CUSTOMER SUCCESS MANAGEMENT MARKET ANALYSIS

Customer Success Management Market Size and Trends

The Customer Success Management Market is estimated to be valued at USD 2.01 billion in 2024 and is expected to reach USD 7.91 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 21.6% from 2024 to 2031.

Discover market dynamics shaping the industry: Request sample copy

The adoption of customer success management solutions is being driven by the need for organizations to enhance customer retention and lifetime value. With competitive pressures increasing across industries, companies are focusing on implementing customer-centric strategies to better understand customer journeys and pain points. This is contributing to the growing demand for cloud-based customer success platforms that enable personalized engagement, continuous feedback collection, and multi-channel communication functionalities to improve customer experience and maximize spending. Furthermore, the rising trend of subscription-based business models is also augmenting the customer success management market growth as vendors seek to optimize renewals and expand existing customer relationships.

Shifting Focus to Retention over Acquisition

With the increased competition in various industries, businesses are realizing the importance of focusing their efforts on retaining their existing customers rather than always trying to acquire new ones. Customer retention is proving to be more cost-effective compared to the expenses involved in consistently finding new prospects and converting them. Research shows that retaining an existing customer is far cheaper than gaining a new one. Once a customer is lost, the resources and money spent on acquiring that individual is essentially wasted. At the same time, acquiring new customers in saturated and competitive markets has become an uphill task. Therefore, companies are prioritizing keeping their current customers satisfied and engaged through solutions like customer success management. This proactive approach aims to ensure high renewal rates by addressing customers' pain points and continuously delivering value. With strong customer success programs in place, businesses can boost customer lifetime value and reduce churn.

For instance, in June 2022, Salesforce, a leading CRM provider, introduced Customer 360. This platform integrates marketing, commerce, and service data, allowing businesses to connect with customers on a deeper level, automate processes, personalize interactions, and build stronger relationships at scale.

Market Concentration and Competitive Landscape

Get actionable strategies to beat competition: Request sample copy

Need for Continuous Customer Engagement

As the business landscape transforms at a rapid pace with evolving customer needs and technology disruptions, it is no longer sufficient to make a one-time sale and consider the job done. Customers now expect ongoing support, value-add solutions and a personalized experience even after purchasing a product or service. A one-size-fits-all approach will not cater to the unique requirements of each clientele. As a result, the need for continuous engagement with customers has emerged as a key business priority. Customer success management serves this need well through its focus on adopting a consultative, customer-centric mindset, and instituting performance reviews, renewal strategies, and product usage tracking mechanisms. This helps organizations sustain relationships, ensure adoption of new features, and also gain real-time insights into emerging customer pain points. With proactive engagement practices in place, businesses can deliver a top-notch post-sales experience and maximize long term customer outcomes and satisfaction levels.

In February 2020, Salesforce acquired Evergage, a personalization and customer data platform provider. This acquisition strengthens Salesforce's Marketing Cloud by adding real-time, cross-channel personalization, and machine learning capabilities. This allows businesses to deliver more relevant customer experiences throughout the entire customer journey.

Key Takeaways from Analyst:

The customer success management market is poised to grow substantially over the next five years. Growing digital transformation across industries and increasing focus on customer retention are the key drivers propelling the adoption of customer success platforms and services. As subscription and usage-based business models become more common, companies are realizing the importance of optimizing customer lifetime value through success programs.

North America currently dominates the customer success management market due to early adoption by technology companies. However, the Asia Pacific region is expected to grow at the fastest pace due to rising digitalization efforts and expanding customer bases of enterprises in countries like China and India. Lack of awareness about the benefits of success programs is a major restraint, especially in developing markets.

Customer success vendors can capitalize on the opportunity to help companies implement success practices and technologies to improve their engagement with customers. There is also scope for automation and predictive analytics capabilities to help derive actionable insights for optimizing the customer journey. Partnerships with complementary vendors in adjacent domains like customer experience and support will allow providers to offer more comprehensive solutions as well. Startups are developing niche offerings to help specific industries or business models as well.

