CX / Customer Experience Archives

Forecasting the Future: Key Trends Reshaping CXM Outsourcing in 2024 | Blog

April 11, 2024

After a turbulent past year, 2024 holds great promise for CXM outsourcing, with generative AI and other technologies poised to transform contact center operations. Discover five key trends that will impact the CXM industry going forward by reading on, or get in touch.

Amid the tumultuous landscape of 2022-23, the Customer Experience Management (CXM) outsourcing industry faced a barrage of challenges. Economic uncertainties, unfavorable exchange rates, and mounting financial pressures compelled many enterprises to tighten their belts, leading to reduced spending on CXM services. In the face of these adversities, the industry weathered a turbulent period, seeking resilience in the storm.

2024 has ushered in an exciting new chapter of transformation. Several technological advancements are poised to catalyze growth and reshape contact center operations. Generative AI (gen AI) holds the potential to redefine customer service offerings, automate more interactions, enhance agent performance, and provide superior customer experiences.

Advancements in accent neutralization and AI translators are expected to enhance service quality, boost workforce efficiency, and alleviate language barriers. The current surge in investments targeting various delivery geographies aims to unlock untapped talent pools. This trend is accompanied by a pressing need for agent reskilling to match the pace of evolving technologies.

Enterprises are reevaluating vendor management strategies, prioritizing providers with robust capabilities and talent, and focusing on embracing sustainability. This transformative shift is reshaping the CXM landscape and heralding a future defined by resilience and adaptability.

In this rapidly evolving environment, innovation isn’t just an option, but a prerequisite for enterprises and providers to prosper, making 2024 a pivotal year for the CXM industry.

Let’s deep dive into five key trends expected to reshape the CXM industry in the near future:

Gen AI pilots to move to production: 2024 marks a pivotal moment in implementing gen AI pilots, heralding a transformative era in CX delivery. Gen AI is not merely a technological upgrade. It is a catalyst poised to elevate efficiency, redefine agent assistance capabilities, revolutionize voice bots, introduce cutting-edge self-service tools, and fundamentally reshape the overall service delivery landscape. Enterprises are proactively gearing up for the widespread deployment of gen AI across established use cases, strategically positioning themselves to harness its potential within the next two years.

Accent neutralization and AI translation to redefine CX: Beyond the scope of gen AI, innovative technologies like accent-neutralization and AI translation are poised to revolutionize customer interactions. Accent-neutralization facilitates more transparent communication and promotes inclusivity, while AI translation bridges linguistic divides, enabling global interaction. Together, these advancements promise to enrich customer engagement, surpassing conventional limitations. They equip businesses to navigate language challenges, streamline processes, and cut costs significantly. These technologies simplify the complexities of multilingual support, boosting customer satisfaction and loyalty. Ultimately, they empower businesses to provide seamless, effective, and inclusive service worldwide.

Evolving shoring dynamics: We anticipate a significant increase in offshoring and nearshoring activities continuing this year. This surge is propelled by factors such as escalating onshore talent costs, rapid technological advancements, and an increasing need for geographical diversification in response to the growing complexities of the business landscape. Emerging delivery locations in Africa (Ghana, Rwanda, Kenya, Senegal, Burkina Faso, and Morocco), Latin America (Suriname, Argentina, Nicaragua, Uruguay, and Caribbean countries), and Asia Pacific (Malaysia, Taiwan, Sri Lanka, and Indonesia) present compelling options for enterprises aiming to diversify their delivery capabilities and fortify their Business Continuity Planning (BCP) strategies.

Strategic portfolio management: Enterprises will continue refining service provider portfolios through consolidation, rebalancing, or integrating new suppliers. This strategic portfolio management approach will be characterized by its sophistication, considering cost, risk, capabilities, and productivity factors. The overarching objective will be to achieve an optimal balance that enhances operational efficiency and positions enterprises to swiftly adapt to evolving market dynamics and shifting customer expectations. By strategically managing their portfolios, enterprises aim to gain a competitive edge by aligning their service provider relationships with their broader business objectives. This proactive approach will enable them to optimize resource allocation, mitigate risks, and capitalize on emerging opportunities.

Embracing sustainability Initiatives: Sustainability initiatives are poised to play a pivotal role for enterprises and service providers. Enterprises will prioritize partnering with providers actively involved in such initiatives, aligning seamlessly with their organizational goals. By collaborating with these providers, businesses will demonstrate a commitment to ethical and socially responsible practices, contributing to the broader objectives of responsible and sustainable outsourcing.

Impact on the CXM Outsourcing Landscape

The CXM outsourcing landscape stands on the cusp of a transformative era, poised for a revolution fueled by the advent of technology and various strategies. These innovations promise remarkable productivity gains by automating more tasks and elevating customer and agent experience.

These trends signal a gradual departure from human-centric interventions to digitally-led customer experiences. As the industry moves towards a future shaped by AI and sustainability, customer service is expected to increase as a true differentiator between enterprises. The ability to personalize interactions, resolve issues quickly, and demonstrate empathy is expected to be key to success.

To gain more insights into the dynamic CXM outsourcing landscape, evolving customer requirements, and the significant impact of emerging technologies, explore our in-depth report, Strategic Keys: Unlocking the Potential of Customer Experience Management. For questions about the CXM outsourcing industry, contact [email protected] and [email protected]. You can also catch up on the latest insights with our webinar on demand, The Generative AI Advantage in Enterprise CXM Operations.

Call Center Technology Needs a Platform Approach | Blog

February 8, 2024

It feels like the more technology a company deploys in its call center, the more it results in the worst customer experience possible. What used to be a personal conversation with a specific person is now a proliferation of technology channels that create more complexity for the customer and the company. Whether companies recognize it or not, in making these investments, they have assembled a digital platform operations model where the technology and the people in call center operations have become more intertwined. The problem is they did not adopt platform thinking.

The Generative AI Revolution: Transforming Customer Experience Management | Blog

January 22, 2024

Generative Artificial Intelligence (AI) is poised to revolutionize customer experience management (CXM) by creating personalized, empathetic, and more fulfilling experiences that drive brand loyalty and business growth. In this blog, explore examples of early generative AI adoption and learn about the benefits and challenges of this game-changing technology.

Learn more on this topic in the webinar, The Generative AI Advantage in Enterprise CXM Operations.

As contact centers shift their main focus from improving efficiency to creating impactful customer experience, generative AI is leading the charge in this new direction. Recognizing generative AI’s promise to enable the personalized, hyper-contextual interactions customers desire, enterprises are looking to invest and deploy solutions to leverage its transformative potential.

A recent Everest Group survey revealed nearly 60% of enterprises believe generative AI solutions have huge potential to disrupt the current contact center landscape. Additionally, another 37% perceive these solutions as beneficial in some areas.

