The industry is being driven by a number of key developments:
Business Process Improvements
Business Process Improvements (BPI) have been important to the sector and are being driven by the shift in end user demands. Companies can no longer offshore their customer service function to an anonymous provider who gives a standard service. Companies need their outsourced customer service function to be tailored to their particular business while ensuring that there are tangible improvements to the speed, cost and quality of service.
Quality customer service
Over the past decade companies have begun to view their outsourced client support provider as a strategic partner that aids them in executing their strategic vision, and as a brand ambassador.
Quality customer service does not only include customer interactions over the phone but integration across all channels. As multi-channel sources of customer interaction have improved, this has driven growth in these alternative areas.
A report from Aberdeen Group suggests that contact channels other than phone for customer service now account for more than 30% of interaction with customers. It also reports that businesses which have been using these alternative channels are recording more than double year-on-year improvements in customer satisfaction. This is a large contributor to the growth in the live and social media customer care sector and gives end customers a faster and better experience.
Due to the increase in service quality, there has been a parallel rise in demand for talent. End users are increasingly expecting service agents to speak their native language and have specialist expertise in their area. Customer support service providers which have multilingual agents, and those with expertise in their field, hold a competitive advantage in the market. Industry players are focusing on ensuring customer loyalty and retention in order to sustain profit margins.
Providers which concentrate on a particular industry are well placed to deliver a quality, differentiated service. Such specialisation results in better alignment with service providers and their brand, and higher levels of service to end users.
Specialist service providers are also better placed to deal with common challenges faced by their clients trying to deliver faster solutions and better quality end user engagements.
Vendors which don’t have the required industry expertise face a number of risks. If a service provider does not know their market or the common challenges their customers face, there is the risk of the end user being dissatisfied resulting in lost time, money and brand goodwill.
There can be pressure on providers due to rising costs and tighter margins such as from higher wage costs or inflation. However, these margin pressures can be offset by revenue growth achieved by delivering high quality and differentiated services.
For instance, in the UK there has been a sustained period of employment growth in the business services sector, indicating a significant skills shortage. The Brexit vote, coupled with the growing global mobilisation of workers, means that UK companies in particular will come under pressure regards employee costs. Competition for talent will also contribute to further wage pressures. Cost control measures and economies of scale through acquisition can help companies mitigate these cost risks.