Many publicly listed technology stocks have been having a torrid time of late as investors move away from lofty visions and future promises of growth to a focus on the fundamentals of revenues and profits.
The same dynamics are playing out in the minds of CFOs as they make choices about their investment priorities over the coming year. In a recent survey, Gartner found that despite the economic pressures facing many organizations, “only 7% of CFOs plan to decrease customer service spending over the next 12 months,” with 21% planning to increase their spending and 72% planning to maintain spending.
The survey also found that nearly all CFOs will prioritize investments in technologies that either enhance current revenue streams or help reduce costs.
It also looks like a bunch of VCs in the service and experience space got the same memo and are doubling down on investments that can help enhance revenue, reduce costs or both.
For example, Invoca, a leading AI-powered call tracking and analytics platform that helps provide marketers and revenue teams with campaign attribution and actionable data from inbound phone calls, has helped clients like DirectTV achieve a 110% Improvement in sales agent close rates while also decreasing their cost per acquisition.
On the back of successes like these, earlier this year, they raised $83m at a $1 billion valuation, which was 4X higher than their last round in 2019. This valuation has been propelled by the business surpassing $100M in run-rate revenue and the strength of its long-term fundamentals.
Their fundraising success is no surprise to Gregg Johnson, CEO of Invoca, who says, “There has been an obvious market shift from pure growth focus to the balance of growth and profitability. At Invoca, we’ve always been focused on the latter while ensuring ongoing product innovation and customer success. We’ve always taken a disciplined approach to growth and built long-term trust with our investors. When we approached our financing earlier this year, these factors were critical because today’s investors have a critical eye on verified business fundamentals and long-term market potential. They’re returning to strong, steady and proven companies.”
Meanwhile, in the managing costs and improving efficiency space, ASAPP, the artificial intelligence research-driven company, is building products to help people in contact centers deliver better experiences and handle more customer engagement volume in less time while also allowing consumers to enjoy faster resolution to their needs. Last year they raised $120m at a $1.6b valuation. This valuation came about on the back of 100%+ YoY growth, the addition of large customers like American Airlines, JetBlue, and EY to their portfolio and some impressive client results.
For example, one Fortune 500 client achieved an 86% increase in agent productivity, while two Fortune 100 clients achieved a 52% reduction in cost per interaction and a 138% increase in first contact resolution, respectively.
Gustavo Sapoznik, founder and CEO of ASAPP, explains their success:” Enterprises have historically had to deal with a difficult trade-off, spend a lot to deliver a high-touch customer experience, or aggressively save costs at the expense of customer satisfaction. For the first time, we can do both at the same time — AI technology that augments agents and empowers them to be more productive, empathetic, and effective while delivering massive cost savings and delighting customers.”
So, while it’s becoming clear what is front of mind for investors, CFOs and VCs, some in the industry are starting to suggest that the contact center is going to be the next big tech frontier.
Will it be? Could it be?
What is clear is that smart organizations are focusing their investments on technologies that can help enhance revenue and save costs, particularly in the customer service and experience space. That makes sense, given the uncertain economic conditions that we are facing.
However, what is also clear is that the smartest companies are going further. They are thinking much longer term as they realize the potential and opportunity offered by the contact center. This comes into sharp focus when you consider the level of contact customer service reps have with customers, how much data the contact center is sitting on and what could be done with those two things.
Next big tech frontier? Who knows?
Next big data, insight and engagement frontier? Perhaps.