Digital-First Customer Service Solutions See a Short Shelf Life Amid Acquisitions

It's really hard for companies to deliver great service today because of the disjointed and overly costly tech ecosystem that's needed to do so. Today, you need the following:

  • Contact center technologies to capture voice, digital, and social inquiries and route them to the right agent pool;
  • Workforce engagement technologies to manage agent staffing, monitor the quality of service that they deliver, and coach them;
  • Customer relationship management (CRM) customer service technologies to capture and to resolve customer inquiries; and
  • Digital-first technologies to offer best-in-class automated and assisted engagement in digital channels.

Needless to say, customer service technology must be more unified. It must be easier to consume and easier to change as company needs change. This will let companies, both large and small and with variable IT budgets, deliver on customer expectations.

There's a lot of acquisitions happening in each of these spaces, and a lot of organic development as these categories consolidate. For example, every contact center vendor offers workforce engagement, and recently, the core CRM vendors started moving into this space. It's apparent that dominant vendors in each of these categories are jockeying for leadership positions to offer end-to-end solutions for customer service.

The current battleground is around digital channels that are more popular than ever since the pandemic. There's a category of digital-first customer service vendors that deliver automated and assisted engagement via chat, messaging, cobrowsing, video, and social interactions. Some even support digital or on-screen voice (ex. click-to-call and click-to-call-back). They use customer- and agent-facing chatbots to automate engagement and tap into knowledge bases for curated content.

These digital-first solutions have broad appeal to teams that support authenticated or anonymous customers in the pre- and post-purchase stages. These teams include digital operations, digital experience, e-commerce, digital marketing, and customer service.

Vendors also offer digital-first capabilities that go beyond what contact center vendors and CRM vendors offer, and many teams use these digital-first solutions alongside their contact center or CRM systems.

Now, CRM and contact center vendors are buying up the digital-first vendors as they fight it out among themselves for market dominance. Case in point: CRM vendor Pegasystems acquired In The Chat, Zendesk acquired Smooch, Enghouse acquired Eptica, and Cisco acquired IMImobile. Recently, Genesys announced its intent to acquire Bold360 from LogMeIn.

The battle for the heart of the contact center is heating up. The next move will be to rethink pricing models to make them usage- or consumption-based instead of based on seats.

Kate Leggett is a vice president and principal analyst at Forrester Research.