What is Customer Service Software and Why is it Important?

Customer service software enables a business to automate customer self-service processes and augment frontline employees with assistance as they serve customers. In an increasingly commoditized world, customer service is a key—if not the only—differentiator. Per Forrester, a single-point improvement in their CX Index score drives up to $1.2B in annual incremental revenue.

Customer service software ensures that the service is prompt, accurate, consistent, and compliant with regulations, creating wow experiences for customers and frontline employees, adding to topline revenue, and reducing costs to add to the bottom line as well.

What is customer service

Customer service spans the entire lifecycle of the customer engagement process from research to purchase and post-sales support and it can take place within and across many touchpoints and modes. The customer could contact the business at any part of their research-acquire-use journey:


  • Digital channels: Digital self-service such as virtual assistance, secure messaging, SMS and messaging apps, live chat, cobrowse, social, email, in-app support, etc.
  • Brick-and-mortar channels: Retail stores, branch offices, field offices, onsite, etc.


  • Self-service (e.g., on website, in app, IVR, etc.)
  • Human-assisted service (e.g., contact center, branch office, retail)
  • Multimodal (e.g., cobrowsing, combined with concurrent phone call or chat)

Quite often, customer service involves a journey of the customer across multiple touchpoints. The service experience is therefore dependent on how effortless and productive those journeys are.

Customer service software: Supporting the service process

The customer service process consists of three distinct phases:

  • Connect: The business needs to first connect with the customer. Today’s customer is omnichannel and they are also digital-first. The business needs to provide an array of channel options for the customer to interact with them.
  • Solve: Connecting with the customer is only the first step. The business needs to answer the customer’s question, solve their problem, or provide the advice they are seeking. Forward-looking businesses provide proactive service, anticipating future problems and providing advice to customers so they can avoid those issues. This is where knowledge and AI software comes in.
  • Optimize: The next step is to optimize the interactions so that it is efficient and effective for the customer and the business.

Customer service software should help automate and augment all the above stages of the service process.

Customer service software: Building blocks

Customer service software for today’s digital-first, omnichannel world should contain the following components built on a common platform to deliver seamless, contextual, and clued-in customer service:

Conversation hub

It helps the business connect with the customer. The hub approach unifies all customer interaction channels such as messaging, live chat, email, social, cobrowsing, notifications, phone, and in-person in one place, enabling 360-degree context for the customer service agent. It eliminates the need to ask for the “mother’s maiden name” repeatedly as the customer goes from one channel to another!

Knowledge hub

The knowledge hub eliminates inconsistent silos of content and knowhow, creating one trusted hub that delivers correct, consistent, and compliant answers and process expertise in the flow of work . It unifies and orchestrates knowledge and AI building blocks including content management, intent inference, generative AI automation, conversational AI guidance, knowledge analytics, and integrations in one place.

Analytics hub

The analytics hub consolidates operational, knowledge, and customer journey analytics in one place, enabling real-time optimization of contact center operations and improving knowledge performance.

Customer Service Software: Critical Capabilities

AI-infused knowledge management

  • Generative AI to automate content creation and handling queries of low and possibly medium complexity, depending on how well you can train it
  • Knowledge for customers and contact center agents.
  • Compliant, updated, accurate, and consistent answers across channels.
  • For conversational guidance and decision-making.
  • Multiple search methods
  • Multilingual knowledge base to serve a global customer base from the same system


  • Offer your customers digital self-service that goes beyond FAQs and meet-and-greet chatbots
  • Provide relevant, contextual knowledge on your website
  • Offer multiple access methods (including AI guidance) to find the right answer
  • Enable automated assistance through virtual assistants or chatbots. The chatbot should have deep knowledge of your business
  • Provide seamless, context-aware escalation from self-service to assisted channels like email, chat, or voice

Agent-assisted digital channels


  • Support of SMS and messaging apps such as Apple Business Chat, Google Business Messages, WhatsApp, and others
  • Secure messaging and self-service portals
  • Outbound notifications for preemptive and proactive service and contextual offers

Timely intervention through chat, video, click-to-call, cobrowsing

  • Live chat or click to talk assistance at those points in a customer journey where customers are known to get stuck. Timely intervention has been proven to dramatically improve customer experiences and increase sales.
  • Cobrowsing in combination withchat and voice channels where the customer can benefit from personalized handholding, such as during an online insurance onboarding process.

