When selling regular bicycles or e-bikes, the bicycle repair shop in your neighborhood is increasingly out of the game. This shift to online – also towards direct sales – is accompanied by the necessary turbulence, also on the side of customer contact. Part 2 in a series about direct to consumer (D2C) and customer contact.

Has the role of the traditional 'man in the middle' been played out? In more and more sectors, brands and manufacturers are doing business directly with consumers: through their own channels or via platforms. This also applies to the two-wheeler sector. 'New' two-wheeler brands such as Stella and Rad Power Bikes (only e-bikes), VanMoof and Cowboy (design) and Swap (lease bikes) primarily sell online. Accell (known for considerably older brands such as Batavus, Sparta and Koga) was hit by supply problems, but is now also benefiting fully from the exploded sales figures. The long-established brands used to mainly deliver through a dealer network, but almost all of them have now also discovered the online channel for direct sales.

Distinctive capacity for fast growers

The online bicycle business is currently booming, following the growth in e-commerce. Trade organization Bovag expressed the expectation three years ago that in 2028 twenty to forty percent of the now 2.000 local bicycle shops will have disappearedSwapfiets, known for its 'grandma bikes' with the blue front tire, already has 220.000 users paying a monthly lease fee (starting at around 17 euros). Swap is now active in more than 50 cities across 7 countries. Since 2018, revenue has roughly doubled every year, but so far, no profit appears to be being made. For Swap, this is not immediately a problem, given the financially strong investor Ponooc, part of PON Automotive. Like Stella, Rad Power Bikes, and VanMoof, Swap has its own in-house customer service team. The aforementioned brands will reach around 100 FTEs in this department within the foreseeable future, according to inquiries made by Ziptone.

These relatively young two-wheeler brands all face the question of whether the rapid, primarily online-driven growth can be successful if processes such as customer service remain in-house. The underlying question is of course: what do these companies want to distinguish themselves with: the quality of their iron steed or the service? VanMoof has outsourced production to partners and relies primarily on online sales abroad, says VanMoof founder Tacos Carlier. How will these companies - with internationalization - organize their multilingual service apparatus?

Everything in-house

Specialists such as Stella and VanMoof (both have been active for about ten years now) have all processes in-house (from assembly to maintenance and service), so that other parties, such as dealers and repairers, do not play a role and can be purchased inexpensively from suppliers. In addition, a brand that keeps everything in its own hands can leave its mark on the customer experience – but that process must of course run smoothly.

Because every bicycle - including e-bikes - needs maintenance, there are extensive opportunities for loyalty in this business. The battery of e-bikes will also be a reason to change bicycles in the coming years, given the rapid development of technology.

Catching growth spurts

A company that has not yet experienced strong growth often has little in-house experience with making the company flexible – in the first phase, all attention has often been focused on perpetuating processes. Coping with growth spurts – which you then feel in all processes – can then be extra difficult. This may relate to optimizing IT – a startup usually does not immediately have a cloud-based omnichannel IT landscape in-house – or to the customer service device that may need to become multilingual.

At the same time, these fast growers face completely different challenges: digitization, investing in self-service so that volumes remain manageable, investing in new technology such as the connected bike with which you can offer new services such as theft and detection services. Or what about predictive maintenance? All these developments require data flows in all directions and the broadening of competencies in, for example, customer service – think of technology knowledge instead of just technical knowledge. An online company that has a clear customer-oriented DNA and wants to internationalize will discover that running foreign sales/service operations involves more than just opening offices.

VanMoof: “huge growth”

Justus Tobergte, Head Of Customer Support at VanMoof, recognizes the challenges listed. The innovative and exclusive VanMoof has been around for more than ten years and has been producing e-bikes exclusively for three years. Tobergte confirms that the electric bicycle market has grown enormously, especially since the corona pandemic. “This market has only become more relevant since the epidemic. Not only has the mindset of consumers about electric bicycles changed, people are also looking for new ways of commuting to avoid public transport.”

Sales at VanMoof also went through the roof last year. In April 2020, the brand launched its most recent model; sales and customer service volumes increased by more than 200%. The organization tripled in size. In the first four months of 2020 alone, VanMoof sold more bikes than the previous two years combined.

Rad Power Bikes: “Exponential Growth”

The American Rad Power Bikes also likes to keep everything in its own hands - not only customer contact, but also the entire supply chain around the e-bikes. Geert Fiesler, customer service manager: “This strategy has been set out by our CEO from the start and external capital has also been attracted for its roll-out. We went from zero to $300 million in revenue in four years. We expect this exponential growth to continue in the coming years. In order to realize this, a large external financial injection was recently made. We are recruiting massively worldwide. The organization must continue to radiate its own Rad Power Bikes culture. The choice was therefore made to immediately bind employees to us through their own contracts.”

