Welcome to the September edition, of our "More Human" CX industry newsletter. As in our previous editions, we are highlighting key developments and trends impacting the CX industry to provide inspiration and strategic guidance to CX leaders and contact center professionals.
After a short summer break, we continue our newsletter series with a special focus on (i) the recent M&A activity in our industry, (ii) the current state of the consumer, and finally (iii) the expectations for the upcoming holiday season.
All of a sudden, CX got Wall Street's attention
The customer service industry has had quite a busy year so far when you look at the recent M&A activity. The wave of high profile deals started in January when TELUS International (NYSE & TSX: TIXT) which builds and delivers next-generation digital solutions to enhance the customer experience (CX) for global and disruptive brands launched its successful IPO. TELUS has over 56k team members working in 50 centers around the world generating about $2.2 billion in 2021. At today's close, TELUS is valued at almost $9 billion.
The most talked-about event so far though was the TaskUs IPO. TaskUs has raised more than US$300 million after listing its shares on Nasdaq on June 11. But this was just the beginning! After its first earnings call as a public company, its shares doubled in just 3 weeks, valuing the company which is aiming to generate 700 million in revenue this year at $6.1 billion. TaskUS benefits from the rapid growth of its high-tech clients such as Facebook (30% of revenue), DoorDash, Uber, Zoom, Netflix, and Coinbase. The public listing of TaskUs and related news coverage has elevated the global CX support business conversation to a new level, driving mainstream attention towards an industry that – in the minds of many – has for too long been relegated to a ‘back-office’ cost-center driven designation. The valuation of this IPO reflects that companies now understand that CX is crucially important to business success especially for the high growth / tech sector which drives most of TaskUs and also TELUS business.
But that was not the end. Only a week later on June 18, Sitel Group announced that they have reached a definitive merger agreement and will acquire all of SYKES’ outstanding shares in a transaction valued at approximately $2.2 billion. The purchase price represents a premium of 31.2% over SYKES’ closing price. The merger will create a customer service powerhouse with +155K employees around the world and most likely provide further momentum for the consolidation of the CX industry.
One thing is certain, this for sure will not be the last major deal! The current valuations are providing a uniquely positive environment for many innovative CX companies to find attractive M&A opportunities. It also will most likely lead to a wave of new entrepreneurs entering the industry with new companies and ideas. All this is extremely good news for the entire CX industry. As I pointed out in prior newsletters, companies - led by the most innovative and dynamic players -- are finally waking up and understand that customer experience is the one metric they have to get right at any cost. Just years ago, customer service was broadly viewed as a cost center that needed to be maintained at the lowest possible cost. How the world has changed!
Consumer spending recovered in Q2 but pandemic driven trends continue
McKinsey released their latest consumer trend report which showed that the US consumer spend fully recovered in Q2 2021, driven by the confluence of increasing vaccination rates, stimulus payments in March 2021, an optimistic outlook toward economic recovery, and the general reopening of the economy. Consumers’ pent-up demand and willingness to spend in some discretionary categories caused spending to grow at 20 to 30 percent year over year, reaching 4 to 7 percent above pre-COVID-19 levels. While lower- and middle-income consumers drove much of the spend increase through the spring of 2021, we now see a change, with the recent increase coming primarily from higher-income groups. However, while the economy recovers, consumers are again adjusting their behavior as the economy reopens. The loyalty shakeup continues, as 30 to 40 percent of consumers continue to switch brands or retailers, driven primarily by younger consumers seeking value, combined with greater emphasis on purpose-driven alignment and quality.
E-commerce sales continue to experience outsized growth, with online penetration remaining approximately 35 percent above pre-COVID-19 levels, and e-commerce showing more than 40 percent growth over the past 12 months. At the same time, brick-and-mortar spending on retail categories has stayed relatively consistent during this whole period. Finally, as we all expected, consumers and employers are adjusting to a “next normal” in remote work models. In addition to increasingly hybrid work models, we continue to see a corresponding shift in purchases and investments focused on home-based working and living. It is expected that this trend together with the shift to e-commerce will continue well into the future. Customer service organizations need to continue to re-build their operations and servicing model to align with the new expectations of employees and customers.
3. What to expect for the Holiday Season?
One thing is certain about this year’s holiday shopping season: It’s going to look different from 2020. The good news is that U.S. holiday retail sales in 2021 are predicted to increase 2.7% to $1.093 trillion, with e-commerce accounting for a record 18.9% of all holiday retail sales. Thanks to widespread vaccine access and Covid-19 restrictions largely being lifted across the country, 2021 is poised for a major return to all things holiday -- which means it’s time for brands to start their planning. The holiday season is going to stand out in contrast to 2020, but make no mistake, we won’t be reverting to 2019 trends. As I pointed out above, some fundamental consumer behaviors will be hugely different from last year, while others will persist into the post-pandemic economy and beyond. Customer Service will remain at the center of the entire shopping experience. In a year that’s still full of uncertainty, the best way to connect with your target audience is through the people who represent that audience -- and care about what they care about.