Transforming the CXM landscape

By mimicking human creativity, generative AI can create nuanced and contextually relevant content. This opens a wide range of possibilities to reshape the way brands engage with customers across various touchpoints and provide the following benefits:

Enhanced customer service

Conversational AI: Supports intelligent virtual assistants for natural, contextual interactions, fostering deeper connections and loyalty
Personalization support: Analyzes vast customer data, tailoring experiences and providing real-time product support for heightened experience

Contextual marketing

Swift content creation: Crafts personalized content and product descriptions quickly, reducing production time and boosting conversions
Engaging storytelling: Creates compelling brand stories and personalized campaigns that resonate with specific audiences

Building stronger relationships

Personalized recommendations: Recommends products based on individual preferences, fostering trust and repeat business
Proactive engagement: Personalizes messages, contributing to lasting customer relationships

Enterprise generative AI adoption

With vast potential applications, enterprises across vertical markets are already reaping the rewards of early-generation AI adoption. Let’s explore some pioneering examples:

Virtual experience: A leading global furniture brand has built a generative AI chatbot to guide customers through the customization process, making furniture shopping more intuitive and natural while also offering 3D product configuration
Content enhancement: Prime Video has introduced Defensive Alerts, a generative AI feature that tracks the movements of defensive football players before the snap, reads their acceleration, and identifies “players of interest” likely to rush the quarterback. A red circle appears under the potential blitzer, giving fans a heads up, allowing them to place themselves in the coach’s seat and read developing plays
Customer support: Dave, a digital banking service, is implementing AI-powered chatbots that can hold natural conversations with customers, answer complex questions, and even resolve certain issues without human intervention
Content generation:com is testing its AI Trip Planner, which utilizes generative AI to create personalized offers and travel itineraries based on customer preferences and provide direct booking options to deliver an integrated travel planning experience
Itinerary planning and customization: Expedia has integrated ChatGPT into its app to help users make and save travel plans. Customers can ask the AI for recommendations on destinations, accommodations, and transportation as if it were a human travel agent. The app can also save locations so users can easily check availability and book travel
Student coaching: Language-learning platform Duolingo uses the technology underpinning ChatGPT-4 to help users practice language skills and understand when they make a mistake. It also uses the technology to allow learners to practice real-world conversation skills with the roleplay feature in the app
Dynamic promotion, pricing, and loyalty program: Levi Strauss & Co. has implemented generative AI to increase diversity on its website and expand its loyalty program by offering personalized benefits. This has significantly increased loyalty enrollments to 5 million members worldwide and boosted revenues and app registrations. Generative AI allows for tailored product recommendations, localized discounts, and customized store experiences based on consumer data and mobility insights. AI-driven analytics help optimize stock for various sales events, including mid-season, end-of-season, and Black Friday sales in the U.S. and Europe
Agent assist: Advisors at a multinational IT company that provides subscription-based technology support services worldwide access a secure generative AI-based model to easily answer customer queries

Addressing the challenges

While generative AI’s potential benefits are intriguing, addressing the inherent challenges that come with its implementation is critical. Enterprises have expressed a wide range of issues, from regulatory to accuracy, that could arise with generative AI. The top three enterprise concerns to generative AI adoption are:

Data security and privacy: Robust security measures and transparent data usage policies are necessary to utilize customer data. The risk of data leakages during model training or deployment further intensifies the threat to data privacy. The implementation of generative AI exposes vulnerabilities to cyber threats and presents issues related to the secure handling of sensitive information for training the model
Compliance issues: Enterprises are concerned about copyrights and ownership of intellectual property (IP) produced by generative AI while ensuring the solution doesn’t violate other organizations’ IP. With the diverse generative AI applications, sector-specific regulations are crucial. The technology’s evolving nature also calls for dedicated regulations addressing unique challenges and ethical considerations
Accuracy: Organizations are wary of the risk of biased output stemming from training data biases, the potential for unethical responses requiring human oversight, and instances of “hallucinations” – all underscoring the pressing need to refine and enhance model accuracy

Future of CXM with generative AI

The changing landscape of generative AI in CXM is a testament to the transformative power of technology. The generative AI revolution is here, and it’s poised to significantly alter the way brands interact with their customers. By responsibly and strategically embracing this technology, CXM service providers can create personalized, empathetic, and, ultimately, more rewarding customer experiences, leading to stronger brand loyalty and increased business growth.

To discuss generative AI adoption trends in CXM, please contact Chhandak Biswas, [email protected] and Rishav Kumar [email protected].

Discover how enterprises are looking at generative AI-based solutions adoption to improve CX in the webinar, The Generative AI Advantage in Enterprise CXM Operations.

Elevating Customer Experience through Data-driven Excellence | Blog

December 15, 2023

The combination of Artificial Intelligence (AI) and data and analytics (D&A) can deliver superior, efficient, and personalized customer experience (CX). This synergic union of digital technologies can help enterprises maintain customer loyalty, provide a competitive edge, and improve top and bottom growth. Learn more about how AI and D&A can work together to deliver exceptional CX in this blog.

Reach out to us to discuss AI and D&A in customer experience further.

In today’s digital era, AI and D&A play a vital role in enhancing customer experience (CX) in businesses. Data forms the basis of CX strategies, providing valuable insights into customer behavior. Analytical tools extract insights and meaning from this data, identifying patterns and trends to make informed decisions, ultimately boosting customer satisfaction. AI takes CX a step further with instant support from chatbots, personalized recommendations, and task automation.

Let’s next explore the current market conditions, compelling results from our research on organizations that have recently embarked on CX transformation initiatives, and eight key reasons enterprises report investing in these digital solutions.

Market challenges

The macroeconomic landscape was fraught with substantial challenges in 2023, including recessionary pressures, an energy crisis, inflation, labor market disruptions, geopolitical tensions, and trade barriers.

According to Everest Group’s recent report, Unleashing the Power of Data and Artificial Intelligence in Customer Experience Management (CXM), more than 60% of the surveyed companies grappled with changing customer demand, pricing pressures, rising costs, and heightened risk exposures like cybersecurity and data privacy.

In response, enterprises focused on enhancing customer experience through digital solutions for customer acquisition as well as retaining and optimizing customer journeys by resolving friction points. Notably, 94% of surveyed enterprises identified D&A as a crucial lever for CX objectives. About 91% were in the advanced stages of deploying these D&A solutions for CX operations, conveying the maturity of D&A solutions within this market.

Enterprises continue to invest in these digital solutions to realize the following key benefits:

Gain actionable insights for enhanced customer experience by leveraging advanced analytics in data management, reporting, and customer analytics
Improve employee productivity, enhance agent experiences, and reduce attrition by adopting agent-assist solutions, including AI-powered knowledge bases and call summarization
Optimize costs and achieve higher efficiency in business processes by automating transactional tasks and maximizing value from existing intelligent automation investments
Cater to the flexible remote work solution demand by partnering with cloud-based providers, offering Contact Center as a Service (CCaaS), Unified Communications as a Service (UCaaS), and Cloud Platform as a Service (CPaaS) integration
Explore the potential of generative AI and Large Language Models (LLMs) in transforming conversational AI by focusing on hyper-personalization and platform-based approaches while considering data privacy and accuracy concerns
Integrate CX consulting by adding services like journey mapping and process optimization
Address emerging customer preferences, including self-service portals and multimodal, immersive experiences across voice, video, and chat channels during a single interaction by making targeted investments in omnichannel platforms

Developing trends

D&A and AI solutions play a vital role in digital CX transformation by offering valuable business and operational insights into customer interactions and agent performance throughout the customer journey and associated touchpoints. These insights, in turn, help optimize self-service tools and conversational and generative AI-based solutions, enhancing the overall CX.