Europe is also scaling up considerably Rad Power Bikes. The customer service operation squeaks and creaks a bit, says Fiesler, but that's understandable when you're growing almost 400 percent year-over-year. The demand for e-bikes is greater than the supply. The entire industry has these challenges. “Customers especially find the latter annoying, there are no complaints about our service. The European organization is increasing to 50 to 60 employees and will double again next year. Incidentally, only a few Dutch people work there, it is mainly many expats from different countries who have a thing for bicycles. By hiring employees ourselves, we can properly monitor the culture.”

Make or buy: trade-offs

A brand such as VanMoof attracts a predominantly young audience with its design e-bikes and wants to do so worldwide. What are the consequences and considerations for the organization of customer service at VanMoof?

Tobergte: “We are strongly oriented towards 'in-house': from R&D to production and from sales to customer support, including so-called bike doctors, self-service and an app. This choice was made because VanMoof, as a brand, likes to stay in control of everything. We want to help our customers ourselves if there is anything, and that is also something our customers expect from us. This also ensures short feedback lines with customers – many of whom have been loyal to our brand for years – and keeps us agile. For example, we can train our people – whether they are bike hunters, bike doctors or support staff – very intensively. So outsourcing is not on our roadmap.”

By also keeping production in-house, the company is not dependent on changing priorities at suppliers who have to serve several customers.

Scaling up

As mentioned, VanMoof is working on international expansion. Worldwide, the physical presence with brand stores must gradually increase - there are now in Amsterdam, Berlin, London, New York, Paris, San Francisco, Taipei, Tokyo and Seattle. The customer service organization in Europe works in five languages. There is a Japanese team in Japan and a dedicated team in the US. Tobergte: “The fact that we do everything internally doesn't mean we don't look outwards. We have to stay ahead in the market, so we are always looking for solutions that can help with this. In the meantime, we also have to be able to handle the rising volumes, so we are also looking at digitization and self-service and the use of channels such as chat or a chatbot. We want to scale up with this combination.”

Smarter bikes: more self-service

Connected cars and smart insurance that monitor your driving behavior have been common in the automotive industry for some time now. VanMoof's e-bikes attracted attention because of the use of anti-theft tracking technology in combination with so-called bike hunters who try to retrieve stolen e-bikes. What lies ahead at VanMoof and what will be the impact on customer service?

“One of the things we want to improve is that customers can solve more online themselves when it comes to technical troubleshooting. Now people still have to call and send photos or videos to us. Ultimately, we want to move towards predictive maintenance. How long that will take and what is possible, we will see in the near future. For example, we already have a lot of data about the battery, but the question is how the user can benefit from this. “One thing is certain, and that is that we are always innovating and our e-bikes are getting smarter.”

Risks of doing it yourself

Our country's two-wheeler industry is predominantly innovative and partly already 'digital' or even 'direct to consumersgone. For various companies, scaling up – due to the rapidly developing market, but also due to their own growth strategy – sometimes leads to problems in the customer experience. What are the risks of the choices made?

Loek de Wijze, business development director at Teleperformance, first of all understands the choice to keep customer service in-house in a start-up phase. “That is beneficial, especially if the organization is still small and customer service can, for example, be close to the sales, logistics and finance department, for short and informal lines of communication. But as organizations grow, the degree of specialization increases in virtually all business functions. When scaling up, you have to look for standards as well as implement optimization steps – think of first time fix. In customer contact, matters such as keeping training courses and knowledge bases up to date, developing quality standards in CX, choosing and using software applications for planning, data analysis and certainly also customer satisfaction research to see what the customer says about your customer service. And if you want to quickly implement things such as self-service or robotization, it helps if you don't have to reinvent the wheel yourself.”

Add value

Scalability in customer contact is therefore something different from your customer service operation growing one-on-one with the turnover, De Wijze explains. “The costs for customer contact are mainly related to personnel. If you want to keep your margin healthy while growing, you will have to do everything possible to automate unnecessary and repetitive contacts in a customer-friendly manner. And to organize customer contact in such a way that employees only handle those contacts that are really valuable and complex.”

In conversations with contact center managers, it often comes back that after a flying start things have to go less well before the question of make or buy is asked (again). “It is no longer about teething problems – customers are still willing to accept them at a startup – but about serious growth problems at scale-ups,” says De Wijze. “And consumers generally accept that less easily. Examples are increasing response times, repeat traffic, the creation of work stocks and an increase in dissatisfaction on social media. You see that producers then respond to questions from customers with statements such as 'it will take a little longer than you are used to from us'. But you are actually saying that customer service cannot keep up with the rapid growth.”

“It also appears that the opening hours that a customer expects are difficult to achieve: the customer service is often closed in the evenings and weekends. In a physical store you will not easily see customers waiting in the store while the staff has already gone home. Ultimately, the customer's assessment of the service is the only truth.” (zip tone)

Customer Experience, Featured Teleperformance