Los Angeles, CA (PRWEB) December 16, 2013
Telemarketing services have a buyer power score of 3.5 out of 5. A high buyer power score indicates favorable negotiating conditions for buyers. The score largely reflects the largely positive market structure and market risk associated with telemarketing services. According to IBISWorld procurement analyst Olawale Harrison, “the market for suppliers exhibits a low level of concentration, keeping competition up and helping to cap price growth”. Additionally, switching costs for buyers are low, as long as they protect themselves through a service-level agreement, and there is little risk within the supply chain for telemarketing services, which shields buyers from large price fluctuations. Buyers can also feel comfortable with the financial health of telemarketing service providers.
Nevertheless, buyers must contend with the rising cost of telemarketing services. Recent price increases have been minimal, slightly exceeding the inflation targets. During the next three years, however, prices are expected to rise at a slightly accelerated pace due to a shift in labor back to the United States; wage costs have increased in countries like India and the Philippines as their respective economies have continued to develop. Meanwhile, companies generally have strong financial health, but margins across the industry are relatively low. These low margins diminish buyers' leverage during the negotiation process, especially when negotiating price. “However, buyers should analyze prospective suppliers on a case-by-case basis to determine if any room in margin exists”, says Harrison.
As prices rise, buyers should look to take advantage of new value-added services that suppliers have begun to provide, such as cross selling and upselling. While these services increase upfront costs, they can generate additional revenue streams for buyers and result in a higher return on investment from the supplier. Fortunately for buyers, telemarketing contracts typically span a number of years, meaning the buyer does not have to repeat the negotiation process very often. Still, buyers should be certain to include performance options or a service-level agreement to protect themselves against a poorly performing supplier. The top four companies in this market are Convergys Corporation, West Corporation, SITEL Corporation, and Sykes Enterprises Inc.
For more information, visit IBISWorld’s Telemarketing Services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of telemarketing services. Providers of telemarketing services answer telephone calls and relay messages to clients. Additionally, telemarketers use telephone or e-mail to promote client products or services, take orders, solicit contributions or provide information on behalf of clients. Services are typically provided on a contract or fee basis. Telemarketers never own the product or provide the service they are representing. This report does not include fundraising campaigns or the gathering of marketing and public opinion data.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.