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The CX Formula Gets Squeezed By Waves of Customer Care Acquisitions

concentrating worker

With tireless regularity, the customer care sector undergoes a feeding frenzy. It’s a predictable cycle that occurs every decade when large, global corporations with thousands of agents consume smaller, mid-sized customer care providers.


It happened about ten years ago when a series of BPO companies were acquired by larger counterparts, including HP’s acquisition of EDS, Dell snapping up Perot Systems, and Xerox’s $2.6 billion purchase of ACS. A host of non-household brands were being acquired in the background as well.

And it’s happening again.

Startek recently announced its initial investment in an organization called CSS Corp., leaving open the door to acquire controlling interest of the customer experience company. In addition, Salesforce’s blockbuster deal to acquire Slack for $27.7 billion led a CX buying spree that also includes Adobe, Twilio, Microsoft, Facebook and SAP. These corporations needed contact center infrastructure, so they just went out and bought it.

These examples of build-outs for CX capabilities by large brands – and expected announcements in the next few months - will have predictable impacts on the broader customer experience, and none of it will be good.

I tend to agree with Forrester Research analyst Kate Leggett when she wrote that these acquisitions could change the market landscape for customer experience. But while she maintains that these transactions will improve customer service because of increased spending in artificial intelligence (AI) and robotic process automation (RPA), I take a different path.
I worry that customers seeking help through their chosen brand’s customer care channels will suffer.

These large acquisitions will have to demonstrate ROI quickly for shareholders, and this will mean that customers’ service will be commoditized. This will be easier for some companies to do as they seek providers to fill seats in their customer care facilities with employees who aren’t fully trained, or who are seeking a transient role and will provide less-than-stellar service.

And the large corporations likely will be fine with this approach, at least in the short term. The number of lost customers who leave because of poor service will be offset by operational savings.

This sets up the cycle of mid-sized companies to fill the “customer service gap” left by the large firms. Mid-sized customer care companies make their names by providing exemplary service. They excel in providing great customer service because they look after the basics – the blocking and tackling of CX. They answer customer questions quickly and accurately, and make customers’ lives more convenient by simplifying transactions and saving them money. Meticulous attention to detail set the mid-sized providers apart from their oversized, corporate competitors.

Perhaps most importantly, they can recruit better staff. By hiring experienced, seasoned leaders, a mid-sized provider benefits from decades of experience and can implement the same procedures and practices a larger competitor offers. By selectively hiring motivated employees, these same companies can train new agents who genuinely care about customers. These same employees often choose a career in customer care, enhancing their skills and knowledge through additional training and education to assume supervisory and leadership roles.

From the client perspective, they typically have a better line of sight of how their customers are being treated. They can easily determine and work with the account leaders who work with floor staff daily. They quickly know the questions that are being asked by customers and they know the issues and what is working right.

When client staff know who to call at their customer care provider, they can react quickly to changing conditions and pivot to seize opportunities. These capabilities are missing in larger companies where there is a void behind the customer care curtain. The client doesn’t know who is talking to their customer, what they’re saying, or how the customer is reacting until it’s too late.

This opaque version of the business doesn’t happen at mid-sized companies. They are the true custodians of customer care – focusing on details – and delivering value to the client and their customer in equal measure. They know how to deliver quality with every customer interaction, whether it’s on the phone, email or chat line.

And they don’t have to be reminded of this every 10 years.

Topics: Customer Experience, Outsourcing, Small Contact Center