European SMEs missing out on financial benefits of exporting
The majority of SMEs across key European markets are missing out on the benefits of exporting according to the new *European SME Export Report, conducted by Harris Interactive and commissioned by FedEx Express, a subsidiary of FedEx Corp and the world’s largest express transportation company. Findings show that more than 6 out of 10 (62 percent) SMEs are currently not exporting despite over three quarters (78 percent) recognising the potential of international markets and customers, and reveal the potential revenue lost by non-exporting SMEs who are missing out up to an additional €647,000 on average in annual sales.
The report takes a timely look at current export behaviour and attitudes among the region’s small and medium-sized businesses, which are widely acknowledged as having a major role to play in driving growth, opening new markets and job creation. It highlights clear differences between the individual markets researched, with exporting behaviour ranging from more commonplace in Spain, where almost half (47 percent) of SMEs are internationally active, to 41 percent in Italy, with French and German SMEs reporting markedly lower levels at 32 percent and 31 percent respectively.
Those SMEs that are exporting to other markets tend to do so on a ‘local’ level with only a quarter (24 percent) exporting outside of Europe. Spain leads the way with a third (32 percent) of SMEs taking advantage of US and LatAm markets in particular, compared with just a fifth (19 percent) of German SMEs which are more focused on near-neighbours in Europe including Austria, Switzerland and France.
Exporting SMEs appear to be reaping significant financial benefits from being internationally active, with fast-growing SMEs (52 percent)** twice as likely to export compared to SMEs that are static in growth or in decline (28 percent) in revenue terms. Exporting SMEs are also more optimistic about their revenue prospects over the next 12 months, with 60 percent expecting growth compared to 48 percent of non-exporting SMEs.
While most SMEs expect more growth in international than domestic revenue, only 23 percent across these key EU markets have firm ambitions to grow their international base, strongly indicating that SMEs are not completely sold on the benefits of exporting just yet. Indeed growth of the SME export market is projected to be steady, with 50 percent of European SMEs anticipated to export in five years’ time (compared with 38 percent today), rising only to 55 percent in a decade.
David Binks, President Europe, FedEx Express comments: “Our research shows that SMEs across Europe are missing out on additional revenue, lacking in confidence to think beyond their own country borders, largely because they perceive the barriers of trading internationally to be too great. Many are reluctant to explore lucrative export opportunities because they are concerned about the practicalities of ensuring they get paid and handling queries and returns without a presence in-market as well as lacking technical know-how around legal processes such as customs procedures.”
“At FedEx, we work with SMEs to help remove the barriers that prevent them from taking advantage of the attractive growth option that exporting can provide. Our aim is to increase the global footprint of European SMEs – those looking to expand existing exporting capabilities as well as those keen to take their first steps. With dedicated online Small Business Centres and access to more than 3,000 global trade experts across our network who can share experience on customs regulations, documentation and packaging, we make it easy for SMEs to do business on the international stage.”
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.