Keith Dawson's Analyst Perspectives

Customer experience (CX) tools are going through a transition, from piecemeal applications designed to solve narrowly defined problems, to broader suites with integrated functionality. This is occurring along multiple fronts in CX. Software for managing inbound interactions and customer issues is being gathered into CX suites sometimes described as Customer Experience Management (CEM). On the marketing side, the phenomenon is seen in the creation of Digital Experience Platforms (DXPs). In either case, the specific applications to be gathered into a suite is open ended, with little clarity provided by vendors that appear to see the entire CX landscape as a quickly moving target. DXPs, as the name implies, focus on engagement with customers through digital channels, and include an outbound marketing/messaging component. Their primary function is to aggregate tools marketers use to manage content for personalized engagement and the analytics they use to create audiences and optimize campaigns. This puts DXPs in the same general ballpark as CEM, sharing some of the underlying platform elements (data aggregation, support for messaging, analytics) but diverging to appeal to a different user persona (marketers vs. contact centers). It may be useful for buyers to see these two categories as overlapping and highly related. As the CX sector evolves, it is likely that the two forms of suites will become indistinguishable. For the moment, the distinction matters because there are some vendors that are using the DXP designation as a way of signaling to buyers that their suite has marketing bona fides. DXPs have more features related to personalization, identity management and content management than CEM tools, and fewer features related to handling interactions and tracking customer histories. The marketing world views DXPs through the lens of web-content management, the former name for the segment containing experience-related content tools. Numerous vendors brand their offerings “Experience Platforms,” notably conflating content tools with audience creation, web analytics and, more recently, customer-data platforms. These features bring the portfolios very close to what we see in the CX or CEM segment, especially when they come from vendors like Adobe, Oracle or Salesforce that have emphasized feature breadth across departments rather than a narrow, functional approach. It appears that the distinctions that separate DXPs from other forms of CX suites are minimal, and shrinking, and that over time the marketing buyer will expect to find content, analytics, audience and data tools commingled in a platform with some of the customer-facing applications offered by these same vendors. Some of the same products in the DXP space are already considered to be CX or CEM suites as well, blurring the difference considerably. A similar dynamic is taking shape in the market for product information. Product information management (PIM) software is evolving into a form of experience management, as the increase in both the amount of information about products, and the number of people who interact with that data, often introduces new inconsistencies in how products and attributes are combined. DXPs, with their roots in content management, can help ensure that products and services are best represented across marketing and commerce systems. It also ensures that agents have the information they need to answer questions about products as customers explore them. For more information, see the Ventana Research 2021 PIM Value Index. Ventana Research asserts that by 2024, one-half of marketing organizations, especially in large enterprises, will adopt Digital Experience Platforms for orchestrating engagement to achieve desired outcomes. But, as that transition occurs, the need to bridge marketing departments and their service and sales peers will force those DXPs to become even broader to the point where there will not be any functional difference between a DXP and a CX suite, other than branding. These trends matter to buyers because efforts to unsilo customer-related functions within organizations are creating confusion about the specific features people in different roles need. At the platform level, both suites include artificial intelligence (AI) that powers components aimed at multiple use cases (for example, agent assist in the service context, or personalization in the marketing context). There is a definite trend toward unifying customer-facing and customer-adjacent functions under a single CX banner, with centralized accountability and purchasing. In those cases, buyers will likely gravitate toward the unified suites that can plausibly be considered either a DXP or a CEM suite. Buyers that are more specific, that is, purchasing technology solely for marketing usage, will probably focus more on the content-management components and therefore land on a more limited feature set. Buyers looking primarily in that direction should probably explore the options in the content infrastructure first, establishing a set of baseline needs, and then spec those content requirements into the larger universe of CX/DXP/CEM offerings. In many cases, they will be looking at the same vendors and the same product offerings. Interest in DXPs has flourished due to the pandemic. Organizations that had to pivot quickly to digital experiences (especially retailers) have embraced digital transformation projects at an accelerated pace in 2020 and 2021. Whether that continues is unclear. What we do know, however, is that organizations need systems to coordinate customers’ experiences and the processes that drive them. Many of those experiences have a digital component; many do not. But limiting the view of experiences to that favored by the marketer (which are largely web-based) risks creating yet another type of software silo. As noted, the DXP market is divided into vendors with broad CX platforms and Content Management Systems vendors expanding into a broader suite. As vendors load up DXPs with components related to personalization, customer-data management, journey management and customer-lifecycle analytics, vendors with a narrow focus on content will find it hard to compete. And this, in turn, will push the DXP and CX suites so close that they will be virtually indistinguishable. For more analysis in related areas, see our Analyst Perspectives on the changing CX buying community, and on CEM software suites. Regards, Keith Dawson

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