Customer Engagement Solutions Market Size, Share & Industry Analysis, By Deployment Type (Mobile Apps and Web-based), By Component (Omnichannel, Reporting and Analytics, Chatbot, Workforce Optimization, and Others), By Enterprise Type (Small and Medium Enterprises (SMEs) and Large Enterprises), By Industry (BFSI, Retail and E-commerce, Healthcare, Travel and Hospitality, Media and Entertainment, and Others), and Regional Forecast, 2024-2032

The global customer engagement solutions market size was valued at USD 20.58 billion in 2023 and is projected to grow from USD 22.34 billion in 2024 to USD 48.51 billion by 2032, exhibiting a CAGR of 10.2%. North America dominated the global market with a share of 40.52% in 2023.

A customer engagement solution helps businesses create and manage customer experiences through personalized interactions with the help of various communication channels. Through the interactions, the users have gained access to customer journeys, which can be analyzed, managed, and optimized through the platform.

The implementation of customer engagement software by the companies helps in the following ways:

• Analyzing customer engagement requirements


• Selecting suitable platform-based customer engagement software


• Multi-channel interactions (phone, web, email, social media, and others)


• Integrating with other systems such as CRM, ERP, business intelligence, and others


• User training and after-launch support

The COVID-19 pandemic positively affected market growth due to rapid digital channel adoption and social and virtual assistant technology created new dynamics for the human workforce. Due to social distancing, enterprises made investments in digital workforce capabilities through customer interaction volume types. In addition, demonstrating understanding through digital channels became the new standard of customer engagement.

Moreover, the advancement of digital transformation, such as artificial intelligence (AI), shift toward cloud adoption, and integration of solutions into various platforms such as ERP, CRM, and others, drive demand for customer engagement solutions. In addition, growing demand for consumer satisfaction and engagement flows across the industry and is expected to increase opportunities for the market.

IMPACT OF GENERATIVE AI

Adoption of Generative AI Tools across Sales and Marketing Processes Propels Market Growth

The adoption of generative AI tools is growing rapidly. Various businesses are focusing on improving their sales and marketing strategies by adopting AI technology to automate the content generation process and save both time and resources.

According to various industrial analyses, in 2023, 38% of executives are focused on investing in generative AI to improve the customer experience, while 85% of executives indicated that generative AI will be interacting directly with customers in the next two years.

Furthermore, generative AI allows companies to create a vast amount of personalized content that can be used across various marketing channels, from social media to email campaigns and improve customer experience through business processes. For instance,

• In October 2023, SAP SE introduced a generative AI capability across the SAP Customer Experience portfolio. These new capabilities allow businesses to complete time-consuming tasks, quickly analyze data from across the enterprise, and gain actionable insights and personalized experiences for customers.

Customer Engagement Solutions Market Trends

Increasing Deployment of Cloud-Based Solutions across Various Industries to Fuel the Market Growth

With rapid technological advancement and seamless scalability, cloud-based solutions are changing the way sales and marketing teams sell, connect, and engage with customers, changing the company's operations, marketing their products, and establishing relationships with the customer. The cloud solutions integrate data, allowing sales teams to access essential customer information and making it accessible virtually anywhere. In addition, these solutions offer advanced analytics and machine learning capabilities, enabling businesses to analyze customer behavior and preferences. For instance,

• In January 2024, VSPAGY, a personalized video interactive platform, partnered with Netcore Cloud, a company offering AI-powered marketing automation and customer engagement solutions. This partnership aims to provide marketers with a comprehensive suite of tools and approaches for businesses to enhance their digital marketing techniques.

Thus, the adoption of cloud-based solutions by the market players and offerings to the customers drives the customer engagement solutions market growth.

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Customer Engagement Solutions Market Growth Factors

Deployment of Multi-channel Customer Engagement Solutions to Drive the Market Growth

Multi-channel customer engagement provides interaction with customers through various channels, both online and offline and creates seamless and consistent experiences. The multi-channel solution allows customers to engage with businesses through different platforms such as email, phone calls, websites, social media, and physical stores.

Moreover, the multi-channel approach engages the businesses by providing convenience, personalization, and a unified experience throughout the customer journey. It also impacts a business’s bottom line through conversions and increases sales by delivering personalized and timely messages through various channels. For instance,

• In July 2023, Alendei Platforms Pvt Ltd., a communication solutions provider, launched a multi-channel & omnichannel chatbot product. This solution is designed to create enterprise customer communication and engagement through technological advancement and industry expertise.

Thus, the adoption and deployment of multi-channel solutions drive the growth of the market.

RESTRAINING FACTORS

Poor Personalization and Lack of Marketing Strategies May Hamper the Market Growth

With the growth of digital technology and its effect on customer relations, companies must rethink their sales and communication approaches in order to keep generating customer engagement. Marketers are increasingly under pressure to generate revenue for the market. Moreover, personalization refers to the practice of adapting the customer experience to meet the individual needs and preferences of the customer and ensuring that the customer data used for personalization is accurate and up-to-date.

