Last week in Germany

I didn't have much of a chance to write last week as I was in Germany and very busy with meetings. I like Germany a lot and was very interested to be in Munich for the first time.

Germany is an interesting example of a country where most businesses understand that they cannot compete on cost internationally. Instead, they have to compete on the value and innovation of their products. I've written previously on how that weakening dollar is causing problems, (notably for the Canadian contact centre industry "Why Canada might illustrate some coming European Contact Centre trends"), but the impact on euro area businesses is also significant.

You might think that while Germany would be affected by lower manufacturing work moving to lower cost locations, service would not move as well. The German language is spoken primarily in high cost countries (Germany, Austria, Switzerland) and without high quality language skills telephone service is difficult.

The reality, though, is slightly different. Telephone service is important, but e-mail is also of importance. Internet and branch are major channels for German organisations to interact with customers and so the remote service route for these channels can be as much e-mail as traditional telephony traffic. Although Voice over IP and Skype have generated interest, most German organisations I've encountered are most interested in small to medium contact centres with significant e-mail capability. The important thing about e-mail is that as the interaction is not real time, and so it could potentially be off-shored to an agent with much more limited German than would be appropriate for a voice call.

In a market dynamic like this, the only way to compete is not on cost of agent but on value and draw on manufacturing for lessons. In manufacturing automation has been reducing the number of workers per task since the industrial revolution and service industries are heading that way. Automation and pre-scripting for e-mail responses makes an agent much more productive, as does blending voice and e-mail so agents can manage both. In the same way that production lines reduced the demand for craftsmen, so service management can be industrialised. At a more strategic level quality of service is a brand value, so competing on reputation means the quality of the agent can be important as a brand value for what it tells customers about your organisation.

I've written a little about the industrialisation of service previously in the "Contact Centres, Process and Six Sigma", and I suspect it's a subject I need to cover in more depth.