Rising labor costs, narrow margins, and a beckoning offshore market. It sounds like a "red ocean": the pond where small to mid-sized facility contact centers fish. But a tour of Ziptone reveals that agility, focus and courage are their survival strategy and part of their competitive advantage.

 

With sizes ranging from a few dozen to around 250 FTEs and revenues of one to ten million euros, smaller facility contact centers look with envy at what they call "call factories" and "kilo-bangers." These oil tankers are countered by speedboats, which, as smaller players, also face a transformation. Will they or will they not offshoring? Will they choose to specialize? Will they dare to compromise on their P&L to keep loyal customers on board?

Smaller facility contact centers demonstrate significant agility, as evidenced by conversations Ziptone had with six customer contact service providers: Quality Contacts, DIRECT customer contact, Spangenberg Group, YellowRock, The Good Agency, and ContactWorx. We spoke with these six companies about six themes: (click on the theme to go directly to it)

1. The battle for market share: market focus
2. The battle for returns: labor costs
3. The battle for advantage: offshoring
4. The battle for the customer: innovation
5. The battle for advantage: scale
6. The future

1. The battle for market share: market focus

Should you tackle everything that comes your way, or should you specialize? Or do you find added value in small-scale operations and close collaboration?

 

Rob Wennink, Managing Director of DIRECT customer contact (approximately 100 employees, revenue around €6 million), considers his company hands-on. “We choose to increasingly specialize in those sectors where we truly excel. Domain knowledge gives you an advantage and increases the chance of gradually attracting more business from a client. Finding new clients is becoming relatively easier. I think that's due to our strong focus on specific submarkets.” DIRECT customer contact focuses on submarkets such as the installation sector, e-commerce, holiday parks, and healthcare.

Wennink also sees the company's activities gradually shifting towards consultancy. "We'll increasingly help our clients, for example, get their data management in order. This also increases the possibilities for automation, allowing us to reduce our own role somewhat."

Marcel Decker, Director of Strategy and Innovation at ContactWorx (currently 85 employees, revenue approximately €2,5 million), focuses on Dutch-speaking customer contact for organizations that "want to do customer contact well and not just look at costs." Therefore, ContactWorx no longer wants to do business with large telecom or energy suppliers. "Our offer is that we think along with our clients in every possible way: from processes to clients' marketing campaigns. That's why we also provide consultancy." ContactWorx doesn't specifically choose to specialize.

Spangenberg Group (75 employees, turnover almost 3 million euros) is a typical family business from Maastricht that runs a facility contact center as well as offering consultancy services. Floris Spangenberg ("final boss") doesn't specialize in specific sectors, but does focus on small and medium-sized businesses. The company works for both several larger clients like Fleurop and Domino's, as well as smaller organizations. Sometimes small online stores initially hire half an FTE, according to Spangenberg. This limited size requires extra attention, but also offers the potential for growth: "The part of the market we focus on – small-scale and often multilingual customer contact – is only getting bigger. We help smaller businesses like online stores internationalize: for example, German companies that want to enter the Dutch market or vice versa."

“The need for a partner who knows how to organize customer service is strongest among online stores that are outgrowing their attic rooms.”

YellowRock (currently 24 employees, turnover approximately one and a half million euros) also serves several well-known brands, including Primera and Bamboo Basics. Josette Poels (General Manager) emphasizes that agility is a key quality, in addition to a good rapport and personal connection with the customer. "I don't necessarily have to show up at your birthday party, but I do think it's important to know where you come from and what keeps you up at night. Our opportunities lie in providing constant feedback on what we see at the front end of, for example, a webshop. The need for a partner who knows how to organize customer service is most acute among webshops that are outgrowing their attic space. We contribute to reducing unnecessary customer contact. Because of our small scale, we can easily handle the cannibalizing effect of that."

The Good Agency has existed since December 2019. Until the beginning of this year, the agency had a turnover of more than one million euros with 35 employees, says managing partner Tim BosWith the departure of its largest client to a competitor, for whom the social return program was also implemented, the company found itself in dire straits. Bos explains that The Good Agency has drastically reduced overhead and is now working entirely remotely, for example. The Good Agency hasn't yet opted for specialization, but Bos is keeping all options open.

Quality Contacts (195 employees; 7,1 million euros turnover in 2024) sharpened its strategy at the beginning of this year and has since focused primarily on healthcare and well-being. Kim Vermue (business manager sales and marketing), the focus is on ensuring a healthy balance between automation and the added value of human customer contact. Within the market focus, there are significant differences between organizations, and potential customers' experience with customer contact is often limited. "In many cases, there's no contact center structure, no WFM, no professional training or coaching in customer contact. KPIs are rarely used, and there's often a significant digitization challenge. Many employees in 'appointment desks' at outpatient clinics are overworked and burned out. On the other hand, clients in these sectors are not accustomed to outsourcing."