In the current CX landscape, enterprises are divided in their investment approaches to D&A and AI capabilities. About half of the respondents are proceeding cautiously with CX D&A and AI initiatives, focusing on small-scale projects to minimize risk and ensure targeted outcomes. Conversely, 40% of organizations are displaying a strong inclination for aggressive investment in these solutions, aiming to secure a competitive edge by harnessing deeper insights into customers, market trends, and internal operations.

Among the exhaustive list of D&A and AI tools, workforce optimization, customer analytics, and Voice of the Customer Analytics (VoCA) solutions are garnering substantial investments. In fact, over 83% of the respondents are deploying, expanding, or maintaining the implementation of these solutions.

The exhibit below shows surveyed enterprises’ investment trends in D&A tools.

While enterprises are implementing CX D&A and AI solutions, many have not fully embraced next-generation analytics that involve advanced technologies to extract deep customer insights. These potential growth areas include predictive analytics that foresees trends, prescriptive analytics that proactively suggests next-best actions, and cognitive analytics that emulate human thought processes by applying AI, Machine Learning (ML), and Natural Language Processing (NLP) to unstructured data.

Impact of CX D&A and AI initiatives on enterprises

CX D&A and AI strategies have demonstrated the potential to significantly impact business outcomes by helping organizations realize significant cost savings, increase top-line revenues, and reduce agent capacity.

More than half of the enterprises responding to the survey reported they had already realized a return on investment (ROI) of 10% or above by leveraging these initiatives to increase revenues and drive efficiency improvements.

Furthermore, 52% of the surveyed enterprises have realized total cost savings of at least US$1 million, while 44% have seen top-line revenue growth of over US$1 million, and 30% reduced their required agent capacity by more than 100 full-time equivalents (FTEs.)

Enterprises that adeptly employ fundamental AI practices can generate extensive value while concurrently addressing risks and fostering AI-ready workforces. Despite achieving expectations in some areas, untapped opportunities still exist in many enterprises for D&A and AI initiatives. Concentrating on high-impact use cases is certain to guide CX strategies, ultimately leading to quantifiable business value.

The following exhibit highlights the percentage of enterprises and the average ROI they have attained in their business objectives through D&A and AI initiatives.

Obstacles to realizing benefits from D&A and AI

The rapid digital transformation accelerated by the COVID-19 crisis exposed a shortage of digital expertise due to misaligned talent strategies among many enterprises. This scarcity of suitable skills presents a significant obstacle for organizations to effectively implement CX analytics and AI.

Identifying and acquiring the necessary digital skills, along with essential soft skills that encompass technology competencies across various functions, proves to be challenging for enterprises. This is where outsourced CX service providers are pitching in and increasingly creating value for the enterprises.

Beyond skills gaps, additional barriers exist, such as outdated technology, data security concerns, integration challenges, talent-related issues, poor data quality, resistance to cultural change, and other roadblocks stemming from the rapidly evolving technological landscape and misaligned risk tolerance levels. These factors collectively impact organizations’ abilities to realize their CX D&A and AI vision.

At the foundational level, while enterprises are keen on addressing data encryption and masking, compliance, validation, and auditing aspects, they have to significantly ramp up their investments in addressing AI biases, AI governance and explainability, data profiling, and data stewardship to achieve robust results from D&A and AI strategies.

Securing executive support, fostering leadership capabilities to act on insights, nurturing workforce capabilities, and ensuring the availability of suitable technology and tools are deemed essential for successfully implementing CX D&A and AI strategies.

While using CX D&A and AI has noticeably progressed, the potential for more comprehensive adoption of advanced analytics, such as predictive and prescriptive models, remains untapped.

Enterprises are seeking increased support from third-party providers, particularly in areas such as consulting on implementation strategy, partnering on shaping digital CX operations, leading digital strategy execution, and providing ongoing technology support.

In today’s evolving climate, where organizations recognize the vital role of CX as a market and brand differentiator, enterprises must swiftly develop and sustain a robust D&A and AI strategy to supercharge their CX operations.

Read Everest Group’s Unleashing the Power of Data and Artificial Intelligence in Customer Experience Management (CXM) to gain a deeper view of how D&A and AI solutions contribute to deliver exceptional CX. If you have questions or would like to discuss digital CX strategies and solutions, reach out to Anubhav Das, [email protected], or Joshua Victor, [email protected].

Learn about our CX Excellence Membership for new insights and our latest research into the market.

Exploring South Africa’s CX Services Potential: Your Gateway to Exceptional Customer Experiences

September 14, 2023

South Africa has emerged as a stand-out destination for customer experience (CX) services. Offering a talented workforce, cost-effectiveness, and infrastructure, the nation is attracting the attention of both providers and customers alike. Now is the time to capitalize on this alluring market in this rising continent. Discover seven advantages of South Africa and compare its hotspot cities in this blog.

With the rapid global transformation and dynamic shifts in commerce shaped by cutting-edge strategies, one continent is emerging as a rising giant in the realm of customer CX services delivery – Africa.

According to Everest Group’s recent report Africa on the Rise – The Next Frontier in Customer Experience Management, the continent’s customer experience management (CXM) delivery presence has surged. Boasting a full-time equivalent (FTE) workforce strength of 200,000-250,000 offering CX services to clients in and out of the continent, Africa has captured interest from global enterprises in the United Kingdom, the United States, and Western Europe.

Get insights on the CXM industry in Europe in our webinar, Navigating the European CXM Outsourcing Market: Trends and Insights.

As enterprises look to mitigate concentration risks by diversifying their contact center presence and further tap advantages such as cost arbitrage, diverse talent, and rapid technological advancements, businesses find Africa increasingly attractive for CX delivery. At the same time, the country’s focus on integrating environmental, social, and governance (ESG), and diversity, equity, inclusion, and belonging (DEIB) elements further enhance its appeal to companies today.

Amidst Africa’s overall growth,South Africa in particular has captured the interest of CX providers and enterprises as a paragon for lucrative CX delivery. As the stage is set for South Africa’s continued ascent, let’s unravel the reasons behind South Africa’s emergence.

