City Focus: Is Berlin Europe's new business hub?
With insight from a global business leader, we have taken a look at Berlin’s recent development and why it is attracting workers and entrepreneurs from around the world.
In recent years, Berlin has proved itself as a city overcoming problems and climbing to new heights of influence, both at home and on the world stage, with a bright future ahead.
The German capital has a steadily growing population that is now approaching four million and is the country’s largest city as well as the second-most populous in the EU.
The appeal of modern Berlin
Berlin's foreign population is immense, second only in Germany to Hamburg, with more than 190 different countries represented among the 621,000 registered foreign residents. Only one in four local residents today is a born and bred Berliner. In some ways, the city represents a clash of cultures.
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About half the population is single, or at least not married in a traditional way. Berliners love music and celebrations: three major opera houses compete for attention with late-night clubs, noisy beer halls, and the world’s largest beer garden. The city's bridges outnumber those in Venice, and it boasts more water than Venice, Stockholm and Amsterdam together. The modern city, home to Germany's tallest structure, Fernsehturm Berlin, is considered the country's greenest metropolis, and it also is home to three UNESCO World Heritage Sites.
Berlin is a popular city for visitors, but it is also very much a working city, both in terms of governmental and private business. Among German cities, however, it is not the most prosperous with disposable income lower than the national average. On the flip side, however, living in Berlin costs less than in other European capitals or other German cities. Rent, food and recreation are more reasonable than in other large cities. Particularly for students, the cost of living is affordable, and the quality of education is high. The city consistently earns high marks for educational excellence, especially in the sciences.
Fields of employment
In 2017, based on EU assessments, the main sources of employment in Berlin fell into the major areas of real estate; professional, scientific and technical services; retail and wholesale trade; motor vehicle maintenance and repair; and social work and residential care. In addition, Berlin’s location in Northern Europe is ideal for supplying goods and services to the rest of the continent and beyond.
Since Berlin’s reunification in 1990, the intervening decades have brought many changes. Berlin’s story is one of job growth: a young population and an eager, well-trained work force is prepared to fill the many positions that are created annually to service a growing population.
The city faces some uncommon problems associated with its international population, but vocational and technical schools do an admirable job of preparing many students for success in business and industry. The unemployment rate, however, reached 9.6% in 2017, and even though that number was a full percentage point below the previous year, it is still substantially higher than the rest of Germany.
Transport and mobility
The most important sector in Berlin is transport – but it’s not just about Rolls Royce, Volkswagen and Mercedes-Benz, as important as they are to the economy. Sustainability-focused electromobility, as well as aerospace, are key to the continued growth and health of transportation-related firms. The city is also a global force for logistics and telematics services, and a leading centre for rail technology and intelligent transport systems.
Global education offering
More than 180,000 students were enrolled in Berlin's institutions of higher learning during the 2016/2017 school year, with foreign students accounting for nearly 20% of the total. The city's four universities, scientific institutions, art colleges and institutes, along with more than a score of state-recognised private institutions, are highly competitive and sought after. In addition, there are more than 70 research institutes that are not affiliated with universities. The availability of partnerships with other global institutions is high, and a high percentage of students in Germany are from China, the United States and Russia. Annually, Berlin invests approximately €1.5bn ($1.75bn) in its educational institutions in an effort to maintain programs and quality instruction.
A family friendly lifestyle, with an emphasis on childcare and early childhood development, including universal all-day primary schools, is the norm in Berlin. In addition, there is a multitude of recreational opportunity, leisure-time activity and diversified sporting events. Social welfare infrastructure targets a high quality of life and an excellent public transportation system makes access to amenities easy for residents. Family support services and child advocacy programmes seek to improve the social well-being of all, old and young, native residents and new arrivals.
Berlin is a distinctive city in many ways. While it is still in a growth and development mode, it recognises its unique challenges and has taken positive steps to address them. The fact that it is the capital of the country means that the world's eyes will continue to be trained on the city. So far, it has responded in an exemplary manner.
Spreadshirt – a global business
Spreadshirt is a global print company that was founded in Germany and retains an important hub in Berlin, despite having expanded across Europe and into the US. We asked CEO Philip Rooke why he things Berlin is the place to do business.
Why do businesses thrive in Berlin?
“As a whole, Germany is an easy place to do business on an international scale. In particular, Berlin has great talent, is cost-effective and is becoming the new business hub of Europe. Since Berlin is already a major city, and Brexit has affected the world view on London’s role in the EU market, Berlin has become attracted to talent. Many people are travelling from all over the world to Berlin, who used to travel to London. In addition, the cost of living for that talent and the cost of rent and other services for business are much cheaper. This environment makes the city a number one choice for startups.”
Why is Berlin an important hub for Spreadshirt?
“Some of our key talent (including myself) lives in Berlin, and while we are headquartered in Leipzig, Berlin was the place we were more able to set up our pan-European marketing and sales, due to the more international base of the workforce. We also just love the vibe of the capital city.”
Tell us about the spirit of entrepreneurship in Berlin.
“Berlin is a vigorous, cultural and creative city. It was like London and San Francisco 15-20 years ago. So many new companies are starting here every day, and some are now growing to an international scale and reaching the stock market, such as global food business Lieferheld. For a capital city, Berlin offers a higher standard of living at a relatively low cost, and as it’s smaller than some European capitals, it’s easier to connect with people. It’s full of talent and exploding with ideas.
“All in all, people and businesses come to Berlin for the everyday incentives of culture, talent, cost, and frankly, to be where the other entrepreneurial companies are.”
Re-defining the economics of CX in the new customer journey
There’s no shortage of customer service channels for the enterprise to select from today. Regardless of the many new metrics that have emerged – such as customer success, or empathy – cost reduction is still a primary driver in selection criteria.
