Many publicly traded technology stocks have had a hot period of late, as investors turn away from high-flying visions and promises of future growth and focus on revenue and earnings fundamentals.
The same dynamic is playing out in the minds of CFOs as they make decisions about their investment priorities for the year ahead. In a recent survey, Gartner found that despite the economic pressures many companies are facing, “only 7% of CFOs plan to reduce customer service spending over the next 12 months,” with 21% planning to increase their spending and 72% plan to maintain spending.
The survey also found that almost all CFOs are prioritizing investments in technologies that either improve current revenue streams or help reduce costs.
It also looks like a number of VCs in the service and experience space have received the same memo, doubling down on investments that can help increase revenue, reduce costs, or both.
For example, Invoca, a leading AI-powered call tracking and analytics platform that helps marketers and sales teams provide campaign attribution and actionable data from inbound phone calls, has helped clients like DirectTV improve sales rep close rates by 110% while reducing cost per acquisition.
Based on such achievements, they raised $83 million earlier this year at a $1 billion valuation, which was four times higher than the last round in 2019. That valuation was boosted by the company’s $100 million -Dollars in current earnings and earnings exceeded the strength of its long-term fundamentals.
Their fundraising success comes as no surprise to Gregg Johnson, CEO of Invoca, who says, “There has been an apparent market shift from pure growth focus to balancing growth and profitability. At Invoca we have always focused on the latter ensuring continuous product innovation and customer success. We have always taken a disciplined approach to growth and built long-term trust with our investors. As we approached our funding earlier this year, these factors were critical as today’s investors have kept a critical eye on verified business fundamentals and long-term market potential. You will return to strong, stable and proven companies.”
In the area of cost management and efficiency improvement, ASAPP, the research-driven artificial intelligence company, develops products that help people in contact centers deliver better experiences and handle more customer retention volumes in less time, while allowing consumers to enjoy a faster solution too their needs. Last year, they raised $120 million at a $1.6 billion valuation. That rating is driven by over 100% year-over-year growth, additions to its portfolio of large clients like American Airlines, JetBlue, and EY, and some impressive client results.
For example, one Fortune 500 customer achieved an 86% increase in agent productivity, while two Fortune 100 customers 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: “Companies have historically had to deal with a difficult trade-off, spend heavily to deliver a high-touch customer experience, or aggressively cut 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, more empathetic and more effective, while delivering massive cost savings and delighting customers.”
So while it’s becoming clear what investors, CFOs and VCs are thinking, some in the industry are beginning to hint that the contact center will be the next big technological frontier.
Will it be? Could it be?
What is clear is that smart businesses are focusing their investments on technologies that can help increase revenue and save costs, particularly in the areas of customer service and experience. That makes sense given the uncertain economic conditions we face.
But it is also clear that the smartest companies go even further. They think much longer term as they see the potential and opportunities that the contact center offers. This becomes clear when you consider the level of contact that agents have with customers, how much data the contact center uses, and what could be done with those two things.
The next big tech frontier? Who knows?
The next big data, insight and engagement frontier? Maybe.