Understanding the key factors and hurdles small BPO’s face can be the key to success in a competitive marketplace. Knowledge from experienced BPO executives can be an invaluable tool to steer your operation into the fast lane:
• Business Development Representatives are expensive! Hiring good sales talent is always a challenge. Junior level sales people are more cost effective, but may have a difficult time engaging C-Suite and senior company leaders. It can take tenured BPO sales professionals 6-12 months to build a solid pipeline and longer to bring some of these opportunities home. These tenured business development representatives have become accustomed to a larger base (typically $100,000 USD) and a strong commission model (3-2-1 or some variation).
• It’s hard to provide references when you’re a new BPO. You cannot use the 1-2 clients you have as references each time you are in a sales cycle. Typically, a new or smaller BPO will project scale and expertise that they may not be able to demonstrate on a client visit. The “build it and they will come” model is always harder than that.
• Being and smaller or a new BPO provides clients leverage to negotiate very favorable rates. It is a common practice for a BPO to provide heavily discounted rates in order to win their early business. This is a double-edged sword that may provide short term growth in sales and help fill your center, but can hold an organization back in several ways. If the new client is large, they can utilize much of your capacity and impede your ability to bring in higher paying clients. This also creates a situation of dependency. If a large client decides to cancel the contract, this can seriously harm a small BPO.
• Cultural, language, logistical barriers can also make it difficult for nearshore and offshore BPOs to gain market traction with US based clients. It is critical that key operational and account management resources understand this challenge and act accordingly. New clients want to know that their outsourcing partner understands the US B2B and B2C customers. They want to know that their team can effectively communicate with their BPO partner to implement the account and resolve challenges quickly.
Remember, we all have to start somewhere. Build a good team and a solid plan to attract new customers. Have realistic expectations based on the plan you create.