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Qualtrics kept the customer experience management software engine cooking this week with its $1.125 billion acquisition of omnichannel conversational analytics provider Clarabridge. Qualtrics provides customer experience and employee experience software.
The Thursday news comes in the same week that Thoma Bravo acquired Qualtrics competitor Medallia for $6.4 billion. And it’s about a month after Sprinklr, another customer experience management (CXM) provider, went public. And, lest we forget, the ink was barely dry on Qualtric’s acquisition of Usermind (July 20) when Qualtrics released the Clarabridge news. Qualtrics has doubled its number of acquisitions in two weeks.
The Customer Experience Management Market Is Huge
The tale of the tape after the dust settles this week? You’ve got some pretty heavy hitters in the CXM software space with Qualtrics sitting at the top in terms of market cap (more than $20 billion) and Medallia ($5.38 billion) and Sprinklr ($4.6 billion) behind. Gartner in its Magic Quadrant for Voice of the Customer in 2020 had Qualtrics and Medallia positioned as the top two leaders with fellow leaders InMoment and Confirmit trailing behind. Forrester in its Wave for Employee Experience Management Platforms For Large Enterprise in 2020 saw Qualtrics, Confirmit, Medallia and MaritzCX (since acquired by InMoment) as the leaders, in that order.
The global customer experience management market size is expected to reach $27.12 billion by 2028, registering a CAGR of 17.5% from 2021 to 2028, according to ResearchAndMarkets.com.
It’s simply because brands and consumers want quality digital customer experiences. The overwhelming majority of respondents — 80% — indicated that digital customer experience (DCX) was either “Extremely important” (34%) or “Very important” (46%) to their organization in the State of Digital Customer Experience 2021 Report by CMSWire.
“The most successful consumer-facing digital experiences have set high standards that now even the traditionally non-digital brands must live up to,” Brice Dunwoodie, founder and CEO of Simpler Media Group, parent company of CMSWire, wrote in his executive summary for the report. “Strong Digital Customer Experience (DCX) is expected by clients across the board and the events of 2020 have pushed this reality even further.”
Understanding consumer behavior and their preferences is driving various organizations and brands to adopt customer experience strategies for providing the best service performance in real-time, according to researchers at ResearchAndMarkets.com. “Moreover, the growing use of digital channels by consumers to communicate with brands and organizations is expected to boost market growth over the coming years,” researchers found. “Furthermore, the companies can become better differentiators by implementing customer experience management (CEM) solutions, which are perceived to be significant in the current competitive environment.”
Related Article: What Does the Qualtrics $14 Billion IPO Mean for the CX Market?
Why Clarabridge?
Qualtrics, which provides voice of the customer (VoC) and CXM software, announced its plans for an intended $14 billion IPO at the end of last year. SAP, which acquired Qualtrics in 2018, announced Qualtric’s IPO intentions five months earlier. Qualtrics, meanwhile, has been operating as an independent entity under SAP’s wing since the $8 billion acquisition.
Qualtrics has made four acquisitions in total, including two in the past two weeks. The other two came in 2018 (Delighted, CX measurement and ratings) and 2016 (Statwing, web-based statistical analysis).
Why Clarabridge? Clarabridge’s AI-powered platform allows companies to capture and analyze customer feedback from indirect sources such as social media, emails, support calls, chats and product reviews. Company officials say the combined technologies will create a CX software suite that will enable users to tune into, analyze and act on everything customers and employees are saying, wherever they’re saying it.
“Clarabridge’s ability to help companies discover what their customers are saying about them across unstructured sources and provide meaningful, actionable insights is a perfect complement to the Qualtrics platform,” Clarabridge CEO Mark Bishof said.
Clarabridge’s conversational analytics capabilities analyze indirect customer feedback — captured from unstructured sources including social media, emails, support calls, chats and product reviews. Gartner classifies Clarabridge as a social analytics applications provider alongside vendors such as Ground Signal and Luminoso Technologies in its June 2020 Market Guide for Voice of the Employee Solutions. Clarabridge was one of the 12 significant providers of the Forrester Wave for Customer Feedback Management Platforms alongside Qualtrics in May of 2021.
