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Gartner identifies Four Pillars driving tech innovation in customer service
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There are four pillars driving technology innovation across customer service and support (CSS) organisations, including getting connected, process orchestration, knowledge and insight and resource management.The Gartner Hype Cycle for CSS Technologies, 2022 contains the most-important maturing technologies for supporting customers. The Gartner Hype Cycle provides a view of how a technology or application will evolve over time, providing a source of insight to manage its deployment within the context of a specific business goal.The Gartner Hype Cycle allows clients to get educated about the promise of an emerging technology within the context of their industry and individual appetite for risk.

“Efforts to increase the use of digital channels and improve automation rates using analytics are driving customer service technology spending, despite economic headwinds,” said Drew Kraus, VP Analyst at Gartner. “The technologies on this year’s Hype Cycle aim to enhance customer service, create a more seamless customer journey, and better design and direct future journeys.”

Getting connected

This category of technology focuses on delivering a channel-agnostic, architected design to create customer service journeys, including intelligent self-service.

For example, cloud contact center as a service (CCaaS) is a cloud-based application service platform that enables organizations to manage multichannel customer interactions holistically with prepackaged applications to support customers and employee engagement. Creating a seamless customer journey across assisted and self-service channels is the top priority for customer service leaders in 2022 and accelerating CCaaS adoption furthers this endeavor.

“Cloud enables organizations to focus on transforming customer experience (CX), rather than managing the day-to-day technology needs of users, which is fueling the 22% CCaaS market growth to $10.9 billion in 2023,” said Kraus.

Additional technologies on the Hype Cycle within this category include augmented reality for customer support, consumer messaging applications, proactive communications applications and services, and video contact center.

Process orchestration

The technologies within the process orchestration pillar support increasingly complex and personalized customer engagements, often via automation. For example, chatbots, a form of virtual customer assistants (VCAs), are expected to become the primary customer service channel for a quarter of organizations within five years as they evolve to handle more involved customer requests.

“Automating interactions in the enterprise has tremendous business impact that cannot be understated,” said Kraus. “The emergence of sophisticated AI voice capabilities have made large-scale call center automation viable, with huge potential for savings and positive CX.”

Additional process orchestration profiles on the Hype Cycle include customer engagement center (CEC), customer technology platforms and multiexperience.

Knowledge and insight

Innovations within this category center around the delivery of customer and operational insights, and the recommendation of next best actions across all functional groups. Key technologies on the Hype Cycle here include customer service analytics, customer journey analytics, voice-of-the-customer solutions and knowledge management for customer service.

As making better use of analytics and AI remains a top three priority for CSS leaders in 2022, many of the technologies in this category can help. One example is customer data platforms (CDPs), or software applications that support marketing and CX use cases by unifying a company’s customer data from multiple channels. CDPs optimize the timing and targeting of messages, offers and customer engagement activities, and enable the analysis of individual-level customer behavior over time.

Resource management

This category consists of technologies that engage and empower employees, resulting in a stronger CX. For example, workforce engagement management (WEM) solutions expand on the already mature workforce optimization (WFO) market by accommodating complementary technologies – interaction assistance and voice of the employee (VoE) – that help drive employee engagement. They are expected to have a high impact on service organizations within two to five years.

“WEM brings a much-needed additional dimension to the management of contact center employees,”  said Kraus. “The increase in gig and freelance workers is putting pressure on customer service departments to ensure a high perception of employee experience, without which securing their commitment will be increasingly challenging.”

Other technologies on the Hype Cycle within this pillar include mobile field service management and field service workforce optimization.

Gartner clients can read more in “Hype Cycle for Customer Service and Support Technologies, 2022.”

Marketing budgets have plummeted, says Gartner
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Marketing budgets have fallen to their lowest recorded level, dropping to 6.4% of company revenue in 2021 from 11% in 2020, according to Gartner.

In the annual Gartner CMO Spend Survey, the company surveyed 400 CMO and marketing leaders in North America, the UK, France and Germany from March 2021 through May 2021, tracking the critical areas marketers are investing in and where cuts are being made from people, programs and technologies.