There are many articles dedicated to how companies can turn customer service and customer experience (CX) from a cost to a revenue centre. The problem is, if you stop there and don’t look beyond cost reduction, you’re limiting the scope for CX to become an even bigger economic contributor in the enterprise.
There is every opportunity for customer service and CX to significantly influence the front end of business, particularly amongst direct-to-consumer subscription-based products and services, such as popular streaming services like Netflix, Amazon, Disney+, as well as sports subscription services like DAZN.
In these products and services and others, there are new customer journeys that may drive business growth and revenue. They start earlier and may last a lifetime, so getting things right at the start of the journey is key so that customers have the best experience from day one.
Not only will this help in making customers less likely to reach out for issues-based support further down the line, but these customers will be much less likely to churn, and much more likely to take up new services as they are offered throughout the lifetime journey.
So, what does the new customer journey look like for these services?
Opportunity waiting for the likes of Netflix & Disney
While consumers may have previously regarded customer service as a way to mitigate the inconveniences in their lives, the customer journey is expanding in scope every day. Today there are many more touchpoints available that put CX in a position to drive revenue.
For one-off purchases, traditional CX deployments have not changed significantly in the past few years. However, if you look at the change in the CX relationships we’re seeing with subscription-based products and services, particularly media-based streaming services, it’s clear that these companies lead what quickly become very multifaceted relationships with their customers. These have serious potential to evolve over time for increased economic benefit.
For any sort of subscription-based business, customer lifetime value is paramount, and the requirement to actively manage a continued positive customer experience is critical.
Every interaction is an opportunity, and every data point is a chance to offer more value. Introductory offers can convert to longtime customers. Longtime customers may take up opportunities to upgrade to more premium products or services. They may also appreciate incentives to invite family and friends to become customers. Consumers who like a particular service, for example, may appreciate a recommendation for another similar or complimentary service.
It all starts with customer interaction, and the customer experience journey becomes an opportunity to strategically affect the user base and resulting revenue - which is a far cry from the limitations of call center cost reduction or churn metrics.
How do companies support the new customer journey?
More and more, customers look at the new customer journey as engaging with brands as part of their lifestyles. Many companies are making brand ambassadors available before the traditional customer journey even starts, which is a marked change from a purely transactional relationship associated with a one-off purchase.
These ambassadors, who are often independent users of products or services, are providing trusted pre-sales advice, and that same trusted advice can also function to nurture the customer journey in a subscription-based relationship. Call it ‘GigCX’ or ‘crowdsourced customer service’ or even ‘peer-to-peer customer service’ - it doesn’t matter.
The key is in providing impartial, trusted advice from real users. Think about it: who would you rather get advice from? Someone who has used a product or service extensively, or someone who has been trained to provide customer service surrounding that product or service?
For services such as streaming media, advice from trusted experts with real product know-how could be invaluable. This may not be limited to technical issues, such as what to do when you can’t access your favourite show, or how to access services across various devices. It could be parents helping other parents who are concerned about how to restrict adult content from child viewers, or simply customers who have similar taste in programming who can comment on the benefits of upgraded or premium products. The point is, these experts are easily available at any touchpoint in the customer lifetime journey, creating more chances to add value.
It’s also about tipping customers from ‘passive’ to ‘promoter’ in the NPS scale. It’s an opportunity to turn neutral customers who may be vulnerable to competitive offerings into loyal enthusiasts who will keep buying and referring others, fuelling growth. It may ultimately help drive even further revenue by creating customers that are helping to sell the brand itself.
And, while chatbots and automation may play a key role, they are often not able to handle the more complex support needed in the new customer journey. Conversational AI is rarely as conversational as it claims to be, and in the new customer journey, most companies are finding that a mix of automation and people-centric service is an ideal way to nurture the many new touchpoints created.
It’s no longer about trying to replace human capital with automation: it’s about orchestrating a uniquely personalised CX, and proactively engaging during the customer lifecycle to enhance the experience, and to create more long-term value.
At the moment, we’re only seeing the tip of the iceberg in terms of the power to affect the economics introduced by the new customer journey. We’ll no doubt see this evolve rapidly particularly amongst streaming companies as they use human-centric connections in CX to support the full potential of customer lifetime value.
About Roger Beadle
Roger Beadle is an entrepreneur and business leader who is reinventing how customer service is delivered via the gig economy. After establishing several businesses in the contact centre industry, Roger co-founded Limitless with Megan Neale in 2016. Limitless is a gig-economy platform that addresses some of the biggest challenges faced by the contact center industry: low pay, high attrition and access to new talent. Previously, Roger and Megan helped to build one of the largest privately-owned outsourced contact center business in Europe, before selling the business to the global conglomerate Hinduja Group. Roger is an outspoken proponent of digital ethics, worker’s rights and the ‘good-gig:’ which encapsulates gig work for incremental pay versus full time work, skilled gig work, no unpaid time/downtime and zero expenses.
Named a Rising Star at Deloitte’s Technology Fast 50 program, Limitless is a gig customer service platform, combining crowdsourcing and AI to help global businesses address their biggest customer service challenges – rising costs, increasing attrition, variability in demand and the need for diversity. Brands like Microsoft, Unilever, Daily Mail Group and Postmates are using Limitless’ SmartCrowdTM technology to connect with their most engaged customers, and reward them for providing on-demand customer service that can flex in line with demand. Limitless is one of the world’s first global tech platforms to introduce localised platform terms to protect the rights of its gigging workers. Backed by AlbionVC, Downing Ventures and Unilever Ventures, Limitless is empowering people worldwide to earn money for providing brilliant customer service for the brands they love.