Facebook’s reported $1 billion acquisition of digital customer service technology provider Kustomer marks another acknowledgement that texts, instant messages and asynchronous conversations own a big slice of the customer service digital interaction world. It also allows Facebook to expand on the 175 million businesses who already engage with customers on WhatsApp and offers those businesses capabilities from an omnichannel CRM platform.
Forget about a CRM battle, though.This isn’t about the social media giant diving head-first into the CRM space and competing with Salesforce, Microsoft, Oracle and SAP. And, BTW, will Facebook even be that “giant” for much longer? The U.S. Government doesn’t think it should be.
“We’ll continue to support the numerous options that businesses have to integrate their CRM platform of choice with our messaging services,” Facebook’s Dan Levy, VP of Ads and Business Products, and Matt Idema, COO of WhatsApp, said in a Nov. 30 blog post. “We want businesses of all sizes and across all industries to discover the value of messaging — and having a vibrant partner ecosystem is critical in providing our customers with choices.”
Asynchronous Messaging, Customer Data Targeting
Facebook is making two bets through its acquisition of Kustomer, according to Kate Leggett, vice president and principal analyst for Forrester. It's betting on asynchronous messaging as a primary communication channel. And they’re also continuing efforts to provide better customer data for better customer targeting.
“Customers can use the Kustomer platform for customer service but now that is part of Facebook with all the data exhaust the customer generates through their conversations,” Leggett told CMSWire. “Now that is all within the Facebook family and they can roll out all that data and better target customers. I think that’s where the money is.”
Facebook said in the blog post on the news: "While Facebook will not automatically use Kustomer data to inform the ads that a user sees, businesses will have the option to use their data at Kustomer for their own marketing purposes, which may include separate advertising services on Facebook."
Kustomer is what Leggett and Forrester refers to as a “digital-first customer service solution.” It led in a Forrester Wave on the vendor landscape published in April. Kustomer, Leggett reported, supports automated and agent-assisted digital engagement over synchronous and asynchronous channels. “These solutions have seen increased adoption since the pandemic as customers looked for easier ways to connect and avoid the frustratingly long wait times for calls,” Leggett wrote in a Dec. 3 blog post. “They’re also easy to deploy, allowing companies to add automated and digital channels to their customer service operations.”
Related Article: Is Messaging the Final Frontier in Customer Service?
Can Facebook Win in Customer Service?
Joseph Ansanelli, CEO and co-founder of Gladly, a customer service platform that partners with Facebook, isn’t convinced how the social media player will do inside the customer-service arena.
“To be honest, most technology acquisitions fail,” he said, “and it's a bit of a head scratcher how successful an advertising driven, social media company will be in the customer service software business.”
Given 85% of Facebook's revenue comes from selling advertisements, Ansanelli said the acquisition of Kustomer is about supporting their core advertising business.
Learning Opportunities
Webinar
Mar
21
Ready to Level Up Your Learning? Discover Your Learning Maturity Score
Learn how to level up your learning program in this free, interactive workshop
Webinar
Mar
29
The CX Commute vs. the CX Joy Ride
Is your CX traffic holding up your customer's journey?
Webinar
Mar
29
Is Your Microsoft 365 Data Recoverable? How to Survive the IT Hotseat When Data is Lost
See why MIcrosoft recommends third party backup
Webinar
Mar
30
An Optimized Customer Contact Strategy Combines Transparency and Intelligence: The State of Outbound Communications
Learn from the Neustar-commissioned Forrester Consulting study on challenges and solutions for contact centers
Conference
May
10
CMSWire CONNECT Customer Experience Conference - Austin 2023
Don't miss the top customer experience and digital experience conference of the year — live in Austin, Texas May 10-12.
Conference
May
10
Reworked CONNECT Employee Experience & Digital Workplace Conference Austin 2023
North America's best employee experience and digital workplace conference of the year — live in Austin May 10-12, 2023.
“It's not about providing a world-class, people-centered customer service platform that meets customers on any and all communications channels,” Ansanelli said. “Their goal is to ensure consumers use Facebook's messaging platforms over other choices like SMS and to support their push into ecommerce with Instagram stores by providing their own tools to manage customer communications.”
Facebook also intends to later offer services that will leverage the treasure trove of customer data in the support platform such as a consumer's complete line level order history and conversation history to use in various advertising and promotional targeting, according to Ansanelli. “And the more data they have on consumers, the more advertising they can sell,” he said.
How Digital Customer Service Space Shapes Up
What are some of the capabilities that Kustomer and others in the space offer? No, they’re not competing in the CRM space alongside Microsoft, SAP, Oracle and Salesforce. According to the Forrester Wave on Digital-First Customer Service Solutions, these vendors provide capabilities such as:
- Agent collaboration
- Multimodal support
- Journey data
- Native support for digital channels
- Personalized customer experience
- Routing, queuing, and CRM integration
- Channel orchestration
- Knowledge management solutions
- Chatbots
- Business insights
Forrester’s crystal ball in that report was spot-on. It said the market was ripe for acquisitions and noted CRM vendors have already started acquiring companies to make up for a lack of digital companies.
Forrester deems [24]7.ai, Astute, comm100, conversocial, eGain, Glia, Helpshift, Khoros, Kustomer, LivePerson, LogMein, nuance communications and Quiq as the most significant vendors in this space.
Kustomer, it found, excels in organizing interactions around a customer and succeeds with open APIs that connect data from external sources. It does need to evolve its AI, Forrester researchers found in the report.
Related Article: Will Mark Zuckerberg's Facebook Privacy Vision Affect Marketers?
Facebook: Single-Screen View Critical
Facebook blogged Kustomer brings customer conversations from various channels together into a single-screen view and helps businesses automate repetitive tasks. “Facebook plans to support Kustomer’s operations by providing the resources it needs to scale its business, improve and innovate its product offering, and delight its customers,” Levy and Idema wrote.“That way, more people will benefit from customer service that is faster, richer and available whenever and however they need it, whether it’s phone, email, web chat or messaging.”
Leggett called this a great exit strategy for Kustomer since the landscape is a very-crowded one. The space includes a whole set of “digital-first vendors” that offer “lightweight omnichannel capabilities." Kustomer plays in this field, which handles customer interactions that are “fairly limited in scope and can be handled very efficiently over digital channels.”