The CXM Boom
You’ve probably recently heard about Salesforce’s stunt in early December with its $28bn buyout of corporate messaging leader Slack. Well, Salesforce, beyond its status as a serious competitor to Microsoft, is above all a leader in the CRM (Customer Relationship Management) software industry. However, more and more firms, from SMEs to listed companies, are starting to take an interest into its twin brother: CXM (Customer Experience Management), which allows companies to be connected to all points of contact in the customer journey to effectively resolve customer dissatisfaction.
🤔 What are CXMs?
Actually, a CXM is kind of an improvement of a CRM as it makes better the customer management throughout all its facets, far beyond the simple customer relationship. Recent studies revealed by PwC show that Customer Experience drives revenue as satisfied customers bring 14x as much revenue as dissatisfied. Therefore, companies interest is to manage the experience of their customers all over their journey.
To show you to what extent it has become a cornerstone for companies willing to improve customer satisfaction and to lower churn, here is an example I found relevant.
👆Need an example?
Few months ago, HelloFresh 🍃 , the largest supplier of meal kits, discovered that a growing number of people stopped using the app for reasons the company was not able to understand. Using Chattermill, a CXM software, allowed them to get that the quality of the meal photo was dramatically leading a high churn as the photos looked “too perfect”. Then, they could rapidly A/B test the sentiment for more rustic photos and, as a result, control and reduce the *churn. Actually, KPIs follow-up is one of the main feature that CXM allow that makes a business grow. Okay, pretty sure you got CXM’s role. Let’s now dive into the industry !
👨🎓 Which are the best-in-class?
Clear leaders of the industry are computer software developers that established for many years and that were able to diversify when CXM really started to be taken into account by companies. On top of them is Zendesk, based on Customer Feedback Management, and which provides direct interaction between the customers and the brand, integrating multiple communication channels and gathering many other business tools to improve problem resolution rate. I would complete the podium by Qualtrics and Medallia that are used to big firms preoccupations and provide a very ergonomic interface.
🚀 What are the future trends?
Nevertheless, Customer Feedback Management (CFM) is going to be enhanced by new technologies that appeared on the market, and CXM is on the verge of reaching new milestones with these.
I would say that two technologies should drive the market in the upcoming months and years. These trends are going to shake the whole industry which was mainly based on customer feedback. The companies providing these kinds of CXM can start collecting and analyzing customer feedback and get an even more precise insights of customers’ thoughts.
- VoC (Voice-of-Customer) provide tools to complete 4 key activities (Listening, interpretation, acting and monitoring). CX pros identify key customer listening posts across channels and departments and then collect feedback. Methods for collecting feedback include surveys, social media, ratings and reviews, chat, etc. Based on market presence and key features criteria, VoC specialists are Survey Monkey or iPerception that can count on Lyft or Salary.com as clients.
- UDA (Unified Data Analytics) help firms aggregate both structured and unstructured data from multiple data sources into a unified view and then analyze the data. CX pros use these tools to bring together insights collected through the many and various CFM tools. Here I would say that as the niche is young, no clear leader has emerged yet, but some companies with today small revenues (<$12M *ARR) will soon get more market shares. Among them I’d like to highlight Chattermill, the London-based company, that already works with strong clients like Uber and Deliveroo.
🔮 Future of CXM
I would say that this industry is beginning its growth and many technologies would be created to enhance the previous ones. That’s definitely a market to watch out for investors, and a topic to master for companies looking for growth to manage their customers’ pipeline.
Hope that this article introduced you well the rise of CXM platforms. If you want to learn more, take a look to this blog from Forrester.
*The churn, or customer churn, is the percentage of customers that stopped using a service during a certain period of time.
*ARR means Annual Recurring Revenue, this is basically the annualized version of monthly recurring revenue (i.e the amount a company can expect to earn from its customers based on a subscription model)