During this process, if the data used to personalize a customer's experience is improper, it creates a less appropriate and engaging experience, which can affect the relationship with the customer. Moreover, the lack of strategic techniques is slowly creating an impact on the businesses, as service teams are not tracking and identifying the root cause of the customer problems and are passing them over to other departments, which affects the market.

Thus, the lack of personalization techniques and improper marketing strategy limits the adoption of customer engagement solutions.

Customer Engagement Solutions Market Segmentation Analysis

By Deployment Type Analysis

Increasing Demand for Mobile Apps to Attract Customers to Drive the Segment Growth

Based on deployment type, the market is segmented into mobile apps and web-based.

The mobile apps segment holds the largest market share and is expected to grow at the highest CAGR over the forecast period due to the increasing usage of smartphones and internet availability. Moreover, various companies and brands are focusing on investing in collaboration with market players to develop mobile applications. These apps enable organizations in increasing their revenue and building relationships with customers. In addition, the apps can increase their return on investment, encourage first purchases, bring back loyal customers, and ensure customers get a reliable brand experience. For instance,

• In February 2024, Pulsate, a mobile-first engagement solutions provider, raised USD 7.7 million in Series A funding managed by Curql Collective and TruStage Ventures. The company aims to use this funding to accelerate digital banking relationships, support the expansion of staff and resources, and drive deposit growth through targeted communication.

Due to increasing demand for data privacy, the demand for on-premise customer engagement solutions has increased. Also, owing to rising requirements and IT funds, the adoption of on-premise solutions is expected to gain traction. Moreover, the growing product launches and deployment of mobile applications for better customer experience are driving the customer engagement solutions market growth.

By Component Analysis

Deployment of Omnichannel Strategy for Personalized Customer Experiences to Fuel the Segment Expansion

Based on component, the market is segmented into omnichannel, reporting and analytics, chatbot, workforce optimization, and others.

The omnichannel segment held the largest market share in 2023 and is expected to grow at the highest CAGR during the forecast period. The omnichannel customer engagement strategy combines the messaging and interactions with customers across different channels. It provides access to data that enables the user to deliver personalized customer experiences, exceed customer expectations, and boost customer loyalty. Various organizations are adopting an omnichannel strategy, which allows businesses to support every customer’s journey and maintain consistency in messaging across all channels. For instance,

• In June 2023, MoEngage partnered with Karix, a subsidiary of Tanla, a global CPaaS provider, to enable highly personalized customer experiences. This partnership strengthened Karix’s ability to provide personalized and timely customer engagement solutions to enterprises and end-users.

The chatbot segment shows prominent growth in the market due to engagement with the customer in real-time and relatable conversations. The adoption of chatbot solutions engages customers across their lifecycle by providing immediate responses, reminders, product recommendations, interactive quizzes, guidance to enhance customer engagement, and satisfy customers' needs.

By Enterprise Type Analysis

Increasing Demand for the Solution by Large Enterprises to Spur the Segment Growth

Based on enterprise type, the market is segmented into small and medium enterprises (SMEs) and large enterprises.

The large enterprises segment holds the largest market share due to the increasing adoption of the solution to streamline operations, improve customer service, create brand loyalty, and develop an effective marketing strategy. In addition, large enterprises are adopting these solutions as they offer ease in set-up and use, can be integrated with other systems such as a CRM database to develop better customer experience, and create a personalized customer experience through customization.

By Industry Analysis

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Rising Demand for Customer Engagement Solutions in BFSI Industry to Propel the Segment Expansion

Based on industry, the market is divided into BFSI, retail and e-commerce, healthcare, travel and hospitality, media and entertainment, and others.

The BFSI segment holds the largest market share due to the advancement of new technologies and evolving customer expectations and behavior, which have compelled BFSI institutions, including traditional banks, to adopt customer engagement solutions for digitally-savvy customers. For instance,

• According to the State of Retention Marketing Report by WebEngage, the Fintech and BFSI industry sent over 24 billion messages in 2022, wherein 91% of all messages were sent through emails and app push notifications. In addition, many banking and financial institutions saw an increasing dependence on channels such as SMS and Web Push.

Moreover, the banking industry is witnessing the growth in web-based or mobile data entering the systems and the use of emerging technologies such as artificial intelligence combined with intuitive marketing technology platforms.

The retail and e-commerce segment is expected to grow at the highest CAGR during the forecast period due to a seamless and personalized customer experience provided by companies across multiple channels. Moreover, companies are adopting a platform that allows the creation of a unified and consistent customer experience across various touchpoints. This platform is poised to also help them receive personalized and relevant customer interactions through in-store, online, or other channels such as social media anytime and anywhere. For instance,

• In August 2023, Mackenthun’s Fine Foods, a multi-store operator, partnered with eGrowcery, a developer of retail food industry eCommerce platform for grocers to upgrade the eCommerce experience for the shoppers with customized search functions, fully integrated loyalty experience, integrated prepared food and catering, and time-saving fulfilment approach.

