Q&A with Dino Forte, Founder and Managing Director of outsourced customer contact centre, Ventrica. In this article Dino explains how in the wake of Brexit, how can customer-centric brands capitalise on developing overseas markets.
As an outsourcer what was your first reaction to the Leave result?
As a UK-based outsourcer that provides customer service on behalf of both global and European brands, there was some initial shock and sadness at the decision to exit the EU, especially as we see ourselves as a truly cosmopolitan company with many native language speakers from countries such as France, Germany, Spain and the Netherlands. However, like any good outsourcer we are inherently flexible and it is in our DNA to adapt well to change or uncertainty.
How do you expect it to affect you and the industry generally in the future?
Five months on, the dust is still settling amongst the business community with many adopting a 'wait and see; approach. There's no doubt it has had an impact on the overall confidence of the industry and has certainly played a part in provoking some knee-jerk decisions in the short-term but not to the extent predicted by the pundits. My own feeling is that, regardless of whether we end up with a hard or soft Brexit, retain or lose access to the single market, or indeed grow or contract as an economy over the next 12 months, it's all virgin territory so we have to maintain a â€˜business as usualâ€™ attitude. This is what we've done at Ventrica and it seems to be paying off. By continuing to invest in both new staff and expansion of premises with the opening of our new penthouse contact centre suite, ironically 2016 will be our best year on record in terms of both revenues and growth.
What opportunities do you think it represents for contact centre businesses?
Although people may be divided on whether leaving will be positive or negative, every cloud has a silver lining and one of the obvious advantages at the moment because of the favourable exchange rate for buyers abroad is the appeal of more affordable UK goods and services, especially in regions such as the US and the Far-East. This represents a huge untapped opportunity for GB brands to exploit markets globally and the beauty of todays borderless and around-the-clock e-commerce is that there are no physical barriers. The global on-line marketplace is booming, with over 50% of consumers in the UK, US, Germany, Brazil and Nigeria now preferring to shop online and China ranking highest with 84% with Russia, Japan and South Africa not far behind.
According to research, 'Singles Day' eclipsed Black Friday as the biggest consumer spending event with shoppers parting with 14.3bn on Alibabas Chinese and international marketplaces, revealing the incredible wealth of potential outside of Europe. At the same time, US exports are said to be worth around £36bn annually to the UK economy, making North America our top export partner. Meanwhile we should not overlook markets closer to home as we continue to provide a range of pan-European services for existing clients who can access both English and multi-lingual speakers located at our contact centre in Southend and benefits from the economies of scale associated with centralising customer service rather than replicating and managing across individual countries.
How can organisations take advantage of new markets outside of the EU?
The UK is ideally positioned to service customers from opposite sides of the World and this is partly due to the maturity of our infrastructure, diversity of population and a highly successful services industry. The latter is borne out in figures from the ONS that show that in the last quarter since the referendum, output from services rose by 0.8%.
At the same time, the fall in the pound has meant that exports have risen making UK manufacturers more competitive overseas, both in Europe and beyond. The fact that governments migration statistics, released at the beginning of December revealed that National Insurance number registrations to EU nationals rose to 150,468 in the three months following the UKs vote to leave the EU in June, up from 140,530 in April-June 2016, is also a promising sign. Inward investment by global giants such as Google who recently announced they would build their European HQ in London will also reinforce our ability to woo US brands to our shores.
All these signs reflect what we are already experiencing with our own clients, a desire to centralise and manage ecommerce operations in the UK, with specialist partners offering expertise across a range of functions including customer experience & support, payments and fulfilment.
Can you provide some example of how this is happening in practice?
We work on behalf of many blue chip brands that are exporting, but one such example of a British company that is championing UK suppliers to support their global e-sales is barefoot shoe manufacturer, Vivobarefoot. By appointing three specialist third party providers in the areas of warehousing/logistics, payments and customer service, they have been able to support the development of on-line commerce both in this country and globally.
With everything located in the UK, there is no need to duplicate facilities in individual countries and there is less time and expense in management and training. This model also allows them to easily enter new markets both effortlessly and cost-effectively. By effectively buying British themselves, Vivobarefoot has seen a 90% increase in sales conversion due to the availability of multi-lingual speakers, a 300% increase in overall unit e-sales and the number of pairs of shoes sold on the companys own website and shops will increase from 70,000 this year to 311,000. Part of the companys overall strategy is to grow its e-commerce from 30% to 60% of world-wide sales and with more and more consumers favouring on-line shopping. We also expect to see even greater demand for ecommerce-based customer experience management over the next few years.
The other benefit of centralisation is that brands can provide that all-important consistency in all areas including customer communications. It's also notable that for Vivobarefoot, although they use native language speakers in many countries, in the US, the Americans like to speak with someone with an English accent and it can also help to reflect a brands core values. The key to success is to offer a localised yet centralised service, and because the UK is one of the most advanced ecommerce countries in the world it has the existing skills and expertise to achieve this.
Why are outsourcers well placed to support international growth?
The principal arguments for outsourcing to support overseas expansion are based around flexibility, opex, expertise and access to significant technology, infrastructure and people skills. Many businesses now recognise that it makes sense to focus solely on developing or delivering their main product or service, rather than investing time or money in an area that may not play to their strengths.
Take the area of â€˜customer serviceâ€™ which is increasingly being seen as one of the few ways to differentiate in overcrowded markets. For most businesses the management of â€˜customer serviceâ€™ is not what they necessarily excel at, and setting up an in-house contact centre can be an expensive and time-consuming activity in the form of extra office space, IT and human resources. More fundamentally though it can also represent a distraction from its core business.
The other primary factor to consider is how fast the concept and reality of customer service is evolving, something that cannot be understated with the rise of social, digital and mobile. As Gartner has already predicted by next year 50% of consumer product investments will be redirected to customer experience innovations and 89% of marketers expect customer experience to be their primary differentiator. Forrester is in agreement saying that customer experience (CX) is now the number one competitive differentiator to drive revenue growth.
Keeping up with customer service trends is a full-time job, which is why outsourcing this to a third party that lives and breathes customer management and has invested heavily in the right tools and staff is a practical option for organisations that want to take advantage of both digital transformation and new markets. Both China and US consumers rely hugely on social media and WOM (word of mouth) for influencing purchasing decisions. By using an outsourcer who understands how to create and nurture brand buyers and advocates, exporters can generate the demand they are looking for whilst dedicating sufficient human and capital resources to spend on designing or improving the product or service itself.