What is CPaaS
and how can
it improve
your customer
experience strategy?

The quality of customer experience (CX) is critical to good business. A recent survey of senior IT professionals found that 88% consider this an important goal, with 38% expecting top-line revenue growth as a result. Challenges to delivering this included developer shortages, lack of time and legacy technology.

The principal solution identified by the respondents was low-code software-as-a-service platforms, also known as CPaaS. So, what is CPaaS, and what does it stand for? And, more importantly, how can it improve your CX strategy?

CPaas is an acronym for communications platform as a service. According to Gartner,® “CPaaS offers application leaders a cloud-based, multilayered middleware on which they can develop, run and distribute communications software. The platform offers APIs and integrated development environments that simplify the integration of communications capabilities (for example, voice, messaging and video) into applications, services or business processes."¹

This cloud-based communications platform’s potential for growth is significant. In 2020, the global CPaaS market was valued at $4.54 billion; by 2026, it is expected to reach $26.03 billion.

Rather than having to rip and replace existing systems, companies can maximize their existing technology investments and add different real-time communications capabilities to these systems. Traditionally, development teams would have had to build or integrate standalone applications from scratch to make existing systems extensible. However, CPaaS provides a development framework that encompasses application programming interfaces (APIs), pre-built applications and software development kits to accelerate the development process, streamline integrations and enable organizations to customize their communications infrastructure to best meet their unique needs.

Communications platform as a service allows developers to integrate a range of modern features into their organization's communications stack, including outbound voice calls, inbound call routing, web and mobile-based real-time communication, text messaging and multimedia and video messaging.

One key CX challenge is using the right channel for the right customer. One survey of customer preferences found:

• 75% report not being able to reach a business the way they prefer because the business didn't offer that option.
• When unable to use their preferred channel, 96% become frustrated and 48% will go to a competitor.
• When a business provided the communication channel they wanted, 40% made more purchases from the business, 40% recommended the business to others and 30% left a positive review.
• 37% said they responded faster when a business provided the type of communication they wanted.

CPaaS provides a way for companies to deliver services and communicate with customers via multiple channels, without the up-front investment in resources, time and personnel needed to build those tools yourself.

CPaaS can also provide ongoing cost benefits for companies. A cloud-based communications stack is often more cost-effective than managing communications applications on-premise. In a cloud environment, companies spend less time managing their IT resources and can easily upgrade their infrastructure without having to worry about vendor lock-in. Many CPaaS providers also offer volume discounts or a pay-as-you-go consumption-based model, which allows companies to better manage their costs.

Communications platform as a service has a number of great use cases:

• Notification and alert services such as appointment reminders and confirmations, password updates, status updates, such as package delivery.
• Companies can use CPaaS to automate agents' workflow in customer contact centers by deploying conversational AI features that allow agents to communicate with customers across channels—not just via phone. Companies also can use this platform to create self-service tools that allow customers to easily find answers to very basic questions on their own, which can free up call center resources to tackle more complicated customer issues that require high-touch, personalized service.
• Some retailers are also integrating their CRM interfaces with CPaaS, helping to decode customer queries and redirect them to respective departments for clarification.
• The healthcare industry uses CPaaS for appointment scheduling, reminders and follow-ups, prescription services, medication and allergy information and self-service options for verifying insurance plan eligibility and benefits, as well as claims and billing. Video conferencing via CPaaS helped to power the massive rise in telehealth services due to the pandemic—the share of Medicare visits conducted through telehealth in 2020 increased 63-fold, from approximately 840,000 in 2019 to 52.7 million.

It is important to note that communications platform as a service is not the only cloud-based communication platform. A consideration of what CPaaS is best used for wouldn't be complete without comparing it with unified communications as a service (UCaaS). Though CPaaS and UCaaS are both cloud-based communications platforms, they have distinct differences.

UCaaS merges all of an organization's communications applications into a single, unified solution. Rather than using separate tools for voice, video and messaging, companies can use a UCaaS platform to deliver communications capabilities and connect and track devices. It is a solution that can be somewhat customized that allows companies to quickly stand up a modern communications infrastructure and offload ongoing management and maintenance to a service provider.

A CPaaS solution is all about customization. It gives developers a foundation they can use to flexibly build new applications and modernize them in line with changing business requirements—whether it be remote work or deploying virtual chatbots to answer routine customer questions.

Whether an organization chooses to implement CPaaS or UCaaS will likely depend on their need for customization and technology budget.