February 9

CCaaS providers experiencing customer exits with ‘COVID contracts’ expiring

We are one month into 2024 and many CCaaS providers are seeing customer exits with their standard 3-year contracts ending with the dawn of the new year.

With the COVID-19 pandemic resulting in an unprecedented business landscape where businesses had to either rush or formulate completely new transformation plans, CCaaS vendors saw a huge boom in their numbers.

However, recent research from Metrigy revealed that 48.2% of businesses that use either CCaaS or hosted/ managed cloud dedicated servers are either planning to change or are already shifting to new providers in 2024.

What’s causing the shift?

A fairly obvious reason for this is the shift in business preferences as they gain more experience and knowledge in navigating CCaaS platforms. As organizations get a better understanding of what these platforms can offer, it’s natural for them to want to choose the best provider for their requirements.

Another reason could be the rushed CCaaS migration process, which doesn’t exactly deliver ideal results—in both the long and short terms. Businesses may be looking to shift their operations to a new platform while also establishing a proper migration plan that aligns with their strategic objectives.

However, these do not seem to be the only reasons for businesses to shift their CCaaS operations. Dissatisfaction with their current provider is also a major reason.

Why are businesses dissatisfied with their cloud providers?

There are 3 major reasons for the rising CCaaS dissatisfaction among customers.

Poor support

Ongoing support for CCaaS seems to be dwindling as contract periods near the end, resulting in businesses not being able to shape their CX delivery to match their expectations. CCaaS providers seem to be slacking on the customer support side of things, leading to dissatisfied customers.

Vendor lock-in

Most customers had to enter contracts with calling plans attached, where existing telephone numbers in the system get transferred to the vendor after platform integration. This imposes restrictions on the company and limits flexibility, which has caused them to explore better options.

Rising costs

CCaaS platforms require getting in a certain number of end-users within a set period, and businesses seem to struggle to achieve these numbers. Additionally, vendors are also increasing their prices in line with the conditions presented by the current global economy, which has made businesses rethink contract renewals.

The takeaway…

Ultimately, CCaaS vendors must be aware of the needs and preferences of their customers. While businesses have dealt with the lack of support, vendor lock-in attempts, increasing costs and limited flexibility, they seem to have done so out of necessity.

With the 3-year contracts expiring, businesses are shopping around for better CCaaS options, and vendors better be aware of what they are looking for if they expect to maintain their numbers and grow consistently.

Moreover, most businesses are seeking to normalize operations in the post-pandemic era and strive to resume growth and development efforts including CCaaS Migration initiatives—offering vendors of CCaaS platforms a lucrative opportunity to capitalize via new customer acquisition. 

However, retention is equally as important and should be a key focus for vendors going forward.

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