We would like to wish all our readers a great September!
This whitepaper outlines the top 10 ways to delight your customers today based on the survey findings from the 2021 CCMC Customer Delight Study with John Goodman.
Key Findings:
Inexpensive delighters such as enthusiasm and empathy, are as effective as monetary ones
Honesty and transparency are powerful delighters regardless of the news
Digital channels (email and chat) can create as much delight as in person and phone channels
Affluent customers will pay more for the same product to businesses that delight
Higher-income, delighted men produce more positive WOM than other customer groups
Delight can be a very powerful Marketing strategy since the data shows at least one new customer is won for each delighted customer
Living Wage and Its Impact on Customer Service Quality
At VIPdesk we believe in paying our team members a fair living wage - that's why we announced that all employees will earn $15 or more in 2021. VIPdesk believes that happy and cared for Brand Ambassadors are the key to happy customers.
Becoming a business that believes in and practices a triple bottom line of People, Planet, and Profit is not a simple process. But it is the right thing to do if your business supports its employees, customers, and community.
10 CX Thought Leaders You Need to Follow to Stay in Tune with the Pulse of the Industry
Following a shortlist of thought leaders will allow you to better understand the environment your organization is operating in and help react with proven best practices in mind. Here are a few names you should consider.
Sally and Jen speak with customer service guru John Goodman. In this podcast they discuss the newly released Customer Delight study, a first-of-its-kind scientific, large-scale study on customer delight. The study, sponsored by VIPdesk, examines the value of creating delight, what causes customer delight, and how businesses that fail to do this are likely missing out on their most powerful marketing strategy.
Celebrating You Team With a Virtual Annual Awards Ceremony
A reflection on VIPdesk's annual awards ceremony, an event to honor the accomplishments of the team. After a difficult year for everyone, it’s even more important to take a little time to recognize the team for all that they do. They offer tips and suggestions for how you can plan a virtual celebration that gets the team involved.
September and October will provide plenty of opportunities to participate in industry events across the country. A good mix of in-person and digital events will present great options for any purpose and budget:
2021 CCW - Customer Experience Trends, Challenges & Innovations, September 14-15 - 12.00 PM ET
This online event will explore data from CCWs annual Consumer Preferences Survey. It will reveal what today's customers actually want - and how companies can efficiently deliver. It will also reveal strategies for consistently uncovering - and then adapting people, processes, and technology too - the specific voice of your specific customers.
Unfortunately ICMI decided to cancel their in-person format due to the new concerns about COVID. However, the content of the digital show should be equally exciting. Also, what better way to bring Customer Service Week (October 4-8, 2021) to life! Invite your team and colleagues to attend with you to get the most out of the digital experience.
SOCAP is back with their eagerly anticipated annual conference tailored as a learning experience. We see the Emerging Horizons and we want you to join together with your colleagues from the US and Canada to share what you've learned so we can grow together and continue to develop the next generation of Customer Experience experts.
Customer Contact Week returns this fall to Nashville, TN (October 20-22, 2021)! We can't wait to reconnect with old friends and new ones and get back to what we do best - creating an experience you can only get at a Customer Contact Week event. Our program tackles all the issues and trends that have emerged over the past year, providing you with the tools and solutions you need to finish off 2021 strong and plan for a successful 2022.
With their in-person conference series, Frost & Sullivan aims to create a truly unique conference atmosphere by fostering Interactive discussions that are incredibly open and honest and presenting real-world examples and insights from speakers on the leading edge of customer experience innovation.
The CS100 Summit provides customer success executives an exclusive learning environment with like-minded executives in a pristine location to create an atmosphere of inspiration, ideation, strategy, and real-world application around customer success.
VIPdesk, a premium provider of outsourced customer experience solutions, utilizes a select team of remote work-at-home Brand Ambassadors (customer service professionals), located throughout the U.S., to provide elevated customer experience for luxury and premium brands. As a certified B-Corp, Women-Owned-Corporation, and Best Workplace winner, VIPdesk is on a fast mission to elevate the human experience with its team members and its partners. Talented team members of VIPdesk not only excel in delivering superior customer service but are passionate ambassadors of the brands they serve. VIPdesk's suite of services include Omni-Channel Customer service handling including all traditional and digital contact channels, full AI and assisted AI solutions, social media management, back office support, and customer experience consulting.
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