Comdata’s Ilija Baca, Director of Business Development in their Global Clients Division, gives an Insider’s view of the German market, updating on key trends around Digital Transformation and Customer Expectations.
Digital Transformation is the Big Story
The Customer Management headline in Germany is digital transformation, and the pandemic has accelerated the process.
As a result, businesses are in a race to integrate new technologies such as AI, RPA, voice and speech recognition and digital self-care: one study (2020) of the German market predicted that bots would soon be handling 70% – 80% of communications for enquiry-intense companies and industries such as banking & insurance and energy.
The story may sound similar to that in other countries, but there’s an important local element here: German consumers are, by and large, reluctant converts to digital.
They still want to talk to a human being, despite the greater take-up of digital channels such as WhatsApp over the course of the pandemic.
There are generational differences of course, with younger consumers more open to IVR (Interactive Voice Response), but the resistance to digital interaction still seems stronger than in some other markets.
Are Businesses Ready For It?
This digital resistance adds further complexity to the already-complicated task of digital transformation. Brands have a major task to:
- identify which processes can be automated, and how, without jeopardizing the customer relationship in Germany
- achieve a seamless interface between automated and human touchpoints
- manage the delicate balancing act between optimizing costs, providing the human touch that German consumers still appear to expect, and educating reluctant consumers to embrace automation and self-service for some of their interactions.
Are businesses in Germany ready for this transformation process? In many cases, not. They know about the trend and the need to transform, but they’re not there yet. Strong partners are essential to help navigate the digital transformation process.
Consumer Behavior and Expectations
With CX now a critical differentiator in many industries, it’s more important than ever to have local knowledge and understanding of what consumers and customers think, prioritize, worry about and value.
In many ways, German consumers are similar to their counterparts elsewhere in Europe – they embraced the same pandemic trends in terms of the shift to e-commerce, living their lives online and working at home. But some key national specificities remain, for example:
- call times for German consumers remain lower than in many other European countries; they may want to talk to a human, but also want to cut straight to the point, without much chat beforehand
- there’s a strong consumer and corporate focus on data security and compliance, with some businesses conservative about data going outside the EU
- there are local business trends to engage with, such as major structural changes in the energy sector in Germany over the past decade or so.
Those are three very different examples, which are certainly not the only specificities, but they give a taste of how local knowledge can help grow long-term customer relationships and value in Germany.
Is Work at Home Here to Stay in Germany?
Like elsewhere, Covid has brought changes to working patterns in Germany, with a mass shift to working from home.
Many large companies will continue to offer the choice for their staff to work remotely, but other businesses and staff are indicating a preference for hybrid working, with a mix of home- and office-working.
As elsewhere, this is a key trend to monitor as the country emerges from the pandemic: it will affect the way consumers shop, travel and engage with businesses, so brands need to understand this on the ground.
Offshoring and Nearshoring Trends
It’s a global pattern that brands are reviewing their balance of onshore / offshore / nearshore, with every aspect of their Customer Management budgets under scrutiny post-pandemic.
The same is happening all over the world, and in Germany too the trend is going more and more towards nearshoring and offshoring in order to optimize costs.
But here too, it’s important to understand local needs and attitudes, and how to achieve the best balance of onshoring / offshoring in different industries in order to protect and grow customer relationships.
One challenge with offshoring and nearshoring in the German-speaking market (as with the Netherlands and Nordics) is the issue of finding large pockets of German-speakers in a single location, allowing you to scale your operations there.
This necessitates a different approach to scaling: being flexible with locations and operational delivery. At Comdata, for instance, we have highly-trained German-speaking agents across a range of locations, including Turkey, Romania and Morocco, as well as Germany.
The fact we have consistent processes and operations across our different locations makes this possible.
Shaping the Future Through Local Knowledge and Agility
With all these trends in Germany – digital transformation, consumer behaviour, offshoring and costs optimization – flexibility and agility will be key. Brands need partners who understand local variations and pace of change, and have the expertise to guide brands through the changing landscape.
That’s the case in Germany, just as it is everywhere – businesses need partners who are strong enough to lead, but local enough to read the market, both today and tomorrow.