The emergence of South Africa

South Africa is developing as a globally attractive location for CX service delivery, drawing attention for numerous compelling factors that include:

Cost-effectiveness: South Africa presents a promising advantage in cost-effectiveness for contact center services, offering competitive pricing in comparison to traditional nearshore destinations in Eastern Europe, and Latin America. The country enjoys relatively lower labor costs while ensuring high-quality service standards, making it an enticing proposition for companies seeking to optimize customer support operations without compromising on service excellence
Skilled and multilingual workforce: With a large pool of young and educated talent, South Africa’s workforce possesses good aptitude and has a solid working knowledge of technology. With a variety of languages spoken, including English, French, Spanish, and native African languages, South Africa offers a significant advantage for businesses with global customer bases by fulfilling diverse language requirements

Time zone compatibility: The country falls within a favorable time overlap with major markets like Europe and the United States, enabling seamless communication and smoother real-time collaboration between businesses in South Africa and their counterparts in these key markets
Infrastructure: South Africa boasts well-equipped built and digital infrastructure, facilitating seamless interactions for traditional and hybrid contact centers. With robust telecommunications and widespread internet connectivity, businesses can efficiently run contact center operations
Impact sourcing focus: South Africa offers companies a chance to meet impact sourcing goals while remaining cost-effective. With a skilled and diverse population, as well as a young workforce, the country provides an opportunity for impactful sourcing that supports local economic development
Regulatory support: The South African government actively supports outsourcing by offering incentives to companies, stimulating development through foreign investment and job creation. Governing bodies like the Department of Trade, Industry, and Competition (DTIC), Business Process Enabling South Africa (BPESA), and CapeBPO provide resources and reward job creation
Cultural Affinity: South Africans’ familiarity with US and UK culture and shared holiday celebrations create cultural similarity with global markets for CX delivery. This affinity facilitates efficient CX service delivery by enabling a better understanding of customer preferences, language, and lifestyle, fostering smoother interactions and stronger connections

CX providers in South Africa

While numerous global service providers thrive in the CX services landscape in South Africa, regionally-based service providers also have built a noteworthy industry reputation, leveraging different locations to extend their services both within and beyond the African continent. These service providers offer complete customer lifecycle management, business applications, marketing, and lead generation, with customer engagement specialists and Artificial Intelligence (AI)-driven solutions for enhanced customer engagement.

Examining the major hot spots for CX services delivery within South Africa

In South Africa’s remarkable rise in the CX outsourcing industry, three dynamic cities – Cape Town, Johannesburg, and Durban – stand out as hotspots for CX services delivery.

Below, we explore some of the elements that place these cities at the heart of the driving force behind South Africa’s growth and prominence in this industry:

City	Attributes of the city
Cape Town	Cape Town’s compelling 60-70% cost advantage over major UK tier-2 cities and its favorable business environment with a reliable infrastructure, advanced technology, and a skilled workforce make it an attractive choice for cost-conscious companies. English is the primary language utilized for BPO services in Cape Town, although there is also a significant Afrikaans-speaking population. Cape Town showcases a remarkable collaborative spirit between the local government and operators, driving strategic projects that lay the groundwork for future growth and success in the region’s CX services delivery landscape. With a focus on key verticals like retail, telecom, utilities, and travel and hospitality, the city hosts specialized skills academies to support these industries, ensuring a skilled and talented workforce that contributes to its competitive advantage.
Durban	Durban stands out as a cost-effective contact center destination, offering up to 70% lower operational costs than tier-2 cities in high-cost countries. Its skilled and diverse workforce, supported by reputable universities, makes it an appealing choice for outsourcing, accounting for 13% of South Africa’s contact center jobs. English is the primary language for BPO services in Durban, with significant a Zulu-speaking population. Recent infrastructure development, reliable telecommunications, modern office spaces, and high English proficiency further enhance Durban’s appeal for seamless CX services delivery.
Johannesburg	As South Africa’s largest city, Johannesburg presents a substantial English-speaking talent pool, making it an advantageous hub for contact center outsourcing with its diverse and skilled workforce. In addition to the Afrikaans-speaking population, talent proficient in Spanish, Portuguese, German, Dutch, and French languages are readily available. Accounting for 40% of the country’s contact center jobs, as per BPESA, Johannesburg ensures abundant resources for efficient outsourcing operations. The city’s modern infrastructure, including reliable telecommunications and robust IT systems, guarantees seamless contact center operations.

The road ahead for South Africa

As South Africa establishes itself as a sought-after location for CX services delivery, the country is poised to attract more global enterprises expanding their service delivery footprint. With its skilled workforce, cost-effectiveness, and cultural affinity, this vibrant nation offers fertile ground for driving business success and forging lasting partnerships. To stay ahead in this dynamic environment, organizations need to quickly seize the moment and explore the untapped potential of South Africa’s burgeoning CX services delivery sector.

Read Everest Group’s report Africa on the Rise – The Next Frontier in Customer Experience Management to learn more about the African CXM landscape. If you have questions or would like to discuss South Africa’s evolution, please reach out to Chhandak Biswas, [email protected], or Joshua Victor, [email protected].

Teleperformance Proposes to Acquire Majorel: Global Titans Continue Their Unstoppable Run in the Customer Experience Management Industry | Blog

April 28, 2023

Teleperformance, a global leader in the Customer Experience Management (CXM) industry, has announced its proposal to acquire Majorel, another large rival in the industry. This move is set to reinforce Teleperformance’s position as a dominant force in the market and expand its reach even further. With both companies known for their excellence in CXM services, this acquisition has the potential to deliver an even greater level of innovation to clients worldwide. Read on for more details on the impact of this deal on the CXM industry.

While there is increasing appreciation for the strategic impact to businesses of delivering great customer experiences, a large part of the market is still managing Customer Experience (CX) as it has always done, which is to drive down costs and focus on operational efficiencies. Consequently, Customer Experience Management (CXM) provider margins tend to be lower than in other Business Process Services (BPS) segments, and it is not surprising that in the current uncertain economic environment, providers are focusing on tried and tested strategies such as consolidation to deliver on growth objectives.

Teleperformance further augments its leadership position by scale

The latest in the wave of mergers and acquisitions (M&A) in the CXM industry is the largest CXM services provider, Teleperformance, announcing its intention to acquire Majorel, another sizable competitor, for a total consideration of €3bn. Subject to regulatory approvals, the combined entity will result in revenues of more than €10.2bn and EBITDA of more than €2.2bn if it closes as expected between Q4 2023 and Q1 2024, resulting in Teleperformance achieving its 2025 revenue goal of €10bn two years in advance. The merged entity will be the largest CXM provider both in terms of revenues and FTEs, with nearly half a million employees worldwide.

With Concentrix’s recent announcement to acquire Webhelp, these two CXM behemoths will be more than twice the size of their next largest competitor, Foundever, which itself resulted from a merger of two significant entities (SYKES and Sitel Group). Given their global reach and ability to cater to almost all regions and languages, they will naturally be in consideration by any global buyer of these services that is looking to consolidate its provider portfolio and work with fewer but more strategic partners.

What this means for the CXM and BPS industry

As we have mentioned in our recent blog, we are seeing the rise of global Titans in the CXM industry. While this might mean less choice in service providers or strategic transformation partners for global buyers, it will also lead to cost synergies, operational efficiencies, and enhanced digital capabilities. Adding more scale allows these providers to make more concerted investments in a space which is already seeing the entry of Big Tech and hyperscalers such as Microsoft and Google into CX technology. A greater focus on innovation by these Titans will result in better products, solutions, and services in the industry.

