Ep. 43 The Emergence of South Africa in CX

The Appeal of South Africa in the Customer Experience

This week’s guest is Ron Dull, founder and managing director of Lookout Advisors, a customer experience (CX) consulting practice that specializes in CX transformation and contact center optimization as well as strategic services for CX solution providers. With more than two decades of experience in CX with brands, business process outsourcing (BPO) companies, and as a consultant, Ron brings global insights and valuable perspective to his practice. In this episode, Ron discusses why South Africa is an emerging location for CX delivery, the unique benefits South Africa offers, and how impact sourcing creates positive ripple effects throughout South African communities.

A Diverse Background in CX

Ron began his career journey in CX more than two decades ago. A few years out of graduate school with a background in engineering, Ron worked for a consulting and systems integration firm. He was tasked with helping companies design their voice and data networks as they created more centralized contact centers in the 1990s.

In the beginning, Ron did very technical work for clients but within a few years he expanded to work on customer relationship management (CRM) solutions as well as self-service solutions for clients. This ultimately led to a fulfilling career consulting with companies on CX and customer care strategy and operations with midsize and enterprise organizations.

Ultimately, Ron wanted to expand his CX experience in a more hands-on role, so he joined a large customer care contact center global outsourcing company where he ran operations, managed client relationships, and performed several other functions.

After working in this capacity for a number of years, the entrepreneurial bug bit him and he formed Lookout Advisors, combining his passion for CX with his background in consulting. Lookout Advisors is a boutique CX-focused consultancy comprised of experienced professionals who focus on CX transformation and contact center optimization for global companies. He consults with companies that run their own contact centers supporting their own customers as well as businesses that provide CX services such as outsourcing firms and CX technology companies.

The Top 5 Unique Benefits of South Africa in CX

Having worked in CX in virtually every geography around the world, Ron noticed multiple unique and powerful benefits of South Africa in delivering rewarding CX for many types of companies.

These unique benefits became increasingly clear several years ago when Ron was working with a client and with the Business Process Enabling South Africa (BPESA) industry association which represents the customer care and outsourcing services industry.

Among the many advantages of bringing customer experience work to South Africa, Ron has categorized them into five primary merits.

1. South Africa Is a Low-Cost Offshore Geography for CX

South Africa is an offshore geography that offers low costs only modestly higher than traditional offshore geographies. These costs are typically significantly lower than nearshore locations with close proximity to the Americas.

2. Sophisticated and Stable Business Environment

Plain and simple, South Africa makes it easy to do business. The regulatory structure encourages investment. It has a sophisticated and stable business environment along with an infrastructure that facilitates high-quality business offerings to diverse clients. It has a world-class banking industry and an innovative technology infrastructure with widespread fiber optic network connectivity. The government and customer care outsourcing industries have collaborated to create a supportive environment to bring new jobs to the country while attracting businesses and investors.

3. Strong and Educated Labor Market

With a population of 60 million people and more than 30% unemployment, especially with the young adult population, South Africa offers a strong labor market with a high demand for jobs. It is estimated that more than 250,000 people in South Africa work in the customer care and outsourcing industry with significant room for growth to attract and retain more talent.

The South African labor market is also well educated, with high-quality primary, secondary, and university opportunities along with a number of trade schools and two-year colleges that provide talent to the customer care and outsourcing industry. Indeed, South Africa offers a valuable opportunity to attract and retain high-quality talent.

4. A Well-Distributed Population

Although there are three primary metropolitan areas in South Africa (Johannesburg Durban, and Cape Town), the population is well distributed throughout the country with several second and third-tier cities that also offer work-in-office and work-at-home employment opportunities.

5. Native English and Diverse Language Capabilities

Finally, South Africa offers strong language capabilities to build human connections throughout the customer journey. English is the native language for millions of South Africans and it is the primary language for education and business in South Africa.

Similar to the British accent, the South African accent is also a strength that many customers find appealing. Moreover, the significant European influence in South Africa presents a wide availability of other languages such as French, German, Dutch, Portuguese, Indian, and more. Because of its stability and opportunities, South Africa also attracts employees from neighboring African countries where other European languages are spoken, further increasing the language offerings and capabilities of its diverse workforce.