 

2. The battle for returns: labor costs

As of January 1, 2026, the statutory minimum wage will increase again – a trend that the collective labor agreement for facility contact centers follows – and the new collective labor agreement for temporary agency workers will take effect. Can these kinds of price increases be passed on directly to the client? When will clients start considering offshoring?

 

At DIRECT customer contact The suffering has been shared: price increases have been passed on so far, and the company's own margins have come under pressure. Wennink believes the latter will recover once a good mix with Suriname and automation is established.

“If you go along with the lowest price, you will ultimately undermine your own business model.”

Not all customers of ContactWorx can pass on rising costs. "Business service providers who have contracts with hospitals, for example, can't simply raise their rates," says Dekker. Reducing the TCO of customer contact through self-service and channel management is a solution. Another part of the success lies in the low churn rate. This is due to "the family feeling within ContactWorx," says Dekker: "The average age is somewhat higher here than in most facility contact centers." But Dekker also critically examines requests from prospective clients. "We regularly refer clients because they're not a good fit for us, and in principle, we don't participate in RFPs and RFIs unless we're specifically asked by people we know within an organization. If you go along with the lowest price, you ultimately undermine your own business model."

At YellowRock Has the limit been reached: "Cost pressure remains high; we can hardly produce any cheaper." Cost pressure can also mean that you might have to prioritize continuity over profitability, says Poels, and at a smaller company, that's a bit easier. "I don't have shareholders who say, 'At least this much, otherwise you're out.' It also fosters fighting spirit and creativity."

“No matter how good your partnership is, you can never fully pass on the increase in labor costs of recent years to your partners,” says Vermue van Quality Contacts"There are partners willing to invest in customer contact, and there are customers who prioritize price. Those who prioritize the latter are more likely to end up in low-wage countries, and we don't offer that option. So then the price discussion is quickly over."

At The Good Agency The rapid rise in wage costs is a serious challenge. Bos: "On the one hand, I'm thrilled about that, because I still think it's an undervalued profession. It's also a balancing act, because if you want good employees, you have to pay more."

In discussions about rate adjustments, try Spangenberg Group To demonstrate as much as possible the added value delivered over the past year. "Many clients repeatedly realize: we don't want to, or can't, achieve this ourselves. And our clients also see that costs are rising everywhere. We can't deliver quality for a lower price, so we won't."

 

3. The battle for advantage: offshoring

Customer service outsourcers are increasingly asking about offshoring options, partly due to rising wages, according to the interviews. How do you address this?

 

Dekker indicates that ContactWorx In tender processes, it's occasionally compared to an offshoring offer. "If a client is curious, we suggest conducting a pilot in the form of a benchmark. Sometimes offshoring leads to higher costs per call, for example, because productivity is lower." He is also sometimes approached about setting up operations in Suriname. "There was an internal discussion about this, and the outcome was that we won't be doing it." ContactWorx is considering starting operations in Spain for a specific client.

At YellowRock Spain is also being considered, and there are doubts about Suriname. "Setting up our own branch there requires investing in additional capacity, and that's difficult for us to achieve." However, Poels does see opportunities in collaborating with fellow companies – she therefore urges her colleagues to "look beyond the walls of your own company."

DIRECT customer contact is the only one of the six players that has been active in Suriname for a longer period, first through a partner and now independently. "We could manage without Suriname, but our Surinamese operations—currently about 20% of our size, and it will gradually grow—help us in several ways. It's easier to find full-time employees there than in the Netherlands, although the labor market has become less tight here. It also helps that the time difference makes it easier for us to organize certain time slots. And from a cost-effective perspective, the model is attractive for clients with larger volumes to offer. Our teams in Suriname are absolutely comparable to those we have working in the Netherlands."

“If it is part of a tender process, it is difficult to compete with parties that operate abroad.”

Spangenberg Group Occasionally, I see parties return after doing business in Suriname. "They spent a few years trying to get from a 5,5 to a 7,5, and they couldn't manage it." Excessive investments to maintain quality are one of the factors that lead to failure. "If it's part of a tender process, it's difficult to compete with parties operating abroad. Sometimes outsourcers choose the trade-off of a slightly inferior match or quality because it offers a huge cost advantage."

The Good Agency However, he is convinced of the quality of services in Suriname, for example. "Many companies have demonstrated that it works well," says Bos. "If I had a good partner, I would definitely consider it. The question for the outsourcer is mainly: do you want to move customer contact to Suriname?"

 

4. The battle for the customer: innovation

A smaller contact center means fewer staff departments. How do you ensure that, as a service provider, you continue to connect with new technology?

 

DIRECT customer contact indicates that it has invested heavily in new tools, including Talkdesk. This provides greater insight into customer conversations, which in turn forms the basis for higher-quality service. Wennink: "Organizing processes more intelligently can be detrimental to your revenue; ultimately, you'll receive fewer calls. But the role as implementation partner, advisor, and support provider offers new opportunities." The application of expertise in Copilot Studio and system integration has led to "spectacular improvements in handling times" in recent years.