The global outsourced CX market is a highly fragmented one, with the 10 largest providers holding a total of ~30% share of the $100 billion+ market and hundreds if not thousands of other providers making up the remaining 70%. In addition, our estimates put penetration of this market between 30-35%, indicating significant room for growth in the future. Therefore, smaller providers can continue to thrive if they are successfully able to articulate and deliver upon differentiated value propositions such as offering superior products and services, aligning more attentively to their clients’ needs, or specializing in niche areas, whether that is in a particular industry, region, buyer size, or service line.

Within the broader BPS environment, the combined entity of Teleperformance and Majorel will have a stronger Trust and Safety (T&S) portfolio and will become one of the top three T&S providers (with Accenture and TELUS International) in terms of revenues. This, along with deep digital CX expertise, Teleperformance’s recruitment process outsourcing and finance & accounting services, and Majorel’s vertical BPO solutions in banking, insurance, and retail industries, make the new entity a force to be reckoned with in the BPS world, becoming one of the top three providers by revenues in BPS. However, it will continue to remain a CXM specialist primarily as more than 80% of its revenues will be CXM-oriented, at least for now. It will be interesting to see if the combined entity will accelerate the growth of its non-CXM revenues to become known as a broader-based BPS provider in the future.

What to expect going forward

Recent economic headwinds have provided an excellent opportunity for M&A in this market as valuations are once again becoming attractive for a lot of providers. With an enormous push towards digital CX capabilities, service providers are looking aggressively to plug capability gaps, and firms that can help them achieve these objectives are becoming hot acquisition targets. We expect further M&A activity in the next 12-18 months, both big (scale-focused) and small (capability-focused).

However, it will be a mistake for providers to allow M&A and, subsequently, integration activity to distract them from focusing on how generative AI such as ChatGPT can be applied in the contact center environment. This disruptive technology is already showing great promise and has the potential to level the playing field between big and small providers if leveraged responsibly. Despite believing strongly that there will always be a need for human interaction and involvement within CXM, the contact center of today should be quite different from the contact center of the near future, as early as two years from now.

To discuss global customer experience management topics, contact Shirley Hung [email protected], Sharang Sharma [email protected], or Aishwarya Barjatya [email protected].

You can access our CXM research coverage and also attend our LinkedIn Live session, Delivering CXM Services From Africa: Who, Where, Why, And How to learn why Africa has become an ideal option for global customer experience management.

Concentrix Acquires Webhelp: A Game Changer in the Global Customer Experience Management (CXM) Landscape | Blog

April 6, 2023

The combination of Concentrix and Webhelp will create a global customer experience management (CXM) titan that can significantly shape the industry’s future. Let’s explore the benefits and other implications of this mega deal.

The recent announcement of Concentrix’s planned acquisition of Webhelp in a US$4.8 billion deal is a major milestone in the growing trend of mergers and acquisitions in the CXM industry over recent years.

With an estimated pro forma 2023 annual revenue of US$9.8 billion across multiple businesses, including CXM, trust and safety, and legal services, the combined entity will emerge as a global service powerhouse with the potential to significantly shape the CXM industry.

Key drivers of the acquisition

The strategic benefits of this acquisition include:

Stronger operational presence beyond North America: Webhelp has a strong presence in sales, marketing, and payment services across Europe, Latin America, and Africa. With this acquisition, Concentrix will be able to strengthen its operations beyond North America in these geographies. Concentrix is further set to bolster its extensive operations in the Asia-Pacific region by leveraging Webhelp’s existing operational presence and partnerships with regional CXM providers in China and Japan through joint ventures with Kingwisoft and Telenet, respectively. This will result in the combined entity having a diversified revenue contribution across the Americas, Europe, and Asia Pacific

Enhanced delivery capabilities in Europe, Latin America, and Africa: Webhelp adds more than 25 new countries to Concentrix delivery locations, including Denmark, Greece, Estonia, Finland, Norway, Madagascar, Peru, and South Africa, thus, strengthening Concentrix’s delivery presence in Europe and Latin America, as well as helping it establish an African footprint. This collaboration will establish a robust and well-balanced global footprint, which can attract global enterprises looking to partner with service providers who can offer the right shoring mix to their end customers across geographies

Varied customers: Webhelp’s customer base is primarily situated outside of North America leading to limited client overlap with Concentrix. With this acquisition, Concentrix is set to gain around 1,000 new clients from Webhelp, consisting of over 25 Fortune Global 500 clients, and more than 200 clients from emerging economies. This will significantly increase the combined entity’s client base to approximately 2,000 clients, of which 155 are Fortune Global 500 clients and 320 are from the new economy sector. By expanding and diversifying its client base, Concentrix can increase revenues, broaden service offerings, and gain economies of scale, while its clients also will benefit from access to a wider range of resources and expertise

Operational synergies: Combining Concentrix and Webhelp will enable the sharing and cross-selling of digital capabilities, including Concentrix’s Catalyst platform and ServiceSource’s expertise in the fast growth-technology (FGT) segment, as well as Webhelp’s Lead Factory and consulting firm Gobeyond Partners. This will allow the combined entity to offer clients high-value services, addressing their needs more comprehensively and efficiently. Moreover, the partnership is expected to broaden the global reach of Concentrix Catalyst and accelerate its expansion by leveraging Webhelp’s engineering know-how in Europe and Latin America. Sharing resources also can lead to operational efficiencies, enabling the merged entity to enhance profitability and market competitiveness. Expected cost synergy benefits will be US$75 million in the first year after the closing of the transaction and will reach a minimum of US$120 million (after accounting for investments) by the third year

Expansion of other service lines: Concentrix can expand its trust and safety service lines by utilizing Webhelp’s delivery footprint and in-house solutions, such as Contentus.AI for more efficient moderation, Navigatus for enhancing work quality, and Moderatus for detecting and removing false news and hate speech. In addition, Concentrix can leverage Webhelp’s expertise in legal services, including legal claims management and Know Your Customer (KYC) services, to further expand its Business Process Services (BPS) portfolio

Key considerations

Integration challenges: Varying technology systems and processes, as well as the difficulty of integrating and managing data, can potentially hinder the Webhelp and Concentrix union. Bringing the respective customer service models and training programs into alignment also can pose challenges. Furthermore, integrating human resources and payroll systems, benefits, and compensation programs can be complex and will require careful planning and execution. However, contrary to other recent CXM acquisitions, we do not foresee a significant culture clash challenge between Concentrix and Webhelp

The emergence of a new category of global CXM Titans: In recent years, the CXM market has witnessed a significant trend towards consolidation, with several high-profile mergers such as Sitel Group’s merger with SYKES to form what is now known as Foundever and Comdata Group’s merger with Grupo Konecta. The upcoming collaboration between Concentrix and Webhelp is poised to contribute to this consolidation trend, with the combined entity expected to control a considerable market share of roughly 6-8%. Similar to the super-major formation era of the late 1990s and early 2000s in the oil and gas industry, Concentrix, Foundever, and Teleperformance are poised to form a new category of global CXM Titans that have the potential to dominate the market due to their extensive resources, expertise, and global reach. Their emergence validates the growing appetite for comprehensive CXM solutions and the need for providers who can meet these demands on a large scale

Competition and opportunities for other providers and specialized players: The consolidation of these two forces may create challenges for other CXM players who might struggle to compete with the resources and scale of the merged entity. However, this also could create opportunities for providers to thrive with tailored offerings targeted at specific customer service areas or industry sectors, such as IGT Solutions and ResultsCX with their focused offerings for travel and healthcare, respectively

The announcement of Concentrix’s acquisition of Webhelp has generated a significant buzz in the CXM industry. Certainly, we expect this pending acquisition to fuel more CXM market consolidation, which may potentially limit buyers’ choices for transformation-oriented strategic partnerships.