How South Africa Has Evolved in CX Delivery

For the past 15-20 years, South Africa has served as a well-established outsourcing destination, primarily for the European market with excellent connectivity to the United Kingdom, the Netherlands, and Germany.

About 10 years ago, U.S. companies began exploring possibilities in South Africa. Over the past five years, the customer care industry in South Africa has taken off in global markets, particularly in the U.S. and Australia.

South Africa has emerged as a destination for offshore English language customer care services and in 2021 it was named the most favored offshore CX delivery location according to the Ryan Strategic Advisory Annual Front Office BPO Omnibus Survey, placing first out of 53 locations.

Today, a diverse set of global companies offer CX from South Africa, both in-house and outsourced. There’s a good balance of South African owned outsourcing firms of various sizes in locations throughout the country. This is combined with the presence of large global entities. The growth continues as new investors, companies, and outsourcers are attracted to South Africa.

Providing CX Across Industries

Although there is a presence of diverse and emerging industries turning to South Africa for CX support, there is a particularly strong presence and long-standing expertise in financial services, travel, tourism, and retail.

Much of the CX talent brings an expertise in the travel and retail industries because of the significance these industries play in the South African economy. That said, the well-educated South African labor market is skilled in providing excellent customer support to diverse clients, ranging from European retailers to local South African utility providers.

Who Should Set Up Shop in South Africa?

Although South Africa is not the right fit for CX delivery for every situation in every company, it offers many benefits for a variety of companies across industries. To evaluate whether South Africa is the right option for any given company, Ron recommends considering a few key questions.

Where Do You Want to Serve Your Customers From?

Consider onshore, nearshore, and offshore benefits. Cost, language, outsourcing providers, education, and technical capabilities are all important elements to evaluate when choosing the best location for CX offerings.

If South Africa Is the Right Fit, Should You Build, Buy, or Partner With a BPO?

If a company decides that South Africa is a viable destination for their CX offerings, the next consideration is whether they will be providing internal or outsourced CX. It is important to assess the marketplace and identify the right strategy for each operation.

Is it worth buying in South Africa to set up internal operations, as multiple Fortune 500 companies have done to service their own customer? Or, is it better to partner with an existing outsourcing firm that already operates in South Africa? This option offers varied choices, from local and regional to global players.

It is also important to consider location within South Africa, with each of the three major metropolitan areas offering different strengths and opportunities. Through it all, Ron and his team at Lookout Advisors help clients identify the right partners and vet them to determine the best fit.

Impact Sourcing to Support Communities

As part of the considerations in determining the best location and outsourcing options for CX, it is important to factor impact sourcing into the equation and its ability to create a positive effect on local communities through jobs, infrastructure, opportunities, and the economy.

Impact sourcing is the concept that CX is more than simply opening a contact center and employing individuals with competitive wages and fulfilling careers. There is a broader impact beyond those direct employees, and the ripples are felt by their families, their communities, and beyond.

This broader impact is important to consider as part of socially responsible business practices. BPOs can empower global brands to improve outcomes by providing career development and growth opportunities to individuals in areas with limited employment prospects. This carries significant weight in South Africa, for example, given the high unemployment rates and the need for work.

This impact is evident in an example Ron shares from one of his clients who is investing in a small rural city outside Kruger National Park in northeast South Africa. Although a fairly rural area, it offers several sizeable population centers well-suited to customer service with an educated workforce and strong English language proficiency. Opening a contact center in this area generates career and job opportunities for the community. But the impact extends beyond the employees and their families to include such things as technology infrastructure improvements. The city center, for example, didn’t have fiber optics but with the new contact center locating there they will have fiber connectivity in the city center, creating new technology opportunities for the entire community.

What Ron Does for Fun

Fun is all about family for Ron. With a large extended family and four children of his own (one at home and three dispersed throughout the United States), Ron enjoys much of his free time with his family.

He also has a great affinity for travelling and experiencing different cultures and places. His travel expeditions have been limited with COVID, but he looks forward to more travel in the future.

He’s also always up for the occasional run. Learn more about iQor’s digital transformation capabilities.