In conclusion, the future outlook for the customer success management market is very positive. However, vendors will need to focus on education and demonstrating tangible benefits to drive broader adoption across regions and industries in the coming years.

Market Challenges: Customer Retention Hurdles in the SaaS Landscape

One of the key challenges in the customer success management market is retaining existing customers. With a proliferation of software as a service options, customers have many choices and may switch providers easily. It is difficult for companies to continue delivering value and identifying customer needs proactively. There is also a lack of standardized metrics and key performance indicators to define success, making it challenging to measure ROI and benchmark performance. High customer churn could negatively impact revenues for vendors.

Market Opportunities: Tailored Solutions for Evolving Customer Journeys

As software and technologies continue to disrupt traditional industries, there is an increased need for managing complex customer journeys and long-term relationships. Vendors can offer customized, data-driven solutions and consultative services to help customers maximize value. With more businesses adopting cloud-based technologies, there is demand for managing the customer lifecycle holistically across sales and post-sales stages. 

Discover high revenue pocket segments and roadmap to it: Request sample copy

Insights, By Component - Software Drives Innovation in Customer Success Management

In terms of Component, the Software segment is estimated to hold the highest share of 63.2% in 2024, owing to its ability to continuously evolve and improve the customer experience. As customer needs and expectations change rapidly in the digital era, software allows vendor solutions to be frequently updated and enhanced through new releases and features. This helps organizations stay responsive to emerging trends while providing a consistent level of personalized support. Leading vendors in this space have recognized that software is key to delivering innovations like predictive analytics, automation of routine tasks, and proactive recommendations. Such advanced capabilities are not possible through traditional manual processes or services alone. Software also enables scaling support to large volumes of customers cost-effectively. Its use of machine learning and big data means organizations can gain deeper insights into individual needs and behaviour patterns across the entirety of their customer base. This powerful data-driven approach is revolutionizing how success is defined and measured. Overall, the software component plays a vital role in helping both vendors and customers successfully navigate the complex digital transformation journey. Its growth will continue surpassing other segments as the demand for agile, customized solutions intensifies in the coming years.

Insights, By Industry Vertical - Healthcare Drives Focus on Customer Success

In terms of Industry Vertical, the Healthcare segment is estimated to hold the highest share of 24.81% in 2024, due to critical needs around retaining patients, improving outcomes, and reducing costs. In this segment perhaps more than any other, success depends upon genuinely understanding individual healthcare journeys and building long-term loyalty through continuous personalized engagement and care. Vendors specifically tailor their solutions here to address compliance requirements and the sheer volume or clinical and operational data involved. Beyond standard capabilities like onboarding, needs assessment and product training, healthcare solutions also focus on vital elements like treatment plan adherence, condition management, appointment scheduling and reminders. This level of integrated support across the entire patient lifecycle helps improve everything from medication usage to preventative care practices. It also allows providers to spot and address issues promptly before they escalate. As healthcare grows increasingly consumer-centric, customer success strategies are proving instrumental in enhancing patient experiences while driving better clinical and financial performance for organizations. Their impact will further increase reliance on such specialized solutions going forward.

Insights, By Application - Customer Experience Drives Customer Success Management Adoption

In terms of Application, the Customer Experience Management segment is estimated to hold the highest share of 38.75% in 2024, due to its central role in the customer success process. A quality experience is now recognized as a key competitive differentiator, with clients expecting seamless, personalized interactions across all touchpoints. However, delivering consistently exemplary service as needs and channels evolve constantly presents various challenges. By utilizing customer success platforms, organizations can gain a complete, unified view of individual profiles and preferences. Strategies can then be tailored appropriately based on individual journey stages, past interactions, stated goals and other attributes on record. Automation of routine communications along with proactive, personalized outreach at the right times further enhances experience. Being able to monitor experience metrics and take corrective action helps identify and resolve pain points in real-time before they impact renewal, expansion or advocacy. Overall, addressing the complete lifecycle of service through an integrated customer experience lens has become essential for cementing long-term, profitable relationships. This application area will thus continue expanding the demand for effective customer success solutions.