“Despite facing in-year budget cuts in 2020 due to the pandemic, most CMOs expected budgets to bounce back in 2021. This budgetary optimism was misplaced, as marketing budgets have fallen to their lowest level in the history of Gartner’s CMO Spend Survey (see Figure 1),” said Ewan McIntyre, co-chief of research and vice president analyst in the Gartner for Marketers practice. “However, these cuts have been a slow burn over the course of the last year, where many marketing budgets have not recovered what was originally lost.”

The annual Gartner CMO Spend Survey, 2021 revealed that no one – regardless of company size or industry – has escaped swinging cuts in marketing budgets. In fact, no industry achieved a double-digit budget in 2021 (see Figure 2). Travel & hospitality, manufacturing and tech product companies have experienced the greatest cuts in 2021.

Meanwhile, consumer products and goods (CPG) companies reported the strongest 2021 marketing budgets at 8.3% of company revenue. Large enterprises got hit the hardest – companies with revenue of more than $2 billion reported the lowest average marketing budget of just 5.7%. On the other hand, companies with revenue of under $500 million reported the highest allocation to marketing with an average budget of 8.6% of revenue.

Gartner research shows CMOs have shifted spending commitments across their channels and programs, with pure-play digital channels – owned, paid and earned – dominating those priorities and accounting for 72.2% of the total marketing budget.

When looking at the largest resource allocation – agencies, media, labor and paid media – agency spend continues to decline.

“Albeit a small dip from 23.7% in 2020 to 23% in 2021, this continual change indicates significant in-housing activity, as CMOs reimagine the capabilities that can be supported by their internal teams,” added McIntyre.

CMOs report that 29% of work previously carried out by agencies has moved in-house in just the last 12-months alone. The focus of in-housing is changing as well – with brand strategy, innovation and technology, and marketing strategy development making up the top three capabilities areas CMOs are moving to internal teams. Meanwhile, marketing technology (martech) continues to dominate, taking up 26.6% of the total budget.

Digital Commerce Tops Program Spend

2020 and 2021 have seen drastic changes to customer buying journeys – both B2C and B2B alike, forcing even digital late-comers to accept the inevitable shift to online channels. When looking at budget allocation by programs and operational areas, CMOs report digital commerce makes up 12.3% of the total budget. Likewise, marketing operations and brand strategy make up 11.9% and 11.3% of the total budget.

However, while marketing analytics still commands 11% of the total budget, it has continuously dropped in prioritization – now in the fourth position in 2021.

“CMOs continue to invest in marketing data and analytics, however, for many, the results have failed to live-up to expectations,” said McIntyre. “Given recent and upcoming regulations, and changes in data collection, we expect this investment area to continue to be a strategically important capability, but also to continue to fluctuate until uncertainties subside.”

20% of brands to abandon mobile apps as Virtual Customer Assistants come to the fore
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Twenty-five percent of customer service and support operations will integrate virtual customer assistant (VCA) or chatbot technology across engagement channels by 2020, up from less than two percent in 2017, according to Gartner.

Speaking at of the Gartner Customer Experience Summit in Tokyo, Gene Alvarez, the company’s managing vice president, said more than half of organisations have already invested in VCAs, as they realise the advantages of automated self-service, together with the ability to escalate to a human agent in complex situations.

“As more customers engage on digital channels, VCAs are being implemented for handling customer requests on websites, mobile apps, consumer messaging apps and social networks,” Alvarez said. “This is underpinned by improvements in natural-language processing, machine learning and intent-matching capabilities.”

Gartner says organisations report a reduction of up to 70 per cent in call, chat and/or email inquiries after implementing a VCA. They also report increased customer satisfaction and a 33 per cent saving per voice engagement.

This follows a 2017 Gartner survey that found that 84 per cent of organisations expected to increase investments in customer experience (CX) technology in the year ahead. Other Gartner predictions include:

  • By 2019, 20 percent of brands will abandon their mobile apps.
  • By 2022, two-thirds of all customer experience projects will make use of IT, up from 50 percent in 2017.
  • By 2020, 30 percent of all B2B companies will employ artificial intelligence (AI) to augment at least one of their primary sales processes.
  • By 2020, more than 40 percent of all data analytics projects will relate to an aspect of customer experience.
  • By 2020, augmented reality, virtual reality and mixed reality immersive solutions will be evaluated and adopted in 20 percent of large enterprises as part of their digital transformation strategy.
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