Despite these concerns, the Concentrix and Webhelp combination creates a formidable CXM force that will likely shape the industry’s trajectory for years to come. Monitoring the impact of this collaboration on the CXM landscape as well as watching other market players respond to the ongoing consolidation trend will be fascinating. Who will be the next global CXM titan to join their ranks?

To discuss global customer experience management topics, contact Shirley Hung [email protected], Sharang Sharma [email protected], or Divya Baweja, [email protected].

And watch our LinkedIn Live event, Delivering CXM Services from Africa: Who, Where, Why, and How, to learn why Africa has become an ideal option for global customer experience management.

Reinventing the P&C Insurance Claims Value-Chain: Moving to the Claims of the Future Vision | Blog

April 4, 2023

Heightened momentum for technology-first and automated operations is elevating customers’ need for greater convenience, instant gratification, faster turnaround time, and more self-service options. Today’s digitally-immersed consumers have grown accustomed to doing business anywhere, at any time, and with any device, and this is shaping up the new normal of the insurance industry; transforming the insurance claims journey becomes a pivotal priority for Property and Casualty (P&C) carriers to meet demands for a customer-centric hyper-personalized experience driven by digital technologies. Read on to learn more about the zero-touch claims of the future vision and how to achieve it.

Leading InsurTechs with pure-play digital models are heating up the competitive landscape, making it imperative for traditional insurers to optimize their claims functions. An insurer can achieve future goals by accelerating the adoption of next-generation capabilities.

Amid the digital shake-up and rising demand for delivering an “Amazon-like” experience, insurance operations are plagued with workflow complexities caused by multiple intermediaries and legacy systems. Digital and emerging technology solutions can help insurers reshape the customer claims journey and improve turnaround time while reducing information leakages and fraud and delivering a superior customer experience.

Foundational pillars of a digital-claims future

To embark on a transformational claims journey, insurers need to go beyond traditional after-the-fact claims management, tap into the plethora of available data to unlock immense value, and focus on offering omnichannel experiences powered by intuitive digital technologies. P&C carriers will need to excel at the 3Es: experience, efficiency, and effectiveness.

Winning P&C digital claims offer a compelling digital experience and strengthen customer loyalty. Insurers can differentiate themselves by supporting each touchpoint in the claims journey – starting even before an incident occurs – with data, artificial intelligence (AI), analytics, and other emerging technologies—all while retaining the human touch.

By offering seamless omnichannel customer experiences across claims registration, disputes, timely process updates, final settlements, insurers can improve customer satisfaction and retention rates. This is crucial given that Everest Group’s research shows ~35% of P&C insurers’ priorities across claims management are focused on enhancing customer experience (based on an analysis of 60+ case studies involving claims modernization/transformation).

Insurers also need to drive superior efficiency by enabling data-driven and analytics-driven claims processing. This ensures focus on effective service delivery to reduce claims expenses, while improving claims handling accuracy and ensuring greater customer satisfaction.

Bridging the gap between current and future digital claims-processing

With innovation growing throughout the P&C insurance industry value chain, AI/Machine Learning (ML)-enabled tools eventually will help insurers redefine their roles from claim handlers to claims preventers. P&C carriers flourish when they embrace this mindset shift from a risk transfer to a risk mitigation model.

Insurers can unlock value in the claims industry by employing the internet of things (IoT) and telematics capabilities combined with the connected devices ecosystem and third-party data to identify red flags and alert customers of risks before any loss occurs.

Insurers need to look beyond mere cost-savings, accurately utilize the wealth of data they possess, and transform claims from a necessary back-office function into a source of competitive advantage and market differentiation. Below is a look at the key steps to reach a seamless claims settlement:

Exhibit 1:

Future Enables Carriers — Source: Everest Group

Rigid legacy systems for claims processing can present challenges for insurers and prohibit them from adapting to the evolving customer requirements and optimizing their operations. Legacy IT processes slow progress and innovation, eventually affecting the end-user experience that holds the potential to make or break insurers’ reputations. Taking a one-size-fits-all solution approach for different business lines, failing to adopt modular design principles, and having limited advanced systems skills add to the overall complexity and further weaken the ability of insurers to thrive in today’s competitive environment.

To attain a competitive edge, insurers require instant resolutions and digital experiences on the go. Leading insurers are harnessing the power of unified and custom low-code/no-code platforms with advanced AI and analytics tools to streamline claims processes, modernize systems, and build modern layers on top of existing legacy systems or other core platforms without involving time-intensive and expensive upgrades. This allows insurers to build reusable codes and design “plug and play” environments to deliver enterprise-grade solutions at speed and scale. Low code makes it easy for carriers to simultaneously focus on profitability, enhance customer experience, and fulfill the vision of balancing quick wins with strategic initiatives.

The need for digitalization of workflows and customer interfaces, convenient user journeys, reusability of components and faster configurations, cost optimization, and skill management are the top drivers fueling the demand for low-code/no-code technology for insurers in modernizing the claims process.

For instance, a leading global insurer used a low-code platform to create an intuitive and dynamic first notice of loss (FNOL) prototype application in just 90 minutes and transformed it into a fully functional mobile application for 2,000-plus users in four weeks, delighting customers.

Where do the opportunities lie?

A combination of agile insurance claims process/operating model transformation, adoption of advanced technologies and telematics, a skilled workforce with technical and domain expertise, and a connected partner ecosystem are the fundamental facilitators for the probable future of zero-touch claims.

In the future of claims processing, P&C insurers will be able to facilitate touchless claims decisions, accelerate payment settlements, assess indemnity obligations accurately, prevent fraud, and mitigate claims litigation losses.

