| Study Period | 2019 - 2032 |
| 2024 Market Size | USD 24.4 Billion |
| 2025 Market Size | USD 27.2 Billion |
| 2032 Forecast | USD 54.7 Billion |
| Growth Rate (CAGR) | 10.5% |
| Largest Region | North America |
| Fastest Growing Region | Asia-Pacific |
| Nature of the Market | Fragmented |
| Largest Enterprise Size Category | Large Enterprises |
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The global customer engagement solutions market size is USD 24.4 billion in 2024, and it will grow at a CAGR of 10.5% during 2025–2032, reaching USD 54.7 billion in 2032.
The growth of the market is attributed to the rising usage of these solutions in various industries, such as FMCG, BFSI, healthcare, and telecommunications. Moreover, with the advancements in the internet technology, the cloud is increasingly being leveraged to host these solutions. However, the biggest drivers for the market are the increasing adoption of smartphones, laptops, and other connected devices, growing usage of the internet, e-commerce, and social media, and compulsion of companies to reduce customer churn rate amidst the stiff competition.
The biggest trend in the customer engagement solutions market is the integration of advanced technologies in them, such as AI, NLP, and robotics. The adoption of these technologies not only automates the process but also makes it more efficient. AI and NLP are widely used in to understand customers’ queries, requirements, and concerns, so that the correct customer service person can be deployed. Using these technologies to handle the initial conversation with customers quickens up the process, reduces manpower needs, frees up employees for more important tasks.
Similarly, robotic process automation can gather data on customer engagements from various digital marketing platforms, such as company websites, social media, SMSs, and emails. The data can range from written sentences, voice notes, and videos to tabulated information. AI and NLP can be used to make unstructured data easier to understand for company executives, making customer engagement better and more satisfactory for everybody involved.
Further advancements in these technologies include chatbots that utilize computer-generated human faces and voices instead of the regular word-based engines that pop up on the webpage. These human-like chatbots can be tailored according to the regional or country the customer is from, with changes in the facial features, accents, and the languages they use to communicate. People find it more comfortable to talk to someone with a familiar face and culture, which is why such alterations can significantly improve the effectiveness of customer engagements through AI-driven chatbots.
Moreover, ML is deployed to understand what customers are searching for, looking at, reading on, and actually purchasing on the internet, to offer them effective recommendations. Such solutions often use the GPS on people’s phones and computers to track their location and suggest nearby products and services, such as ATMs, retail stores, restaurants, hospitals, and public conveniences.
The customer engagement solutions market is primarily driven by the growing usage of the internet around the world. As per a March 2024 article in Forbes, 5.35 billion people have access to the internet, and this number is expected to climb to 7.9 billion by 2029. This rise is attributed to the government initiatives to strengthen the telecommunications infrastructure and expand connectivity and the declining prices of laptops and smartphones.
This increase in the adoption of connected devices continues to drive the usage of e-commerce, social media, streaming platforms, search engines, and other kinds of websites. Over 5 billion people are active on social media in 2024, which is why companies extensively engage with customers and market their products and services on such platforms.
Even before buying stuff at the store, most people like to conduct comprehensive research on the internet. This gives companies a way to understand what exactly customers are looking for, which is why they collect massive volumes of customer data from the internet. They use it to not only to communicate better with customers but also improve their internal processes. For this, robotic and manned chatbots, automated email & SMS marketing tools, social media campaign creation & management software, and data analysis tools are widely deployed by companies.
The knowledge gained from the information gathered by these computer programs enables users to better align their resources, change product/service pricing, run advertisements targeted at particular groups of people, such as specific genders, age groups, and ethnicities, and make better hiring decisions, among other things.
Seeing the evolution of society in the digital age and companies changing needs with respect to marketing, and increasing number of IT vendors are creating market- and application-specific customer engagement solutions to edge out the competition.
The key restraint for the customer engagement solutions market is the stringent data security requirements in developed countries. Due to the sensitive nature of the customer data companies gather from the internet, they are at a constant risk of cyberattacks. Hence, governments in developing countries have implemented stringent data security regulations both for the developers and users of these digital tools. Failure to comply can lead to hefty fines and even termination of operations; hence, many companies are hesitant to adopt these solutions.
These solutions can also be expensive for smaller companies, which gravitate toward those deployed on the cloud, but they are even more vulnerable to cybercriminals. Further, because a third party hosts these solutions on its computer and servers, the end user often has less control on them and the data. Customization can also be a problem with cloud-based solutions, in contrast to on-premises deployment.
The other major challenge for the market is the difficulties in integrating these solutions into legacy systems, the processing power and RAM might have to be upgraded. Moreover, employees need to be trained in using such feature-heavy software, which can itself be costly, long, and ultimately, unfruitful.
The following components have been studied:
The report offers insights on the following solution types:
Large enterprises dominate the market with 60% revenue contribution. This is because of their widespread customer base, with which they interact through a multitude of channels. These companies also have a huge service and product portfolio, which is why keeping track of the marketing campaigns and customer interactions related to all of them is challenging if done manually. All-inclusive customer engagement tools help large enterprises keep a track of all the online activities related to all their offerings on all internet and phone-based platforms. Additionally, these firms also have ample funds to procure such expensive solutions and pay the trained employees who manage them.
SMEs will have the higher CAGR during the forecast period, as these companies make up the majority of the global economy. The government support for SMEs worldwide allows them to scale their operations and compete with large, multinational corporations. Moreover, the easy availability of cloud-based customer engagement solutions reduces the spending and the burden associated with hiring technically oriented staff and procuring onsite IT infrastructure.
The segment is bifurcated as below:
We have covered the following deployment types:
The industries analyzed in the market are listed below:
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The North America customer engagement solutions market holds the largest share in 2024, of 40%. The leading software vendors in the continent offer a range of customer engagement solutions for companies to timely address the concerns of end customers. These solutions offer metrics and actionable insights, which help in improving the overall experience of customers, which, in turn, increases brand loyalty and decreases the churn rate.
In North America, the U.S. uses these solutions on a massive scale owing to the rising adoption of big data for insights into customer behavior and preference, to ultimately address their concerns quickly and accurately.
APAC is the fastest-growing market, with an expected CAGR of 12.5%, during the forecast period. The region is a hub for the healthcare, IT & telecom, and energy and utility sectors due to the increasing use of emerging technologies, such as machine learning and industrial automation, itself due to the major shift of businesses toward digital transformation.
Companies in these industries have huge customer bases, and these digital trends are influencing the adoption of customer engagement solutions. For instance, ServiceNow has launched the Now Platform, which facilitates the scale-up of automation and app development processes across enterprises. It facilitates digital platforms for seamless customer and employee interaction enabling workflow solutions efficiently.
The market is broken down into these regions and countries:
The market is fragmented on account of the existence of a large number of IT corporation with a huge portfolio of standard and customizable customer engagement solutions. Developing IT solutions does not require as much capital as machinery or other physical objects, which allows even small-scale vendors and startups to make brisk business. Additionally, while large companies often work with major IT vendors, SMEs and local business often tap merging IT firms for these solutions. Further, no single company leads the market for all end uses and customer engagement platforms, which results in the fragmentation.
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