Client Base Diversification Produces a More Stable Revenue Stream

Diversify Your Client Base

Pursue a Diversification Strategy to Establish a More Stable Revenue Stream

Outsource call centers often end up focused on one vertical market. They lack diversification. This is an expected outcome, because their initial success with one client often brings in more clients with similar needs, generally from the same industry. This typical result, however, ties the call center to one industry. If the industry grows, the call center can grow with it. However, if the industry encounters problems, the call center will often suffer the same fate.

For this reason, outsourcing call centers desire to diversify their client base. In this way, they’re no longer dependent on the fate of one industry for all their business. However, diversification is challenging. This is because their contacts and their expertise lie within one industry. Moving outside the industry to embrace other needs presents challenges. In addition, it has a steep learning curve. Diversifying into new markets requires much networking to build a contact list. It also means developing new skills and knowledge to handle a more diverse client base.

Though one approach could be to take on any new client in any industry, a more realistic strategy is to intentionally pursue a second niche industry or vertical market.

How Diverse Should You Be?

Having all clients in one industry puts the future of your call center at risk. Focusing on two industries is better, but three is ideal. Though diversification takes time, an ideal goal calls for having a similar number of clients and comparable amounts of billable services in each of the three niche markets you serve. At most, no vertical market should account for more than 50 percent of your call center’s business.

Though it may take years to reach this ideal balance, it’s critical to begin now to be positioned better for the future. As a side benefit, a call center with a diversified client base will better weather an economic downturn or recession. Many once successful call centers did not survive the last recession in 2008. Wise businesses are preparing now for when the next recession does come. For outsource call centers, this often means implementing a diversification strategy.

The Situation

James Barker, a twenty-year veteran of the publishing industry, was at a crossroads in his career. He wasn’t looking to make a job change, but then an opportunity emerged out of nowhere. Building on his success in publishing, along with the trivial fact that he had worked in a call center during college, came an unlikely offer: take over management of a struggling outsourcing call center operation that specialized in serving the publishing industry. Before he knew it, James was managing a call center. Things went well, and soon he became a partner. Five years later he became the sole owner. He rebranded the business to JB Call Center Enterprises.

James worked hard to grow his call center’s clientele. With deep contacts in the publishing industry, he expanded from its initial one client to two and later doubled to four. But in the years that followed, his client list stayed mired at half a dozen. To grow further, he would need to look outside his industry, but his efforts to diversify produced no significant results. In addition, with the rapid changes in the publishing industry, he feared he might lose the publishing clients that he did have.

He sought outside help. After a few misfires, he hired a call center consultancy that specialized in sales and marketing. James hoped they could produce the results he sought. Here’s what they did to accomplish his goals.

Find a Secondary Vertical Market

The first step was to abandon James’s idea of taking on any new client regardless of their industry or need. That approach would just stress a call center staff and move them away from their core competencies. Instead, the strategic marketing agenda is to find another vertical market and focus all growth efforts on that niche.

While one approach to picking a secondary niche market would be to pick the one that sounded interesting or what seem to have the most growth potential, a wiser approach is to pursue and intentional analysis to find the best match. This is where the marketing consultants began their work.

Uncover What the Call Center Is Good At

First, the consultants analyzed the work performed for their different clients and interviewed them. They also observed the call center’s agents in action. A final step looked at past clients to identify areas of weakness.

A pattern emerged. JB Call Center Enterprises did their best work for mid-size companies in the publishing industry. Small players weren’t a good fit for the call center’s processes, while the largest players often overwhelmed them.

Other findings revealed that the call center was good at customer service and taking phone orders. Conversely, they struggled to handle technical calls.

Discover the Type of Work the Agents Enjoyed

Next, the call center consultants met with each agent. They asked a series of questions. First, they asked, “What types of calls do you enjoy?” The follow-up question was the opposite, “What types of calls do you dislike?” In addition, they asked agents for ideas about what type of work to pursue. The interview concluded with an assessment of the agents’ interest in taking on drastically different types of accounts.

Combining the agents’ input confirmed that the agents enjoyed customer service calls. It also revealed they didn’t like the more complex help desk work some clients expected. Another interesting finding revealed that the agents enjoyed taking phone orders, but they were frustrated with the limitations of their order-taking software.

This last bit of knowledge was a happy side effect of the consultants’ analysis. They embarked on a side project of identifying new order-taking software that was easier to use and more powerful.

Target the New Vertical Market

Armed with this information, the consultants concluded that the entertainment industry was a great vertical market to move into. It had similarities to publishing. This made for an easier transition for the agents—especially those resistant to change and who didn’t want to learn a completely new industry.

Within this niche market, their sales and marketing efforts focused on companies that had customer service needs and wanted back up order-taking phone support for their website. And if the prospect had a more involved help desk requirement, it would be important for JB Call Center Enterprises to hire new staff who would be up to that challenge.

Develop a Marketing Initiative

With a target vertical market identified, along with the types of work to pursue, the consulting team went about developing a diversification marketing strategy. They started with an overhaul of JB Call Center Enterprises’ website to address both the publishing and entertainment industries. To support this, they also developed a micro site to specifically target the entertainment industry.

Determine the Desired Growth Rate

The next step seemed silly to James, but it made sense after he thought about it. They asked him how fast he wanted to grow his outsourcing call center business. His initial thought of “as fast as possible” soon gave way to a more reasoned response. Given their target company size within this niche, James wanted to make sure they were only onboarding one client at a time. He also wanted a small buffer between adding clients to not overwhelm staff with the rate of expansion.

This meant he wanted one new client per quarter, but he also agreed to be flexible should new business not come in at this desired, manageable rate. He knew that if needed, his management team could onboard clients twice as fast.

The Diversification Results

The call center sales and marketing consultants then went to work to find new business for James and his call center. In their first year of work, they brought on five new clients. They were all within the entertainment industry and who matched the call center’s ideal client profile.

In addition to this, the consultants introduced new order-taking software and trained the agents on it. It was easier to use and allowed them to better handle phone orders. As a result, the agents’ attitude toward order taking changed, and it soon became their favorite type of call. This allowed JB Call Center Enterprises to take on more order-taking support work for their existing clients in the publishing industry.

Twelve months into the project, the call center marketing specialists had doubled James’s revenue and nearly doubled his client base. “I tried for years to crack the sales and marketing nut,” said James, “but I got nowhere except for making me a nervous wreck.” Then he smiled, “The best move I ever made was bringing in sales and marketing experts. They knew what they were doing, took the time to understand my business, and worked hard to reach the results I wanted.”

Next, for year two, James’s sales and marketing professionals will repeat the diversification process with a third vertical market. James can’t wait to see the results.

Many outsourcing call centers struggle with sales and marketing. And even those who do it well could do better with a little outside help. Call Center Sales Pro can help you realize your growth objectives through sales and marketing, along with suggesting internal process improvements and better software tools. Get in touch with them today and achieve the growth you dream of.