Strategy #3 and #4 are right-nows
I have a lot of stamina and I have a lot of resilience.
Well, uncertain times call for certain decisions.
The lockdown March 24th felt like a hammer falling on your face.
The BPO industry which employs millions in India and another million-plus in Africa and Southeast Asia is looking at a repeat of the 2008 recession.
Were we prepared?
Should we react? No.
Let us respond.
Some obvious decisions for BPO companies will be to
- looking at pay cuts for senior management,
- layoffs at the lower levels
- Negotiating with their vendors
- Negotiating with their clients
- Pushing automation and innovation to the forefront
- Right size their entire companies
What’s happening now
- Most companies weren’t prepared for Work From Home strategy because in India the lockdown came abruptly thus giving little time for CEOs and CIOs to devise a strategy for remote working
- Client contracts have to be still honored, hence increasing their staff more than 50% thus increasing the risk of not following social distancing
- Domestic clients are seeing a cut in back-office operations since the front office isn’t functioning to its capacity
- Overseas clients, especially the US is seeing a surge in COVID cases, businesses are shutting down, thus impacting their offshore BPO partners
- Companies relying on Western Europe, Australian clients are also affected
Post lockdown, survival tactics
Take an assessment with your existing clients
I am hoping that all leaders are talking to their clients, going the extra mile to support them during this crisis. Post lockdown, ask your clients, how they are doing, and their business. Based on the current scenario, how much percentage will be outsourced and the corresponding budgets.
Can you pick up more volume of the same tasks or more of some other tasks?
Remote working and BCP should be part of your service offering
These scenarios — be it the subprime or the coronavirus will continue to visit us in the future. There could be wars, acts of God like floods, rains, drought, who knows what.
BCP (business continuity planning) and remote working should become the “new normal”.
Always have additional sites (locations) with failover which can take up work with minimum downtime.
So if you are in Mumbai, the best bet is to already have a small center in maybe Karnataka which can act as your BCP.
BPO centers in Karnataka should follow the same.
Have a survey done with your employees — how many have a broadband connection or mobile wifi hotspots.
So when the time comes to do work from home (WFH) we are not scratching our heads trying to figure out what to do.
Our BPO center at Ratnagiri was able to transport desktops to BPO operators’ homes which had a space to keep a desktop and had a broadband connection.
The toughest and the cheapest will survive
During an economic downturn, the tables turn and it suddenly becomes a buyer’s market vs. a seller’s.
Your customers, potential leads, and future customers now have so many options because the demand has suddenly shrunk in comparison to supply.
It creates a dog-eat-dog world where your customers will only evaluate you on a few conditions — — can you deliver and are you cheap?
This is the worst phase in an economic cycle, where the only way to do business is by what I call is “dropping your pants”
It is a sort of economic blackmail.
BPO companies who are agile, have the best middle management, robust BCP and remote working along with “dropping the pants” pricing, shall win.
My prediction of new rainbow zones
#1. Subcontracting will increase
2 big fronts will open up. large companies working for domestic clients will be under pressure to cut costs or renegotiate.
For example, a large 5000 seater BPO company in Mumbai is servicing a large India-Top 10 bank, their existing rates will be asked to cut down to 30%.
The large BPO company has 2 choices, either take the hit and continue delivering or look for subcontractors in cheaper locations.
If you have a BPO center in Tier 2 or Tier 3 city, this is your chance to approach the large BPO company and get a piece of the cake.
It is a win-win since you get to work on a premium account and the larger BPO company gets to cut costs and demonstrate value.
Based on my discussions, there are banks that pay to the tune of Rs 60000 per seat in Bangalore, for collections and other activities.
These activities can easily be done by a Tier 2 or Tier 3 BPO at Rs 25000 per seat provided they have the right infrastructure and people.
This is a more than 100% savings for the bank.
#2. Healthcare sector back office will grow
This is a double bubble — it is an economic downturn created by a health pandemic.
So that means, both the Financial sector and the Healthcare sector will be affected however at the same time, both of them would need strong revival strategies.
When I write, health tech, it covers
- insurance tech,
- pharma tech,
- medical equipment manufacturers
- Doctors appointment
- Hospital management
- Insurance claims management
Just look into their websites, and if they don’t have a website, use just dials or google business to find their phone numbers.