Social and email

  • Social apps such as Facebook, Instagram, and others
  • Email and fax customer service

Contextual offers

  • Business rules and configurable offers for proactive and contextual chat, content, or marketing offers
  • A/B testing for offer optimization


  • Analytics across all digital channels
  • Operational analytics for omnichannel operations
  • Knowledge and AI analytics


An underlying customer engagement platform that is based on an open architecture and includes pre-built connectors to CRM, contact center, and content management systems. The platform is the foundation for the hubs and allows for composable experiences for all stakeholders—customers, agents, other employees, and business managers.

Customer service software: What to look for

  • Is it rich in features out of the box or is it mainly a toolkit requiring you to do extensive programming and customization for best-in-class features?
  • Is it a point product or an unsiloed omnichannel solution?
  • Does it address all phases of the customer engagement process—connect, solve, and optimize with breadth and depth of out-of-the-box capabilities?
  • Can it deliver quick value?
  • Can the vendor show proof of success at scale?
  • Can the vendor bring best practices to the deployment, based on experience in the space?
  • Does it offer risk-free way to pilot free of charge in a production setting and adopt?
  • Is it secure and compliant with industry standards such as PCI, NIST SP 800-53, HIPAA, and FedRAMP?

Customer service software: Best and me-too providers

Customer service software: Types of providers

Broadly, customer service software providers fall in the following categories:

  1. Best-in-class providers
  2. CRM vendors
  3. CCaaS providers
  4. Do-it-all vendors
  5. Point product providers
  6. Toolkit vendors
  7. Brochureware providers

1. Best-in-class providers

These vendors are focused on the customer service space and offer rich out-of-the-box functionality for quick business value. They are also known for their track record of consistent innovation and customer success at scale. Their clients tend to rank high in customer service benchmarks such as the Forrester CX Index, J.D. Power’s CSAT index, and others.

2. CRM vendors

These vendors typically offer software for marketing, sales, and service. They typically come from an SFA background and lack the rich functionality of best-in-class providers, requiring lots of programming and customization to achieve best-in-class functionality.

3. CCaaS providers

Contact Center-as-a-Service providers are mainly focused on the telephony infrastructure required by contact centers. They offer limited or no capabilities in digital customer service and knowledge management and sometimes rely on partners such as eGain to offer those capabilities to their clients.

4. Do-it-all vendors

These vendors are even spread thinner and claim they can do everything well. Typically, they offer shallow functionality in customer service with slow innovation cycles due to lack of focus and also lack deep domain expertise.

5. Point product providers

They are typically startups that have one point product with some bells and whistles. They lack an omnichannel platform and do not offer all the essential building blocks needed for a complete customer service solution. Moreover, they lack domain expertise and financial viability.

6. Toolkit vendors

These are toolkit providers with virtually no packaged applications, requiring IT organizations to build them from scratch. This means long time to value and high TCO (Total Cost of Ownership) for the organization.

7. Brochureware providers

At best, these vendors are likely to OEM some other provider’s product or sometimes simply cut and paste marketing material from true vendors.

The top-rated provider

eGain is the clear leader when it comes to digital-first, knowledge and AI-powered customer service and engagement:

  • Rated #1 in the combined score of digital engagement, knowledge management, and automation capabilities by Gartner
  • Rated #1 in digital-first customer service by Forrester
  • Rated #1 in knowledge management for customer service by Gartner
  • Selected as the Readers’ Choice by KMWorld magazine readers and online community
  • Named to the AI 50 list by KMWorld
  • eGain clients consistently ranked at the top in Forrester CX Index and Newsweek customer service performance index
  • And much more!

eGain clients ranked no 1 in Newsweek's Best Customer Service Companies 2021 List

Leaders trust eGain for customer service

US federal agency saves millions with knowledge guided customer service. The agency oversees healthcare, financial services, and benefits administration for its membership, which is several million strong.
“eGain understood our business and the specific requirements of telecoms customer service. This is critical as we enter the next phase of our eCare strategy, where we plan to introduce innovations such as mobile care and social media services.”
“It is our goal to be the best water company in the UK and to achieve this we need to differentiate ourselves by being the leaders in customer service. We will continue to work with eGain to provide innovative customer service options and further improve customer experience.”
Top insurance company embraces eGain Technology. “eGain has been incredibly flexible and accommodating.”

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