Customer Service Software Global Market Report 2024

The customer service software market size has grown rapidly in recent years. It will grow from $7.92 billion in 2023 to $9.48 billion in 2024 at a compound annual growth rate (CAGR) of 19.8%. The growth observed in the historical period can be attributed to the ascent of e-commerce and online businesses, escalating customer expectations, the trend of globalization and expanding business operations, seamless integration with Customer Relationship Management (CRM) systems, and the amplification of complexities in customer inquiries.

The customer service software market size is expected to see rapid growth in the next few years. It will grow to $18.64 billion in 2028 at a compound annual growth rate (CAGR) of 18.4%. Anticipated growth in the forecast period is poised to arise from the escalating adoption of AI and automation, the utilization of data analytics to glean valuable customer insights, a strong focus on delivering omnichannel customer experiences, an emphasis on proactive customer service strategies, and a heightened awareness of cybersecurity considerations.

The escalating significance of customer experience serves as the catalyst propelling the customer service software market. Customer experience encapsulates the holistic perception encompassing a customer's sentiments across all touchpoints with a business or brand. Leveraging customer service software becomes instrumental in elevating these experiences by optimizing communication channels and fortifying customer engagement protocols. Moreover, it enables businesses to adeptly gather customer feedback, empowering them to craft data-informed strategies for enhancing customer experiences. For example, in June 2022, a survey by Verint Systems, a US-based customer engagement solutions company, encompassed over 2,000 respondents aged 18 to 75. The findings revealed that 39 percent of participants were inclined to dissuade their social circles from patronizing a brand due to a negative customer experience, with 64 percent having already severed ties with such companies. A staggering 79 percent of respondents under 45 underscored the pivotal role of a seamless digital experience. This trend underscores how the burgeoning emphasis on customer experience is the driving force behind the progressive expansion of the customer service software market.

The anticipated surge in cloud adoption is poised to be a significant catalyst propelling the expansion of the customer service software market. Cloud adoption denotes the widespread incorporation and utilization of cloud computing services, enabling remote storage, management, and access of data and applications across individuals, organizations, and industries. Businesses are leveraging the migration of customer service software to the cloud, unlocking a plethora of advantages that bolster performance, elevate customer satisfaction, and fuel overall business advancement. For instance, as of December 2021, Eurostat, the statistical office of the European Union (EU), reported a 41% adoption rate of cloud computing among EU enterprises. Particularly noteworthy was the 7-percentage point surge in the retail trade sector compared to 2020. Moreover, the information and communication sector showcased the highest adoption rate, standing at 76%, spotlighting a pronounced upward trajectory in cloud adoption across diverse industries within the European Union. Hence, the escalating embrace of cloud technology is poised to be a driving force behind the expansion of the customer service software market.

Advancements in technology stand out as a prominent trend gaining traction within the customer service software market. Leading companies in this domain are actively introducing sophisticated, technology-driven solutions to fortify their market standing. For instance, in June 2021, Yellow.AI, a US-based enterprise-grade conversational AI platform provider, unveiled innovative voice bots aimed at enhancing consumer experiences. This cutting-edge solution boasts a self-learning NLP (natural language processing) engine alongside advanced voice models spanning over 100 languages, empowering brands to automate and elevate their customer interactions. Notably, it features multichannel voice capabilities, text-to-speech (TTS) functionality supporting diverse emotional tones, and a speech-to-text (STT) engine continually refining its accuracy through iterative learning. Furthermore, it integrates customizable engines equipped with sentiment analysis, intent comprehension, contextual awareness, and seamless human agent transfer capabilities, reinforcing its position as a comprehensive and adaptive customer service tool.

Leading enterprises within the customer service software domain are actively pursuing innovative strategies, particularly in the realm of on-demand software solutions and services. This approach involves delivering adaptable and customizable software offerings that cater to the specific needs of clients. For instance, in September 2023, Valeo, a France-based automotive supplier serving both automakers and the aftermarket, introduced Valeo anSWer. This groundbreaking initiative offers software as both a product and a service, encompassing top-tier applications, middleware, and services tailored for customers. Its comprehensive and scalable nature fulfills the dynamic software requirements within the automotive industry. Emphasizing cutting-edge applications, adaptable middleware, and customized support for OEMs, this initiative aligns closely with the evolving landscape of automotive software needs. Valeo's move holds significant relevance within the customer service software market, as it not only meets but advances the expectations of the automotive sector by delivering superior applications, middleware, and support services, thereby driving the progression of customer service software within this industry.

In February 2022, Meta Platforms Inc., an American multinational technology company, completed the acquisition of Customer Inc. for an undisclosed sum. This strategic move by Meta aimed to leverage Customer Inc.'s capabilities to facilitate businesses in utilizing WhatsApp and Messenger for customer support. The acquisition was intended to streamline and enhance communication experiences for both consumers and businesses. Kustomer, the acquired company, is a US-based provider of diverse customer service software solutions.

Major companies operating in the customer service software market report are Oracle Corporation, SAP SE, Salesforce Inc., Yekaliva.AI, Atlassian Corporation, Atlassian Corporation PLC, Genesys Telecommunications Laboratories Inc., BMC Software Inc., HubSpot Inc., Zendesk Inc., Nuance Communications Inc., Zoho Corporation Pvt. Ltd., Verint Systems Inc., SolarWinds Worldwide LLC, Freshworks Inc., Intercom Inc, Microsoft Corporation, Kayako Infortech Ltd., LiveChat Software Inc., Help Scout PBC, Amphora Inc, Eka Software Solutions, Agile CRM Inc., Quantifi Inc., HappyFox Inc., Quality Unit LLC., FocalScope, PhaseWare Inc., Tracker Software Technologies Ltd, LiveAgent, Hiver Inc., Vivantio Ltd., Habla Inc.

North America was the largest region in the customer service software market in 2023. Asia-Pacific is expected to be the fastest-growing region in the global customer service software market forecast period. The regions covered in the customer service software market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the customer service software market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The customer service software market consists of revenues earned by entities by providing services such as ticket management, communication tools, knowledge management, customer data management, analytics, and reporting services. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included. The customer service software market also includes sales of support & help desk software, shared inbox software, knowledge-based and other software that is used in providing customer services. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.