France’s Booming Customer Services Market in 2019

Since 2016, turnover in the outsourced customer service market has increased by 6%. This sustained growth is due to:

greater focus on consumers and users, requiring qualified professionals
diversification of services offered and business areas

A review of the major trends and figures highlighted in the EY SP2C 2020 Barometer.

Outsourced customer services: a market on the move in France in 2019

In 2019, the French customer service market represented:

€2.9 billion turnover, of which €2.01 billion was generated by SP2C members. Turnover is up 6% compared to 2018
49,000 employees, including 33,000 SPC2 members, according to the latest Branche report
64% share of the European market, with 53% of turnover based in France.
The SP2C members account for around 73% of French market turnover in 2019

This puts France in second place behind Germany for outsourced CRM in Europe. At a global level, France accounted for between 3.4% and 5% of the market in 2018.

Contact centres branch out in 2019

Contact centres have seized on the development opportunities available to diversify, enabling strong market growth in 2019.

This diversification, now a major development axis, affects the sector, business area and customer base.

Contact centres expanding across market sectors

This change, central to SP2C members’ growth, accounted for 2.6% of turnover in 2019.
It is based around three business areas:

Consulting: the main growth driver, excluding outsourcers’ core business activities, represented 37.7% of turnover from diversifying in 2019
Training: in recognition of the skills and expertise of customer service centres, training has seen an 18% increase in 2019, reaching 23.2% of turnover from diversified activities. It involves upskilling telephone advisors for written channels such as texts, email, chat and social networks
Customer Support: this remains the most important share of the French market with an increase of 6%, bringing this activity to 80% of total turnover.

“It would be interesting for outsourcers to use digital to make a more structured transformation. Based on recent experience […] new services could be developed. For example: Business Process Outsourcing (BPO), training in digital customer service solutions, digital consulting and digital solutions integration based on the SS21 model. These opportunities should be seized given how the customer service business is transforming.” Éric Dadian, Chairman, AFRC

New service channels emerging in contact centres

Digital technology is driving change in customer service businesses, “professionals have to master new technologies and embrace the new codes associated with digital transformation.” Patrick Dubreil, Chairman of SP2C.

These digital channels complement the telephone which remains the leading tool with 79% of turnover.

When combined, these tools allow businesses to offer omni-channel solutions to meet consumer needs. We have seen significant growth with:

Chatbots/callbots: used by 57% of outsourcers
Social networks: with an increase of more than 36% in 2019, this digital tool has seen the most significant growth

“When a new channel opens, it doesn’t mean that the volume of contacts decreases on other channels.” Ludovic Nodier, CEO, Hubicus and BVA Mystery Shopping

Diversification supported by new customers

Although 70% of turnover is still generated by 6 historical customer sectors (telephone, energy, banking, insurance, travel and retail), others are emerging, offering great opportunities:

E-commerce: according to a Médiamétrie report in 2019, 38.8% of French people shop on the internet. It’s a real change in consumer behaviour which explains the 20% increase in the sector between 2018 and 2019. A figure which could increase even more given the effect of the pandemic.
The Media: More than 22.2% of market growth, driven by a buoyant economic context and competition from video-on-demand platforms encouraging companies to improve customer service.
Health: More than 17% of market growth. This sector offers good potential for growth, driven by an ageing population. The pandemic could also help this sector to evolve.

The number of SP2C members’ clients increased by 3.3% between 2018 and 2019, reflecting market condition.

“The growth of the French outsourced customer service market is mainly driven by the emergence of activity aimed at new business sectors: e-commerce, insurance, etc. which are at the fairly early stages of the outsourcing cycle.” Olivier Hérault, CEO, Coriolis Service

Finally, the report also shows an increase in the number of contracts between €1 million and €5 million generated by medium sized companies (more than 27%). The development of the SME and micro business market is one to watch over the next few years. In 2019, it represented 22.7% of SP2C members’ client portfolios.

“The emergence of this new sector of contractors contributes to the expansion of outsourcers’ customer portfolio. […] and this example is a real catalyst for growth in the area.” Olivier Hérault, CEO, Coriolis Service

Contact centres: drivers for employment and economic development

Customer services: a sector offering professional opportunities

Often considered low level jobs, contact centres now offer genuine opportunities, allowing professional integration and career development.

The sector relies on:

Diversity: age, education, qualification level. Contact centres recruit from varied profiles. There was an increase in senior profiles (55-64 years) in 2019 arising from the increase in supervisors.
Steady jobs: more than three quarters of jobs, 76.6%, are offered as permanent contracts.
Careers development opportunities: given the impact of digital technology, career paths are changing for call centre agents. Employee training is now a strategic priority. Most managers in the sector have come through the ranks and are former call centre agents.

Contact centres: vectors for regional economic development

With 92 locations, France alone represents half of SP2C member sites worldwide. The top 3 regions are:

– Hauts-de-France: with 11,000 jobs, of which 8,500 are SP2C members, which is 28% of the total number of SP2C employees in France.
– Grand Est: 4,300 SP2C employee members
– Nouvelle Aquitaine : 3,800 SP2C employee members

“The establishment of a contact centre changes the face of employment in an area, often with the creation of several hundred jobs in the region […]. These waves of job creation go hand in hand with a rapid increase in the workforce.” Yann Pitollet and Olivier Charras, CEO et Director of Projects Services at Nord France Invest

Find out more about the socio-economic impact in Hauts-de-France

The impact of COVID-19 on the customer service sector

The figures above are pre-pandemic. Like so many areas, the customer service market has not been spared.

Turnover in April and May 2020 decreased by 25% and 33% respectively compared to the same periods last year.

Nevertheless, BPOs have adapted during the crisis period. Long term structural and market changes offer the opportunity to relaunch:

Introducing working from home (WFH). The crisis has played a key role in increasing WFH, allowing companies to ensure continuity of services and could even facilitating a fundamental transformation of working practices.For 85.7% of SP2C member managers, digital transformation has led to the optimisation and reworking of internal processes.
A high responsiveness supporting service relationships and customer services in sectors that have been active during the pandemic: health, energy, telecoms, insurance, financial institutions and banks.
The growing development of e-commerce

Find out more, download the EY SP2C 2020 Barometer (french).