Regional Insights

To learn more about this report, Request sample copy

North America has established itself as the dominant region in the customer success management market and is estimated to hold the major market share of 30.91% in 2024. With major tech hubs and startup cultures located across the U.S. and Canada, the region is home to many prominent customer success platforms and tools. Cities like San Francisco, New York, and Toronto have thriving communities of customer success professionals that contribute to thought leadership and drive innovation in the space.

Furthermore, North American enterprises have traditionally placed high importance on customer retention and maximizing lifetime value. This focus on the customer journey beyond the initial sale has translated to greater adoption of formalized customer success programs and enabling technologies. Leading enterprises across industries like software, fintech, and e-commerce have incorporated customer success as a key business function to ensure optimal customer outcomes.

In Asia Pacific, the customer success management market is witnessing explosive growth and is expected to exhibit a CAGR of 26.74% during the forecast period 2024-2031. The region's growing internet and smartphone penetration coupled with rapid digital transformation across industries has created a need for tools that help companies engage effectively with their online customers. Countries like India, Indonesia, and Vietnam are emerging as global outsourcing hubs, fuelling demand for approaches like customer success that focus on customer experience and advocacy.

The startup cultures in major Asian cities of Bangalore, Jakarta, and Ho Chi Minh City have also contributed to increased awareness of customer success best practices. Early-stage companies recognize the importance of maximizing retention to achieve sustainable growth, driving interest in formalizing their approach through dedicated roles and technology stacks. Pricing of customer success tools and platforms in the region tends to be lower than North America to scale adoption among resource-constrained enterprises.

While North America dominates in terms of existing customer success tooling and maturity, the future outlook for Asia Pacific looks promising given secular digital and economic trends. The region is expected to play a leading role in the next phase of customer success innovation and deployment worldwide.

Market Report Scope

Customer Success Management Industry News

• June 2021: Gainsight a customer success management platform, unveiled new features designed to integrate customer success practices across an entire organization, maximizing its overall impact on business performance
• November 2021: Gainsight showcased its focus on innovation by introducing Horizon AI. This feature utilizes Artificial Intelligence to analyze customer data and predict churn risk, enabling businesses to develop data-driven customer success strategies.
• April 2020, HubSpot a software company, launched CMS Hub, a content management system offering speed, security, and scalability for growing businesses. CMS Hub provides two tiers, Enterprise and Professional, allowing companies to choose the solution that best suits their specific needs.

*Definition: The Customer Success Management market provides software and services to help companies improve customer retention and maximize lifetime customer value. It offers tools to track customer health and satisfaction metrics, identify at-risk customers, assign renewal and expansion opportunities to account teams, and facilitate customer onboarding, handover, and success programs to ensure customer success. The overall aim is to help businesses build stronger, longer-lasting customer relationships through continuous feedback and support.

Market Segmentation

• Component Insights (Revenue, USD Bn, 2019 - 2031)
  • Software
  • Services
  • Professional Services
  • Consulting
  • System Integration and Implementation
  • Support and Maintenance
  • Managed Services
•  Industry Vertical Insights (Revenue, USD Bn, 2019 - 2031)
  • Healthcare
  • Retail
  • BFSI
  • IT and Telecommunications
  • Government
  • Other
•  Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Sales and Marketing Management
  • Customer Experience Management
  • Risk and Compliance Management
  • Other Applications
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • South Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Armatic Technologies Inc.
  • Avaya Holdings Corp.
  • ClientSuccess Inc.
  • CustomerSuccessBox
  • Freshworks Inc.
  • Gainsight Inc.
  • IBM Corporation
  • Medallia Inc.
  • Open Text Corporation
  • Oracle Corporation
  • Planhat AB
  • Salesforce.com Inc.
  • SAP SE
  • Sitecore
  • Tech Mahindra Limited
  • Totango
  • UserIQ Inc.
  • Verint Systems Inc.