Industry Commentary

New Revenue Sources Vital to Front-Office BPOs

By April 24, 2019January 10th, 2024No Comments

The need to be on the lookout for sources of new revenue is essential in any line of business.  This is especially the case with firms in mature industries where annual growth is modest.  This is a challenge in the front-office BPO space, where providers are anxious to find alternative sources of demand, in order to offset traditional markets that are slowing.  Alternative markets may be found in new verticals, or even in non-traditional geographies, but in order to remain relevant in the current state of play, outsourcers must do their utmost to diversify revenues and avoid a business-as-usual scenario.

In most developed demand markets, contact center providers are now struggling to grow their respective footprints.  The 2019 Front Office Omnibus Survey of nearly 500 enterprise contact center buyers in North America, Australia, the UK, France and Germany indicates that among existing clients of front-line third-party services, just one-third plan to increase their use of this business model. And among firms not currently using outsourcing, only one-in-ten have plans in the immediate future to use a contact center partner.  Clearly, providers need to find a way in which they can sustain and grow existing contracts, while at the same time appeal to firms that have not yet taken up third-party delivery.  Fortunately, for front-office BPOs, there are options on the table.

Perhaps the best opportunity within existing demand markets is to source new revenue from prospective clients within industries that have not been traditional users of contact center services.  Many contact center service players are locating potential leads by scoping burgeoning elements of the hospitality industry, new e-commerce start-ups, as well as mid-sized financial services organizations that are finding running their own contact centers cumbersome.  Also, newer sectors in the broader economy spell an opportunity.  Consider the rapidly expanding born-digital sector, which plays heavily on helping match vendors with prospective clients (holiday rentals or ride-sharing are but two examples). This sector is full of companies that are growing quickly, and which require immediate assistance to interact with their consumer base.  Anecdotal evidence suggests that many of these are firms are finding the customer experience delivery elements among their biggest challenges, and are more willing to look at alternatives outside of running their own CRM operations.

Outsourcers would also be prudent to look toward emerging consumer markets for new revenue opportunities.  The reality is that North America, Western Europe and Australia / New Zealand are mature, and it will be very tough to move non-users of outsourcing to third-party delivery en masse.  Looking to countries with rapidly developing economies, wherein consumers are taking up more sophisticated products / services that require more complex support, just makes sense.  Admittedly, in the past these locations have been less than fertile, with most domestic outsourcing work having been focused around telco servicing. But to a large degree this is history. As a business model, this has been viable in India, what with the growth of that country’s ever-expanding middle class. It has the same applicability in locations such as Mexico, Chile, Colombia, Egypt, Poland, Malaysia and South Africa, to name a few.  Going after opportunities in such growing centers will yield providers with essential diversification and reduce reliance on the traditional sources of geographic demand, which appear limited in terms of commercial opportunity.