Exhibit 2:

Industry Frontrunners — Source: Everest Group

Below are the key elements needed to move from the current state to claims of the future:

Acting quickly and flexibly: The rapidly changing environment is compelling insurers to keep up with the pace. Incumbents need to act fast, develop and launch new products, accelerate FNOL processing, and streamline claims management quickly to stay relevant. The need for agility is greater than ever. Adopting the latest technologies and processes will propel P&C carriers to move faster and separate leaders from laggards
Adopting advanced analytics and AI: Real-time sensor and IoT data coupled with AI and ML-backed algorithms will enable insurers to process claims efficiently and manage fraud without any human intervention. For instance, leading insurers are using an AI model embedded within the claims workflow to assign a complexity score to each claim based on multiple parameters and process all low-risk claims under a certain threshold. Low-complexity claims are routed for straight-through processing while high-complexity claims are sent to the right team depending on the claims adjuster’s specialization and availability, thus ensuring speed and accuracy
Transforming talent management strategy: Modernizing the claims journey requires relying on advanced technologies and a skilled workforce to manage emerging risks. Insurers need to enhance their long-term value proposition to attract skilled workers with technical and domain expertise
Partnering with digital claims solution providers: Building partnerships with solution providers can support carriers in extracting maximum value by utilizing the provider’s end-to-end digital claims solutions portfolio. Advanced capabilities across core functions include claims notification, adjudication, and settlement to fulfill P&C carriers’ needs across the claims value chain

To achieve the zero-touch claims of the future vision and keep up with leading competitors, insurers will need to invest in advanced technologies and drive value creation by taking a more proactive and customer-centric approach.

Successful insurers who can deliver a hyper-personalized experience will generate superior efficiency and leverage data and ecosystem insights to proactively detect fraud. Above all, this transformation improves the claims ratio by building predictive and preventive capabilities. Insurers who take these steps will emerge as industry frontrunners.

To discuss transforming digital claims, please reach out to [email protected], [email protected], and [email protected].

To learn more about technology-first, automated customer experiences, watch our webinar, Strategies for Customer Experience (CX) Success in an Uncertain World, for trends and recommendations on what to prioritize to deliver exceptional customer experience.

How Technology Can Help the Wealth Management Industry Navigate Coming Changes in 2023 | Blog

March 24, 2023

With the economy headed for slower growth, technology is more important than ever to enable companies to better serve customers by providing hyper-personalized experiences. Read on to learn how the disruptions will impact the wealth management industry and the role technology and service providers can play to help wealth managers navigate the choppy waters ahead.

In light of changing investor preferences, mounting regulatory pressures, and a looming economic slowdown, the wealth management industry is at the cusp of change. While the industry has demonstrated good resiliency and recovery post-pandemic, signs point to subdued growth in the next few years.

The wealth management industry has been experiencing one of the longest periods of market growth and economic stability in recent history. Financial support by governments, lower interest rates, and limited consumption opportunities have contributed to rising household wealth, generating increased revenues for wealth management companies from more fees and advisory support.

But the rapid rise in interest rates and fear of an economic slowdown will put pressure on this industry in 2023. Let’s look at the factors disrupting the wealth management industry in the first of our two-part series.

Fundamental change in ecosystem participants – passing trend or here to stay?

The industry is seeing structural changes in ecosystem participants. Traditional wealth managers are no longer the only players offering wealth management services and products. Challenger banks, pension providers, insurance firms, super-apps, nonbank financial companies (NBFCs), and nonbank financial institutions (NBFIs) are entering the market and creating competition.

These emerging segments already have access to a large customer base supplemented by data insights on demographics and buying patterns. This enables them to remove silos for customers and simultaneously improve income streams by reducing churn risk.

Customers now can access investment services within an umbrella of existing offerings. While this is a win-win for both parties, it is making wealth managers apprehensive as they realize the critical importance of retaining and more effectively serving their current customers.

Rethinking growth versus profitability conundrum – impact of a potential slowdown?

While the pre-pandemic era was all about expanding and tapping into new customer segments, the strategy for serving various customer bases has significantly shifted. With the changing market dynamics, the focus has morphed from expanding and tapping into newer segments to building trust with existing customer segments and enabling hyper-personalized experiences.

A potential economic slowdown would have ripple effects on the wealth management industry. The focus on rapid growth would take a backseat as enterprises pivot their attention to reducing costs and improving profitability. This would directly impact tracking advisor productivity, improving advisor-to-client ratios, and enabling hyper-personalized experiences.

At the same time, providing access to emerging themes like Environmental, Social, and Governance (ESG) and digital assets will prove to be differentiators in the long run. Regulatory activity is heating up in the ESG space and will lead to corresponding technology implications for wealth managers’ IT estate, as previously discussed in our blog, New Sustainability and ESG Investment Regulations will Spur a Second Digitalization Wave in Wealth Management.

Technology implications – will the IT estate need to be re-examined?

The wealth management technology estate traditionally has been characterized by multiple disparate systems siloed by products or functions, fracturing the customer experience. At its core, wealth management grapples with a massive data problem – how to effectively analyze customer data, understand their journeys, and identify better cross-sell/upsell opportunities.

Wealth managers need an IT estate that is flexible enough to accommodate these hyper-segments and different products, and their underlying data to address these evolving demands at speed and scale.

Identifying the right platform partner, enabling product expansion via ESG and digital asset offerings, and quickly disseminating this information to advisors will be key priorities for wealth managers as they assess their technology estates.

Identifying the ecosystem strategy for system integrators and other technology companies to improve fractured customer experiences will be equally important for technology providers. At the same time, service providers also will need to orchestrate and assemble best-of-breed solutions for wealth management clients by building a robust partnership ecosystem.

As wealth managers grapple with these market changes, technology has never been more important to help them better prepare and tackle the potential challenges coming their way.

The key questions that need to be answered include:

How can the service cost be reduced?
How can the right tools be used to improve advisor productivity?
How can a microservices-based Application Programming Interface (API)-enabled composable core be built?
How can data be leveraged to enable personalized client experiences?
How can a scalable and purpose-built cloud infrastructure be used to run mid- and back-office operations on the cloud?

We are interested in hearing how wealth managers are preparing and tackling these market dynamics, and how this is manifesting in the conversations technology and service providers are having with clients. Please reach out to [email protected] or [email protected] to share your thoughts. In our next blog, we will look at the future state of the wealth management industry and provide a technology architecture blueprint for this space.

Learn more about how to deliver better customer experiences in our LinkedIn Live session, Frictionless Customer Experiences: The Key to Unlocking Satisfaction.

Experience, Data, and Trust – The Industrialization of Data-driven Personalized Experiences | Blog

March 1, 2023

Balancing experience with data and trust is essential to delivering engaging personalized experiences for customers and driving business success. Developing a robust and scalable automated process for data-driven personalization is critical for enterprises to win in the evolving personalization and interactive experience segment. Read on to learn more.

Customer experiences have become increasingly prevalent with the democratization of the internet, coupled with significant technological and data processing advancements over the past few years. Enterprises are now realizing the value of prioritizing the people side of business. Creating positive personalized experiences for customers can foster loyalty, increase customer satisfaction, and drive repeat business. On the other hand, negative experiences can damage a reputation and reduce customer loyalty. Let’s explore the importance of personalization.

Personalization – then, now, forever

Personalization is not a new concept. It has existed for decades. Enterprises must capture users’ attention and stand out to thrive. According to Everest Group estimates, more than 70% of consumers interact with a personalized promotional message.

Personalization, more commonly known as “persona-based personalization,” mostly involves grouping users into segments or personas based on common characteristics or behaviors. This approach can be effective in delivering relevant content or offers to a large group of users with similar interests or needs, based on demographics, purchase history, or browsing behavior.

