Diversification
for Activities of call centres (ISIC 8220)
Diversification is highly relevant and critical for the 'Activities of call centres' industry. The sector is undergoing profound transformation driven by technological advancements (IN02) and shifting customer expectations. Relying solely on traditional voice support is unsustainable given the...
Why This Strategy Applies
Entering a new product or market beyond a company's current activities to reduce risk and capture new revenue streams.
GTIAS pillars this strategy draws on — and this industry's average score per pillar
These pillar scores reflect Activities of call centres's structural characteristics. Higher scores indicate greater complexity or risk — see the full scorecard for all 81 attributes.
Diversification applied to this industry
The call center industry faces an existential threat from technological disruption and market saturation, making strategic diversification into specialized, tech-enabled BPO services and niche markets not just a growth opportunity but a critical and urgent mandate for survival and sustained profitability. Success hinges on deep specialization, monetizing internal tech expertise, and proactive talent reskilling.
Elevate BPO to Integrated Business Function Ownership
Market saturation (MD08: 4/5) and margin pressure (MD03: 3/5) in traditional call center services demand a strategic shift from task-based outsourcing to integrated ownership of client business functions. This requires extending value-chain depth (MD05: 4/5) into areas like supply chain management, compliance, or finance operations, moving beyond simple process execution to strategic partnership.
Develop industry-specific centers of excellence capable of end-to-end management of complex client business processes, investing in vertical market expertise and the necessary regulatory compliance frameworks to deliver comprehensive solutions.
Productize Internal AI/Automation Expertise for Clients
Internal investments to overcome technology adoption and legacy drag (IN02: 3/5) in AI and automation create a valuable, transferable skillset. This intellectual property can be monetized by offering 'AI implementation and management' as a service, leveraging the firm's innovation option value (IN03: 3/5) to generate new, high-margin revenue streams beyond traditional BPO.
Establish a dedicated business unit to consult with clients on AI/RPA strategy, deploy automation solutions, and provide ongoing managed services, leveraging proprietary tools and expert staff developed for internal efficiency gains.
Mitigate New Market Entry Risks with Prudent Capital Strategy
While geographic and vertical market expansion offers critical diversification against market obsolescence (MD01: 3/5), entry into new regions or highly regulated niches is complicated by high structural currency mismatch (FR02: 4/5) and severely limited risk insurability (FR06: 1/5). This necessitates a conservative financial approach to new ventures.
Focus new market entries on politically stable economies with convertible currencies, utilizing robust internal hedging mechanisms and a self-funding or highly de-risked capital allocation strategy to minimize exposure.
Reskill Agent Workforce for Advanced Digital Interactions
The pervasive threat of market obsolescence (MD01: 3/5) for basic voice services means traditional agent roles are diminishing. Diversification demands transforming agents into higher-value digital specialists proficient in multichannel engagement, advanced data annotation, sentiment analysis, and social media management, addressing the need for enhanced talent utilization.
Implement comprehensive, mandatory reskilling programs focused on digital communication platforms, advanced analytics tools, and AI-assisted workflows to transition agents into digital operations and data labeling roles.
Forge Strategic Tech Partnerships to Accelerate Innovation
Overcoming internal technology adoption and legacy drag (IN02: 3/5) while capitalizing on innovation option value (IN03: 3/5) can be expedited through external collaboration. Partnering with specialized software vendors or AI startups offers a faster route to integrate cutting-edge capabilities than sole internal development, especially given the low R&D burden (IN05: 1/5) suggesting a focus on integration rather than fundamental research.
Actively pursue strategic alliances and joint ventures with leading AI, automation, and analytics solution providers to co-develop or integrate specialized tools, rapidly expanding service offerings without incurring extensive internal R&D costs.
Strategic Overview
The call center industry (ISIC 8220) faces significant challenges from market obsolescence (MD01) due to automation and changing customer preferences, coupled with sustained margin pressure (MD03) from intense competition. Traditional voice-based support is increasingly being replaced by self-service and digital channels, leading to shrinking demand for basic services. Diversification, therefore, is not merely a growth strategy but a critical survival imperative for many call centers.
By expanding into broader Business Process Outsourcing (BPO) services, leveraging advanced technologies like conversational AI, or targeting new geographic and industry verticals, call centers can mitigate these risks. This strategy allows firms to move up the value chain, capture new revenue streams, and reduce over-reliance on commoditized services, thereby addressing the talent reskilling imperative (MD01) and competitive pressures (MD07). It also helps stabilize revenue streams against currency volatility (FR02) if geographic diversification is pursued.
4 strategic insights for this industry
Mitigating Market Obsolescence and Margin Pressure
Diversification into specialized BPO functions (e.g., data analytics, finance and accounting, legal support) or complex technical support services allows call centers to move beyond basic customer service, directly addressing 'Shrinking Demand for Basic Services' (MD01) and 'Sustained Margin Pressure' (MD03). These specialized services typically command higher margins and offer greater differentiation.
Leveraging Technology for New Service Offerings
Investing in and developing expertise around conversational AI, machine learning, and robotic process automation (RPA) enables call centers to offer 'AI implementation and management' services to clients. This addresses the 'Technology Adoption & Legacy Drag' (IN02) challenge by transforming it into an opportunity, and also helps address the 'Talent Reskilling Imperative' (MD01) by creating new roles for agents managing AI solutions.
