly in the contact center and customer insights and feedback segments and I expect to see more of that in 2024 particularly in healthcare, finance, and retail.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

Other Insights from The Futurum Group:

The Enterprise Application Market Outlook for 2024

Year in Review: Assessing the Developments in SaaS, CX, and Collaboration in 2023 – Enterprising Insights, Episode 7

Top AI Trends for 2024 | The AI Moment, Episode 7

Author Information

As a detail-oriented researcher, Sherril is expert at discovering, gathering and compiling industry and market data to create clear, actionable market and competitive intelligence. With deep experience in market analysis and segmentation she is a consummate collaborator with strong communication skills adept at supporting and forming relationships with cross-functional teams in all levels of organizations.

She brings more than 20 years of experience in technology research and marketing; prior to her current role, she was a Research Analyst at Omdia, authoring market and ecosystem reports on Artificial Intelligence, Robotics, and User Interface technologies. Sherril was previously Manager of Market Research at Intrado Life and Safety, providing competitive analysis and intelligence, business development support, and analyst relations.

Sherril holds a Master of Business Administration in Marketing from University of Colorado, Boulder and a Bachelor of Arts in Psychology from Rutgers University.

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