Today, technological advancements have changed the landscape. Categorizing consumers is difficult because they don’t have just one interest area. The plethora of information available online has shifted the power to consumers who determine their preferences, disrupting brands that are no longer in charge.

As a result, brands now are also adopting “person-based personalization,” a form of personalization that considers the individual’s unique needs and habits instead of categorizing the user into specific buckets. Personality-based personalization is a 1:1 approach, where enterprises focus just on the customer as an individual. Everything revolves around the individual as a person, ranging from interactive experiences to advanced personalized marketing strategies. While persona-based personalization involves a large sample size, person-based personalization involves a sample size of just the individual.

Because person-based personalization has the potential to deliver high returns on investment (ROI) to enterprises, deploying an industrialized process for real-time person-based personalization is essential.

While most brands have invested in personalization, some remain reluctant to fully embrace real-time data-driven personalization at scale, which involves personalizing every touchpoint in the customer’s journey based on real-time context. This method requires a unique interplay of data, intelligence, and omnichannel strategies. Developing an industrialized process for delivering individual personalization beyond the required data analysis is essential for enterprises.

Data-driven personalization at scale is the need of the hour

Data is the most critical requirement for delivering effective personalization. Personalization is driven by insights into individual preferences, behaviors, and needs that only can be obtained by collecting and analyzing data. Data collection needs to be well-thought-out. Enterprises require large volumes of data collected from multiple sources, and this data needs to be of good quality, accurate, and relevant because poor-quality data can lead to incorrect insights. Collecting diverse and up-to-date information is another important aspect.

The scope of data gathering has increased too. In the past, customer data was mainly collected via offline surveys, point-of-sales, and telecommunication, just to name a few. But the increased digitization supplemented with advancements in data and analytics has greatly impacted personalization by also allowing for collecting and analyzing vast amounts of data through digital channels. This has led to more seamless personalized experiences for users and has helped companies build deeper relationships with their customers.

An Everest Group study suggests that 78% of startups in the customer experience (CX) space leverage Artificial Intelligence (AI) to develop more relevant and engaging solutions for customer conversion, engagement, and retention. With the rise of AI, personalization has become even more precise and can consider a wider range of factors such as emotions, mood, and context.

However, significant investments are required if enterprises want to set up in-house industrialized data collection and analysis. This is where data platforms come into the picture. Data platforms can be thought of as purpose-built systems or infrastructures to collect, manage, and process large data amounts. It typically includes technologies and tools for data storage, data processing, data integration, data security, and data governance.

Data Experience Platforms (DXPs) offer a collection of tools such as Digital Asset Management (DAM), Customer Relationship Management (CRM), Customer Data Platforms (CDP), and personalization tools that can meet the needs of enterprises, as illustrated below.

Exhibit 1. Data collection tools for aiding personalization efforts

How privacy and data guidelines affect user data collection

As discussed, data is essential to personalization. Clearly, the more data enterprises have, the better insights they can gain, and the better experiences they can provide. However, in today’s digital environment, user safety and trust are crucial. Consumer awareness is on the rise, with people growing increasingly skeptical about sharing their data. Concerns over how personal data is handled and safeguarded by enterprises are growing.

According to the United Nations Conference on Trade and Development (UNCTAD), 71% of countries today have some legislation around data protection and privacy, while 9% have draft legislation. Stringent data regulations such as the General Data Protection Regulation (GDPR) in the European Union, Nigeria’s Data Protection Regulation (NDPR), The California Consumer Privacy Act (CCPA), etc., have provisions to heavily penalize enterprises misusing consumer data.

Adding to this is the increasing push to eliminate third-party cookies. While browsers such as Apple Safari and Mozilla Firefox have already taken the step, market leader Google Chrome also has announced its intention to phase out third-party cookies by 2024, extending its earlier deadline. This has brought into focus the collection of voluntary data from users (Zero-party data) and first-party sources (1P data).

Zero-party data is a valuable information source for enterprises as it provides the best clarity to individual preferences. Developing a trust-based relationship with users and having total transparency about the use cases of zero-party data is essential for enterprises. Establishing a trust-based relationship might lead users to voluntarily provide more insights.

First-party data collection also needs to be transparent and strong security measures should be implemented to protect personal data. Sensitive data must be encrypted, security regularly audited, and effective access control measures adopted. Brands need to consider the needs of empowered users by honoring their “right to forget” and “untraceable” requirements.

As enterprises possess an enormous amount of users’ personal data, they also need to take the moral responsibility to protect that data. Customers who provide their data to enterprises understandably want their data to be protected and not misused without their knowledge. According to Everest Group estimates, more than 50% of customers are willing to share their personal data with companies but only with a clear understanding of how it will be used.

Combining automation with data and trust

Winning user trust and gaining access to more voluntarily provided data is no doubt essential to achieving better person-based personalization. But this data needs to be utilized in the best manner by making use of tools (such as personalization engines and marketing automation tools) to set up an industrialized workflow for large-scale 1:1 person-based personalization. Without a robust and scalable automated process for large-scale person-based personalization, enterprises tend to lose.

Exhibit 2. The industrialized workflow for achieving data-driven 1:1 personalization

Greater trust = Greater data = Greater personalized experiences

Personalization starts from a persona-based mechanism and, with an ever-increasing user base, shifts to person-based personalization. User data is the only way to go forward. User data and trust need to go hand in hand. To win customer attention, trust, and loyalty, enterprises need to know how to use the right data at the right time and how to go ahead with individual personalization without breaching the intrusion barrier.

Exhibit 3. Relationship between Trust and Personalization

The outlook

Overall, the personalization and interactive experience landscape has become more complex and diverse, requiring brands to constantly adapt and stay up to date on the latest trends and technologies to reach and engage customers. However, even with increasing investments, the ROI might decline due to the heightened competition making it more challenging to stand out and generate returns, technical limitations, and privacy concerns, just to name a few.

Enterprises need to break down their user base into smaller, more targeted segments to achieve 1:1 person-based personalization and tailor products, services, and experiences to each individual user’s specific needs and preferences. The smaller the segments, the better enterprises can tailor their personalization efforts and achieve a more effective 1:1 experience.

In addition to the investment level, the strategy and implementation of personalization and experience efforts also needs to be considered. A well-designed and executed strategy can generate returns even with increasing investments. By balancing experience with data and trust, companies can deliver engaging personalized experiences that build strong relationships with users and drive business success.

If you have questions about selecting the right data platform or want to know more about personalization, interactive experiences, or discuss developments in this space, reach out to our analysts at the Adobe Summit, or get in touch with the Everest Group team at [email protected], or [email protected].

To learn about the comprehensive roadmap for enterprises to achieve business outcomes and mitigate challenges in their journey to accomplish truly industrialized 1:1 person-based personalization, see our report Emergence of CDPs: Charting the Path to Data-driven Personalization.

Check out our webinar, Strategies for Customer Experience (CX) Success in an Uncertain World, to learn key trends and hear recommendations on what to prioritize to deliver exceptional CX.

Category: CX / Customer Experience