Apex America is a regional call center company in Argentina that has seen good growth in the past four years. It has gone from a headcount of 3,300 to 4,300 over that period, with annual revenue growth of 15%. But like many industry firms of its size in Argentina, Apex is now navigating its way through the pitfalls of an increasingly mature call center market that leaves little room for expansion.
“There is a lot of competition,” said company CEO Patricio Ríos Carranza. “Unlike in Brazil or Chile, the market is very mature, and all the operations of our clients are already outsourced. So the market is in the last stage. There is no huge possibility to grow in terms of the call center business.”
The Cordoba-based company, which was founded in 2003, is pushing towards value-added services and BPO, which has gone from roughly 0% of Apex’s revenue in 2012 to 15% in 2015. Within a few more years, Carranza expects that segment to exceed 30% — and hopes for 50% — all in an attempt to deepen its relations with its current clients and find new ways to continue growing in a country where there aren’t a lot of new clients to be had.
“That’s why we are diversifying our business and going to services with more value added,” he said. “We have to include technology in our services. Mainly today, our services are people — we provide hours of people — and we think that in the future we will have to include technology to add value and improve the customer experience.”
In addition to typical back-office services, one new area is helping clients manage their relationships with stores and vendors. Apex has 20 clients in region, mostly large companies, and it had previously done just the customer care side. But adding in the stores was a natural evolution and has taken a large burden off the shoulders of its clients.
Handling social media accounts for clients is another new vertical for Apex, although it remains in the nascent phase in Argentina. “Social media is one of the segments that is growing,” said Carranza. “It’s still a challenge because the companies are not yet mature to outsource all of the social media aspects that they are facing, but it’s a growing segment.”
This struggle to adapt or stagnate is far from unique to Apex. This has been a necessary shift for all companies that want to survive in the country. “Argentina, maybe five years ago, reached a high level of maturity in the contact center industry, and this level of competition forces the major outsourcers to look to diversify their service offerings,” said Sebastian Menutti, Latin American ICT industry analyst in Frost & Sullivan‘s Buenos Aires office. “So they’re looking to offer more complex services, more back office, more financial services, more IT-based services.”
Menutti says that this has presented both challenges and opportunities for small to mid-sized firms. While it makes it hard for them to compete on price in tradition call center business, their agility also allows them to switch course more quickly and become specialists in delivering back-office functions or newly emerging areas of expertise. With time, that allows the provider to become not just a company that fulfills a need but more of a true business partner.
“It’s a better competitive strategy,” said Menutti. “If you’re only going to use the market to take new clients, you’re going to have to compete with price, and the business margins are going to be reduced eventually. Because if you have a competition solely based on price then companies are going to go as low as they can. But if you, as a BPO provider, take over more complex services and understand more … you are eventually really a part of the client’s business objectives goals.”
Carranza hopes that Apex can make the transition. He was recently named CEO of the year in Cordoba by the local publication Punto a Punto, and since returning to his hometown in 2006, after a decade working in the capital of Buenos Aires, he has helped his company get a foothold in seven countries in the Americas. In addition to diversifying the companies offerings, Apex is trying to further expand its reach in Brazil, Chile, and Central America, where it services the U.S. market from El Salvador and Honduras. Carranza even mentioned tentative plans to enter Colombia for the first time in the upcoming year.
This is all part of the long-term strategy, but he foresees better things in store soon in Argentina as well. The government is changing, and he thinks the economy will turn around and offer more opportunities. And as it does, he believes that Apex’s new focus on value-added services will allow it to continue to thrive in a saturated market. “The call center business is not declining, but it is not growing,” said Carranza. “So you have to think of other ways to keep growing.”