The market for business process outsourcing (BPO) services is enormous. However, the gap in the after-sales segment is also significant. Hardly any of the big BPO providers are able to offer a comprehensive solution for manufacturers of smartphones and consumer IoT devices. These, in turn, rely on smart outsourcing services because few can afford their own after-sales organization.
After-sales service is an essential business process for every manufacturer of connected electronic devices. People who purchase smartphones, wearables, virtual reality headsets, drones and other consumer IoT devices require seamless support throughout the entire life cycle. This includes setup and configuration of a device after purchase, questions about optimal use and quick help if something doesn’t work or needs to be repaired. With the rising number of devices in every household, the desire for a smooth service experience is growing. We’ve mentioned the numbers on our blog before: By 2020, around 6 billion smartphones and another 14 billion consumer IoT devices will be used worldwide. Although manufacturers try to ensure maximum ease of use, our networked world is becoming more complex.
Growing After-Sales Service Demand with Rising IoT Prevalence
This complexity equally affects after-sales service. For equipment manufacturers, this means that it is becoming increasingly challenging to provide users with an excellent customer care experience. But above all, it is becoming more expensive! Customer care is the flagship of every brand, and after-sales service has the key role of nurturing and maintaining this flagship – around the clock, anywhere in the world. Every service interaction with a customer is a moment of truth, and very few customers give a brand a second chance once they’ve been disappointed: As we stated in our last blog post about customer care in 2027, failure is not an option!
But how can a single manufacturer live up to this requirement? Leading mobile brands are represented in more than 100 countries and have annual device sales in the ten- to hundred-million range. Even up-and-coming IoT startups are represented worldwide within just a short period of time. The smartphone and IoT business is a global business, but only few providers can afford an after-sales organization that is able to manage customer care processes globally and monitor KPIs. The tremendous fixed costs for resources, processes and tools would destroy the balance sheet. Economies of scale are not feasible for an individual manufacturer, and many manufacturers consider after-sales service a fifth wheel anyway.
Big BPO Providers Are Neglecting the After-Sales Market
If a task within a company is not perceived as a core competency, the call for outsourcing quickly follows. We have seen an outsourcing boom in the past two decades. More than $140 billion was spent on BPO services last year alone – and the trend is growing. The list of the largest BPO segments is dominated by back-office functions suitable for outsourcing: finance, HR and procurement. In the customer care area, BPO services are restricted to offshore call centers and the processing of warranty claims. Those, looking for comprehensive BPO services in the after-sales area, search in vain. However, given previously described framework conditions, after-sales service is an outsourcing candidate par excellence.
As a BPO provider for after-sales service, we say: Great! Nevertheless, it’s worth taking a look behind the scenes. Why do BPO providers struggle to offer attractive after-sales service outsourcing? For large BPO providers such as Accenture, Capgemini, HCL, IBM or TCS, covering after-sales subareas such as call center services from their central offshore locations is an obvious choice. But as soon as it comes to services such as repair management, which aren’t supplied centrally, their service ends. This creates a gap in the market that is anything but small: According to our own calculations, the market volume for after-sales BPO services for mobile and IoT devices is currently around $50 billion – a gigantic market.
Mobile and IoT Brands Require Comprehensive After-Sales Service
We have clearly positioned ourselves in this market and are now working with six of the top ten smartphone brands. We entered the IoT market some time ago and offer manufacturers of all sizes a global after-sales solution. Together with our customers, we focus on delivering an excellent customer care experience and taking responsibility for customer satisfaction. We cover the entire after-sales process – from on-device diagnostics to online self-help and call centers to intelligent logistic solutions and device repair inside and outside the warranty. Our projects are complex yet successful – but I’ll discuss the success factors behind after-sales BPO projects in my next blog post in more detail. I look forward to your feedback. Contact us today, and don’t forget to follow B2X on LinkedIn!
Rainer Koppitz is CEO of B2X.