Also Poels van YellowRock is innovating and advancing within the value chain. "Even though we're small, we work with smart tools and systems and have streamlined processes. We're working on implementing ISO 18295. But being small requires extra effort from the entrepreneur and the rest of the management team: they need to be multi-skilled and knowledgeable about almost everything. We have our specialties, but where we fall short, we buy in."

“AI is not groundbreaking in the sense of 'we can't do without it'.”

What The Good Agency AI is both an opportunity and a threat: it supports agents and can reduce revenue. "We work with our client's application or with Leaddesk, which offers AI functionality; but AI isn't groundbreaking in the sense of 'we can't do without it,'" says Bos.

At Quality Contacts After the change of course, additional investment was made in the technology team, and the decision was made to literally juxtapose IT and operations, making them function proactively rather than reactively. "The IT team is often on the shop floor, with the goal of looking over our shoulder, asking what we can do ourselves, and what advice we can give our partners. Automation often sounds like a major undertaking, but it can also involve small changes or process optimizations."

At Spangenberg Group AI is being used for agent-assist applications. Like the use of chatbots, this is still a distant prospect for many clients, says Spangenberg. "From our consultancy role, we do advise on this, of course – often a quick scan yields many recommendations. An internal chatbot can sometimes already provide a solution."

Dekker currently sees AI primarily as a great tool to support employees. “Many customers of ContactWorx People want to do something with AI, but don't realize all the complexity involved. Where possible, we collaborate closely with Werkend2040, which shares the same investor as ContactWorx. This gives us ample opportunity to leverage a wide range of expertise.

 

5. The Battle for Advantage: Scale

Outsourcing ten to twenty seats isn't always attractive for larger players, but it is for small and mid-sized players. In fact, some small service providers don't make a fuss about half an FTE. At the same time, you have to offer such a client flexibility. How do you survive as a smaller player?

 

"Spangenberg Group "I have to offer a lot of flexibility: think, '2 FTE this week and 4 FTE next week.' Sometimes I get a call in the morning asking: can you provide one or two extra employees due to illness? Almost all clients have my mobile number," Spangenberg explains. Onboarding and serving small clients requires a relatively high amount of overhead: "If you make half an FTE available to a small client, you have to keep the knowledge of two to three people up to date."

Also ContactWorx has a substantial client base, some of which generate only 60 contacts a week, while others consistently employ 30 people. But Dekker doesn't see the limited scale as a concern. "Clients are increasingly unable to maintain all the expertise in-house. We're focusing on reducing the number of contacts. Sometimes we invest jointly in tools we develop."

“At this scale and with so many customers, you are adjusting processes all day long.”

“At this scale and with so many clients, you're adjusting processes all day long. We have very short lines of communication and work closely with most of our clients,” says Wennink van DIRECT customer contact.

 

6. The future

Do smaller facility contact centers have a right to exist? Are there concerns about their future? Or is small scale actually an advantage in the changing market?

 

Dekker van ContactWorx says there's plenty of work in his market segment: "We forward assignments that are too large—think at least 50 permanent employees—or that aren't a good fit for us to players in our network. We also maintain regular contact with players of our own size. And sometimes we have to benchmark. For example, we offer Schoonenberg Hoor Support in partnership with Concentrix, and we're completely transparent about it."

Spangenberg Group also sounds optimistic. "We're not worried about the future. We focus on long-term collaboration. We simply love what we do. We share that passion with our clients."

Poels, like the others, sees a lot of potential in the market. "In the boardroom, customer service is often viewed as a cost center. Smaller facility contact centers are absolutely valuable. YellowRock provides services that the big players are ignoring; that's a clear market. We're masters of the gray area between data processes and human interaction. We must maintain that. I'd like to say to my fellow entrepreneurs: hang in there. There's a market, and if you can just flex a little, you'll make it.

At The Good Agency After scaling down, Bos is now focusing on acquiring new clients again. He is also open to assignments starting at a few FTEs. He is convinced that human customer contact remains incredibly important, because even though developments in AI are moving quickly, "the applications aren't where they need to be yet. We might specialize more."

“I don't think the market has ever been as dynamic as it is now.”

"The size of the Dutch market for facility contact centers is estimated to be around 1,1 billion to 3 billion euros. Based on that amount, we only realize a very small portion of that," says Vermue van Quality ContactsOn the other hand, that also reflects the potential. In fact, we have a lot of work to do. Even in our focus market – healthcare and social welfare – people are steadily becoming more open to outsourcing. We, of course, strongly believe in our strategic choices. Personally, I think that if you don't choose to specialize, you ultimately won't make it in this sector. It's difficult to make that switch, especially for smaller contact centers. It's a challenging time anyway, even for large facility contact centers. I think the market has never been as dynamic as it is now.

Accountability – For this article, we contacted 13 companies that operate primarily in the Netherlands and are not part of an international company. The upper limit was €15 million in revenue and a maximum of approximately 300 employees in the Netherlands. Six companies responded to an interview request from Ziptone.

(Ziptone/Erik Bouwer)

Customer Experience, Featured, Knowledge base ContactWorx