ISG Provider Lens™ Contact Center - Customer Experience Services - Digital Operations - Brazil 2021

Brazilian Contact Centers Sector: A Journey Between Tradition and Uberization

The contact center sector in Brazil has grown rapidly during the COVID-19 pandemic despite the overall economic conditions. The Brazilian Association of Teleservices (ABT) predicts that the sector will account for a revenue of more than R$13.5 billion in 2021.

Contact center outsourcing is relevant to many sectors in the region and those that have availed related services have benefited during the imposed restrictions of the crisis. Enterprises in some sectors have been confronted with a near or de facto shutdown in economic activities, while others experienced a never-seen boost. For instance, ecommerce gained traction while all kinds of delivery services witnessed high demand.

Given the restrictions of movement during the pandemic, service providers had to address various issues such as customer needs for brick-and-mortar stores. Besides healthcare, public-related issues such as payment requests for unemployment relief or information about changed bureaucratic processes also contributed to the high workload of contact centers.

Service providers in this space have responded to the diversity of demand. Some have focuses on increasing their revenue and market share by conquering new logos beyond traditional telecom and financial services markets. Others that were already struggling before the pandemic were overwhelmed with the new demands and lost clients to other service providers.

Concurrently, client acceptance of inadequate service has also differed between the two waves of the pandemic. During the first wave in March 2020, most enterprises had overlooked missed service-level agreements (SLAs). From January 2021 onwards, they have been less accommodating, thus increasing the pressure on service providers.

Technology adoption and business models

The pandemic has accelerated the adoption of new technologies and digital transformation in Brazil like the rest of the world. Real omnichannel adoption, cloud migration and automation through robotic process automation (RPA) and the implementation of bots with different levels of AI have been the focus areas projects for service providers. With the push for automation to handle large workloads, Brazil has turned into the second-largest market in terms of the number of chatbot and voicebot deployments.

Given the weakness of Brazilian Real (R$) compared with strong currencies, many service providers have adopted a hybrid deployment strategy, opting for the most cost-effective solutions by partnering with global technology providers. They are also collaborating with local providers that seldom develop solutions on an open-source basis.

With the newly established work-from-home model, most service providers are investing heavily to protect their operations against cyberattacks based on current priorities and workloads. In early 2020, they were focused on infrastructure issues such as rolling out office equipment and VPN-secure connections to the homes of their agents. They are now investing in deploying security measures such as sophisticated face recognition systems or other authentication methods. However, some security measures, such as a second 360-degree camera to enforce a clean desk policy, are not in line with local labor guidelines and therefore cannot be deployed in Brazil.

Lei Geral de Proteção de Dados (LGPD), the data protection act in Brazil, akin to the General Data Protection Regulation (GDPR) in Europe, came into effect in May 2021. In the last few months, companies had to ensure that their operations comply with the LGPD. The guidelines not only apply to data handling but also will have a strong impact on business models.

The region has witnessed cross-selling or sales campaigns, often based on unauthorized or leaked mailing lists over the years; some companies even based their business model entirely on such unchecked behavior. The enforcement of the LGPD is expected to curb such instances. The law penalizes up to 2 percent of gross annual sales, which may reach a maximum of R$50 million. The first batch of companies to be fined are from the financial sector because of the unconsented use of data to sell bounded loans to retired consumers.

Channels

In 2020, digital channels have gained significant traction, but voice continues to remain a preferred medium in Brazil. The growth of digital channels is due to the expansion of the base of digital-native consumers, restrictions of the pandemic situation, increased number of offerings and growing popularity of ecommerce. This will increase the overall time spent by locals online, an area where Brazil is ranked second highest globally.

Voice is gaining traction due to the growing complexity of interactions with contact centers and customer preference for human touch. Chatbots and voicebots are popular, but these solutions should offer better monitoring and controls. Service providers seem to be focused on increasing the number of deployed bots rather than investing in quality to achieve real business outcome from bots.

WhatsApp is a major success in Brazil. The possibility of asynchronous conversation, together with features such as free calls and customer control over who can contact them has made smartphones a WhatsApp endpoint, enabling them to ignore unsolicited calls or SMS. However, to explore this channel commercially, service providers should adhere to the stringent commercial use policy and technology-related guidelines. As WhatsApp is an inbound channel, outbound communication should occur through other channels such as self-service portals, chats and SMS, which requires a functional omnichannel solution.

Work from home

The pandemic has compelled service providers to make a rapid transition to work-from-home models to sustain their business. The contact center services sector was able to quickly deploy technologies and bring about stability in operations, and now the mid-and long-term effects of remote working is observed. While some service providers have experienced increased productivity, others claimed that in outbound calls, for example, or in more complex operations such as collections, productivity does not reach the same performance levels as brick-and-mortar operations. Some service providers also reported that the onboarding and training of the workforce, typically younger resources that are beginning their work experience with the work-from-home model, is somehow challenging. In addition, negative side effects such as fatigue and depression often due to social isolation has been observed, requiring serious efforts for monitoring and taking care of the mental health of employees.

Most players plan to establish work from home as a permanent model. The preference, in terms of ratios, for work-from-home/brick-and-mortar range from 20/80 to 40/60, respectively. The financial services sector is returning to the office space primarily due to security concerns, while other sectors prefer the work-from-home model. The preference of agents varies depending on location. In areas outside big cities, most opt for brick-and-mortar setups, allowing them to commute easily commute up to four hours/day.

The gig economy or uberization of services, often referred to in Brazil, is advancing. However, security concerns and training/onboarding issues are still restricting a wider adaptation of this deployment model.

Customer journey mapping and social media

Most service providers have taken efforts to understand their customer journey and interpret and map interactions accordingly to offer a better customer experience. However, they face some challenges in terms of integration with back-office applications of clients. Often, even basic data such as master data is not integrated and remains in different applications, affecting the ability to offer a seamless and 360-degree service to customers. In this context, omnichannel is an appealing promise, but not as relevant as addressing a customer’s problem despite the channel used.

WhatsApp, Facebook, YouTube, and Instagram are among the widely used channels in the Brazilian landscape. Tiktok, Discord, and Twitch are also growing and are particularly popular with the young population. Social media channels are not frequently used to address issues about companies or brands. Customer grievances are voiced through the widely known Reclame Aqui, a reputation tracking service. The wide reach of the portal enables customers to address issues effectively, doing away with basic IVRs, untrained bots and agents.

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