They would need BPO support for data entry, filing claims, making follow up calls, collecting payments, onboarding vendors, getting new clients, collecting applications from the ground.
If you don’t have a healthcare strategy, you should start making one right now.
#3. Fintech sector will pick up
Lockdown means, no one is applying for loans, credit cards, home loans.
Any sort of borrowing or lending activity has come to a standstill.
Even though the financial services sector is badly hit and the full force of this brutal impact will reveal itself in the coming months, this sector needs BPO companies to support its revival and growth.
During an economic boom, BPO / Call centers are “Revenue centers” however during an economic slowdown position your BPO as their “cost saver”.
For every transaction, if you can bring the unit price down, it directly impacts the bottom line of the bank.
Remember, if you have been that strong partner during tough times, they will come knocking during the boom times as well.
- Deploy a percentage of your inbound customer service into a customer acquisition team
- Cold call and do outreach campaigns for their products
- Increase the efficiency of your bottom of the pyramid tasks such as scanning, indexing and digitizing, so that you don’t deploy any unnecessary staffing
- Insurance aggregators like companies policybazaar and insurancedekho
- Insurance tech startups like Acko and Digit
- Loan aggregators like paisa bazaar, Wishfin, Phone par loan
- Co-operative banks
- NBFCs like Bajaj Finserv, Muthoot finance
These are the companies that would be 1. Renegotiating with their existing vendors or 2. looking out for cheaper vendors.
Be a fast mover and show up in front of them.
#4. Growth stage startups will embrace more outsourcing
Startups are in a tricky position, some will die away and some will try to consolidate and get back on their feet.
Business standard says that India saw a 28% rise in VC investments due to a tune of $48bn. Read here
This money is there in the system and by the rule of the thumb, if 5% of this money is to be spent on process optimization and revenue increase by engaging call centers and BPO companies, it is a whopping $2,4bn
Do you have what it takes to attack this pie?
There is never a lack of money in any economy, what lacks is ingenuity and creativity.
Find startups that are well funded in
- VC Circle, Inc 42,
- Economic Times
Startups want to focus on their core activity and would want to ideally offload all their noncore tasks to BPO and call centers.
Analyzing a startup is relatively easy looking at the nature of their offerings and customer segments.
For example, if you find in the news in March that Finatech.com raised $8mn from ABC ventures, it’s time to approach them with your offerings.
Some easy pickings would be
- Customer service
- Email and chat support
- Data processing
- Website support
- Vendor onboarding
Finding decision makers in well-funded startups is relatively easy since most of them are on LinkedIn.
Most decision-makers in such companies are CEO, CFO, Advisors, Mentors and you may approach the VC firms as well for collective decision making.
If you want to learn exact LinkedIn strategies to grow your business and get new b2b clients, take my free ebook here.
#6. Automation and innovation will rule
If you have been thinking of putting off your automation strategies, this is the time to invest more.
Any intervention that can increase efficiency, decrease costs, time, and increase bottom line should be part of your offering.
You don’t have to be a Big-4 consulting firm to implement automation strategies.
There are many freelance developers who can be hired and consultants engaged to find out inefficiencies in your processes that can be optimized.
If you can retain the same volume from the client, give them a 20% discount and increase the turn around time of your projects, it’s a wow factor straight away.
Such projects do take time, hence don’t wait to dig the well, when you are thirsty, start digging now.
#7 Value bomb strategy
Never stop marketing and never stop adding value
I have written a detailed piece of 9 life raft strategies. Please read here
Go the distance to be seen by your existing and new customers.
- Be on Linkedin,
- have a blog,
- record videos,
- record testimonials
These don’t cost money, they only cost your time and creativity.
Do it diligently, each day to grow.
When times are tough, spend more on marketing because the one that is visible during lean times, get to survive and rule
Look back into your existing contracts and find out where you can do more — deliver more in operations, training, free upgrades, and billing differences.
The BPO industry thrives as a back office to so many industries. During an economic slowdown, my strong recommendation is to go for Strategy # 5 and # 6 because they are low hanging and easy to implement.
During such times, it is ill-advised to venture into new territories like manufacturing, pharma, or entertainment. You will suffer because of the long sales cycles and high barriers.
Make use of some of the silver linings and rock your BPO!