Suppliers are charging higher prices as buyers seek more specialized and complex customer support.
Los Angeles, CA (PRWEB) July 06, 2014
Telephone support services have a buyer power score of 3.1 out of 5, reflecting a moderately positive purchasing environment and a low risk of price volatility associated with telephone support services. “Several factors work in the buyer's favor, but some harm buyer power,” says IBISWorld research analyst Andrew Krabeepetcharat. For example, market share concentration is low, which promotes price-based competition and helps mitigate price growth. And low supply chain risk benefits buyers: input costs for suppliers are steady and reduce the likelihood of sudden price shifts or a discontinuity of service. Switching costs are moderate, though, because certain buyers need to provide substantial training for telephone support staff to handle customer service requests. Additionally, the majority of suppliers have been facing falling profit margins, thus reducing negotiating power for buyers.
Despite some factors working in the buyer's favor, buyers still face the rising cost of telephone support services. Suppliers have been increasing prices during the three years to 2014 in response to growing demand. The recovering economy has allowed many businesses to improve their customer satisfaction through telephone support, providing many suppliers the opportunity to raise prices in an attempt to achieve a higher profit margin. Says Krabeepetcharat, “Increased technological innovation will also prompt price growth as telephone support services further integrate value-added features, such as voice recognition capabilities and simultaneous online support for clients.”
While many suppliers have shifted domestic work overseas to countries with lower wages, many others are moving services back to the United States due to rising wage costs in emerging overseas countries. Over the next three years, prices are expected to continue growing as the economy improves further and more businesses invest in improving their customer satisfaction levels through telephone support services. Fortunately for buyers, price growth is forecast to be steady and predictable with low volatility, reducing the likelihood of sudden price shocks and allowing for better financial planning. Current major players include Sitel Corp., West Corp., Teleperformance and Convergys Corp. For more information, visit IBISWorld’s Telephone Support Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of telephone support services. Telephone support services allow businesses to offer over-the-phone customer service and technical support related to goods or services sold. This report does not include call forwarding or telemarketing services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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