Six Thoughts On the Talkdesk Analyst Summit

Recently, Talkdesk held its first analyst summit in a few years. During the event, the analysts got a deep dive into the company’s strategy, opportunities, and roadmap. Overall, it was a positive experience; it solidified some of my thoughts about the company and made me reconsider others. Below are six of the key thoughts I had coming out of the event.

AI Is Everywhere in CX, So Vendors Need to Differentiate.

As expected, the analysts got a heavy dose of AI at the event. In fact, when CMO Neville Letzerich presented to the group, he showed a slide that stated Talkdesk wants to be perceived as the “Most innovative company in the space with AI at the heart of everything we do.” While that’s a bold statement, every CX vendor would try to make that claim, and when one looks at the list of “AI services” offered by the contact centers, most have the same core offerings – virtual agents, agent assist, AI generate notes CSAT, etc.

When asked about differentiation, most vendors will claim, “Ours is better,” which is likely true for specific use cases, but highlighting those is essential. The best way to show those differences is through customer stories, as the benefits of those capabilities can be quantified.

On a related note, Talkdesk has a few unique AI features. The first is Talkdesk Navigator, which uses AI to route calls to the best virtual or human agent. No training is required, and the setup and decision trees are automated. The second is Mood Insights, which uses AI to capture the “mood” of the customer by analyzing sentiment, tone, and several other factors. Differentiated features only last a short time, so it would be good to see Talkdesk highlight use cases while they are unique to them.

The Vertical Industry Focus Enables Talkdesk to Punch Above Its Weight.

Talkdesk is a relatively small CCaaS provider in a crowded marketplace. Because it is privately held, it receives a different media focus than a publicly traded company. This could cause Talkdesk some go-to-market challenges, as larger vendors can drown it out. To combat this, the company is not trying to be all things to all people. Instead, it focuses on the following verticals: financial services, healthcare, retail, government, and transportation/hospitality. Former CMO Kathie Johnson initiated this go-to-market motion; Johnson came from Salesforce, which has long used industry specialization to differentiate itself in a crowded CRM market.

During his presentation to analysts, Letzerich outlined how Talkdesk is executing on the verticals targeting: the company hires people from the industries to run the practice areas, partners with the leading vendors in those verticals, and attends trade shows to showcase innovative solutions.

Talkdesk Has Found New Ways to Deliver Its Product.

There wasn’t much “news” from the event, although the new product generally isn’t the focus of analyst events, but the two press releases announced over the three days had the same theme – make it easier for Talkdesk to deliver its capabilities to a broader audience.

Talkdesk Embedded is a set of low-code/no-code tools that enable companies, ISVs, and others to “embed” Talkdesk capabilities into applications. For example, a financial services company could embed Talkdesk Conversations into ServiceNow or Oracle. This initiative will help the company with its industry focus and make inserting Talkdesk capabilities into workflows easier.

The other news item was Windstream Enterprise’s announcement that it will utilize the newly released Talkdesk Express as its contact center solution for SMBs. Talkdesk Express is a purpose-built CCaaS product for the small—to midsize market that includes omnichannel communications, IVR, analytics, self-service tools, and more. Telcos, such as Windstream, are often the vendor for SMBs’ communications needs, as the product’s sale can be tied to connectivity.

TalkDesk Is Betting Customers Will Eventually Prefer Virtual Agents.

The rise of agentic AI is creating virtual agent experiences that are virtually indistinguishable from humans. The only distinction is that one never needs to wait on hold to talk to the virtual agent. At the analyst summit, Talkdesk showed a demo similar to what Webex did at WebexOne. In this demo, a person could speak to a virtual agent, interrupt it, or change the flow of questions, and the virtual agent would not miss a beat.

I’ve asked some contact center managers if they foresee a day when the virtual agent will be preferred over a human, and most have said no. However, this was said in the early days of online banking and mobile check deposits. I recall many industry experts proclaiming that because of trust, people would always prefer to have money interactions handled by others. We know this is not true, as online banking dominates people-centric interactions.

Virtual agents are always available and will have faster access to more accurate information for most simple use cases. I predict that within two years, the industry will start to see a shift where not having virtual agents will become a competitive disadvantage.

Nobody Owns CX End-to-End And This Is a Business Challenge.

The contact center industry has made a difficult pivot to CX. The problem is that so have sales and marketing vendors, providers of web analytic tools, and anyone else involved in the customer journey. In reality, CX encompasses everything from the first click on a website to product retirement, but each step along this journey requires a different set of vendors and tools.

The challenge is that everyone from Talkdesk to Sprinkler to Adobe to Content Square is in the CX space, each with their own set of analytics and insights. The reality is no one owns the end-to-end CX, and that’s a problem for customers as the insights provided from a sales and market perspective may be at odds with what the service is showing. This was brought up as a point of conversation in one of the analyst roundtables. While every vendor can have end-to-end CX as the vision as to what they would like to deliver, today, there isn’t a solution. Given the complexity of gathering data across the customer journey, one isn’t likely soon. Vendors in the CX ecosystem should provide clarity as to where they can deliver value.

AI Will Displace Agents But Give Rise to New Revenue Opportunities.

There are few tech markets on which Wall Street analysts are more bearish than CCaaS. The reason is that when experts are asked about the impact of AI, one of the top use cases is to replace agents. Typically, when I ask the business leaders at the CCaaS companies whether AI will cannibalize agents, I get non-committal answers where the speakers try and explain how this might not happen.

I’ll give Talkdesk CEO Tiago Pavia props for addressing my question head-on. He believes the number of agents will decline, but the growth in revenue from AI and digital tools should be greater than the revenue loss from the reduced number of agents. I believe the AI opportunity will significantly overtake the revenue loss from agent seat compression, as a great virtual experience will create a stellar experience that will make people more inclined to reach out to brands.

An interesting byproduct of this is that the revenue model from CCaaS will shift from a per seat model to a consumption-based model and bring in factors like seasonality. For example, one would expect a retailer to see a spike in usage between Thanksgiving and Christmas, or an accounting firm would see a usage surge at tax time. The CCaaS vendors have not had to deal with these factors, but will now come into play.

Overall, it was a good event for Talkdesk. The company ended the event by calling itself, what everyone does, the most innovative AI company in CX. It’s too early to call an AI leader in this industry, and it will be interesting to watch which vendors can deliver capabilities that companies can use and see a positive outcome with. It was a solid event, but there was more to come.