Geographic and Vertical Market Expansion
Targeting new geographic markets (e.g., underserved regions, countries with stable economic conditions) or specific industry verticals (e.g., healthcare, fintech) allows call centers to reduce reliance on mature, saturated markets (MD08) and mitigate 'Structural Currency Mismatch' (FR02) if expanding internationally. This also helps in navigating diverse regulatory environments and cultural expectations.
Optimizing Talent Utilization through Cross-Training
By diversifying service offerings, call centers can better utilize existing agent talent through cross-training for new, complex tasks, combating 'Agent Under/Over-utilization' (MD04) and providing career development paths. This reduces the 'High Recruitment & Training Costs' (CS08) associated with constantly hiring for new, distinct roles and makes the organization more resilient.
Prioritized actions for this industry
Develop and Market Specialized BPO Service Lines
Leverage existing infrastructure and operational expertise to offer higher-value services like back-office processing, content moderation, or data analytics, moving beyond transactional customer service. This directly addresses 'Shrinking Demand for Basic Services' (MD01) and improves 'Sustained Margin Pressure' (MD03) by offering premium services.
Invest in Conversational AI and Automation Integration Capabilities
Build internal expertise or partner with AI firms to offer services in implementing, managing, and optimizing AI-powered customer interactions (chatbots, voicebots). This positions the call center as a technology partner, addresses 'Technology Adoption & Legacy Drag' (IN02), and creates new revenue streams.
Conduct Strategic Market Scans for Niche Geographic or Industry Verticals
Proactively identify and enter less saturated markets or industry sectors (e.g., specialized healthcare support, legal tech BPO) where competition is lower and demand for specific services is higher. This mitigates 'Structural Market Saturation' (MD08) and reduces competitive 'Pressure on Pricing and Margins' (MD01).
Establish a Dedicated Innovation Hub or Skunkworks Team
Allocate resources to research and pilot new service offerings, technologies, and business models. This formalizes the diversification effort, addresses 'Resource Allocation for R&D and Pilot Programs' (IN03) and ensures a pipeline of future growth opportunities.
From quick wins to long-term transformation
- Identify existing agent skills transferable to new service lines (e.g., data entry, basic transcription) and offer these to current clients as value-added services.
- Pilot a new service offering with a single, willing client to gather feedback and refine processes.
- Form cross-functional teams to brainstorm and research potential new market segments or service categories.
- Invest in specific software, training, and certifications for identified high-growth BPO services (e.g., Salesforce admin, RPA development).
- Formalize partnership agreements with technology providers (e.g., AI platforms) or specialized consultancies to gain expertise quickly.
- Develop comprehensive marketing and sales strategies tailored for new diversified service offerings.
- Establish dedicated business units or subsidiaries for significantly diversified operations to ensure focus and clear accountability.
- Consider strategic mergers and acquisitions to acquire niche capabilities or market access in new areas.
- Expand internationally to leverage different talent pools and access new customer bases, managing 'Structural Currency Mismatch' (FR02).
- Lack of clear strategic focus, resulting in scattered efforts and diluted resources across too many new ventures.
- Underestimating the investment required in technology, talent, and marketing for new service lines.
- Failure to effectively communicate the value proposition of diversified services to existing and prospective clients.
- Neglecting the core business while pursuing diversification, leading to decline in existing service quality.
Measuring strategic progress
| Metric | Description | Target Benchmark |
|---|---|---|
| Revenue from New/Diversified Services | Percentage of total revenue generated from services introduced in the last 2-3 years or from non-traditional call center activities. | Maintain >15% annual growth in diversified service revenue; aim for 30%+ of total revenue from diversified services within 3-5 years. |
| Customer Acquisition Cost (CAC) for New Services | Cost to acquire a new client for a diversified service offering. | Achieve a CAC for new services that is 20% lower than traditional services, or a CAC payback period of less than 12 months. |
| Gross Margin of Diversified Services | Profitability percentage of the new service lines after accounting for direct costs. | Aim for gross margins at least 5-10 percentage points higher than traditional voice support services (e.g., >35%). |
| Employee Skill Development Rate | Percentage of agents cross-trained or upskilled in new areas relevant to diversified services. | Increase by 20% annually; ensure >70% of agents have skills applicable to at least two service lines. |
Software to support this strategy
These tools are recommended across the strategic actions above. Each has been matched based on the attributes and challenges relevant to Activities of call centres.
Capsule CRM
10,000+ customers worldwide • Includes Transpond marketing platform
Transpond's email marketing and audience tools support proactive brand communication that builds customer loyalty and reduces churn-driven reputational fragility
Cost-effective CRM for growing teams — manage contacts, track deals and pipeline, build customer relationships, and streamline day-to-day work. Paired with Transpond, a dedicated marketing platform for email campaigns and audience management.
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HubSpot
Free forever plan • 288,700+ customers in 135+ countries
Deal intelligence, win/loss analytics, and pipeline data give sales teams the evidence to defend price with ROI proof rather than discounting reactively against commodity competition
All-in-one CRM and go-to-market platform used by 288,700+ businesses across 135+ countries. Connects marketing, sales, service, content, and operations in one system — free forever plan to start, paid tiers to scale.
Try HubSpot FreeAffiliate link — we may earn a commission at no cost to you.
Other strategy analyses for Activities of call centres
Also see: Diversification Framework