REGIONAL INSIGHTS

Geographically, the market is categorized into five key regions: North America, South America, Europe, the Middle East & Africa, and the Asia Pacific.

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North America holds the largest customer engagement solutions market share due to the presence of market players in the U.S., offering advanced technological infrastructure and a strong presence in industries such as retail and e-commerce, BFSI, and travel and hospitality. In addition, due to increasing internet usage and presence in various social media platforms, market players are implementing these solutions into various channels with the aim of generating insights to understand consumer behavior better and make strategic business decisions. Moreover, these players are showing interest in customer engagement solutions by investing in the market to match the rising customer demand across Canada. For instance,

• In July 2023, Kaleyra, Inc. introduced the WhatsApp Business Platform as a part of its omnichannel offering in the U.S. The company enables U.S.-based businesses to interact with customers on WhatsApp and provide engaging and personalized customer experience.

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The Asia Pacific is expected to grow at the highest CAGR during the forecast period due to the increasing usage of smartphones and the shift of companies toward mobile apps to interact with customers through their brands. Companies are focusing on developing their brands across regions, particularly in China, India, Japan, and Taiwan, to engage with consumers across the lifecycle. Moreover, the increasing use of e-commerce platforms and online banking processes enables organizations to interact with customers and create brand loyalty, which further drives the growth of the market. For instance,

• In November 2023, Mirum India, a Wunderman Thompson company, partnered with WebEngage to integrate Mirum’s wealth of experience and expertise and WebEngage's marketing automation platform in MarTech projects to create a more holistic approach and deliver a best-in-class engagement solution to the users.

Europe shows prominent growth in the market due to investments, technological advancement, and collaborations with the regional industrial sectors such as banking, travel and hospitality, e-commerce, and others, by enabling customers to have good customer satisfaction, creating loyalty toward the brands. The adoption of engagement solutions by the companies enhances the businesses through marketing strategies, campaigns, and customer engagement. For instance,

• In November 2023, Viveri Group acquired Dynamic Mobile Billing and Spoke Interactive to integrate customer engagement, call handling, and payment solutions in the organizations to maximize the engagement and monetization of their audiences with a wide range of services and capabilities globally.

The market growth of customer engagement solutions in the Middle East & Africa and South America is mainly driven by the increasing investment in deployment of these solutions to use in different channels and provide more personalized and natural experiences for customers and continue to use personalization for customer acquisition and engagement across the region.

List of Key Companies in Customer Engagement Solutions Market

Market Leaders Focus on Expanding Their Product Offerings to Gain a Competitive Edge

Key players in the global market, such as MoEngage, Freshworks Inc., OneSignal, Braze, CleverTap Private Limited, Zoho Corporation Pvt. Ltd., and others, are focused on expanding their geographic boundaries by introducing specific solutions and new products to interest a vast customer base, thus improving revenue.

• In April 2022, Freshworks Inc. announced the availability of Freshworks CRM for e-commerce, in the Shopify App Store. This solution is directly integrated with Shopify, and it is designed to provide a unified CRM to millions of merchants. With this tool, merchants can offer marketing, and sales, live conversational support, all in one place. This enables consumers to make purchases online easily at any time they want.

List of Key Companies Profiled:

• MoEngage (U.S.)


• Freshworks Inc. (U.S.)


• OneSignal (U.S.)


• Braze (U.S.)


• CleverTap Private Limited (U.S.)


• Zoho Corporation Pvt. Ltd. (India)


• SAP (Emarsys) (Germany)


• Sprinklr (U.S.)


• Verint Systems Inc. (U.S.)


• Exotel Techcom Pvt. Ltd. (India)

KEY INDUSTRY DEVELOPMENTS:

• February 2024: CleverTap partnered with Zoomcar, a car rental company, to leverage CleverTap's advanced AI capabilities and TesseractDB to create personalized customer engagement through interactions, targeting re-engagement campaigns, and maximizing customer lifetime value with the help of optimized omnichannel experiences.


• February 2024: SAP Emarsys collaborated with Annex Cloud, a cloud-based loyalty management platform provider, to integrate SAP Emarsys Customer Engagement Platform and Annex Cloud’s Loyalty Experience Platform to deliver personalized, omnichannel experiences and customer interactions. The integrated solution will track customers, manage promotions, score behaviors, and deliver personalized experiences.


• January 2024: Bharti AXA Life Insurance partnered with MoEngage by deploying MoEngage’s engagement platform into the life insurance industry by streamlining the communications flowing through channels such as WhatsApp, emails, and SMS and transforming its customer engagement initiatives.


• December 2023: Rayna Tours, a tour operator in the UAE, partnered with MoEngage to integrate its customer engagement platform and enable Rayna Tours to leverage data-driven insights for personalized customer engagement, drive higher booking conversion rates, improve user experiences, increase customer retention, and boost revenue.


• November 2023: Sprinklr partnered with WPP to create AI solutions to help global clients deliver more consistent and personalized customer experiences using Sprinklr’s unified customer experience management platform to create optimized content to reach the right audiences.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as prominent companies, product/service types, and leading applications of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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