TBY talks to Sitare Sezgin, General Manager of Back-Up, on the company’s evolution and place in the market.
TBY How has the concierge market changed in Turkey since Back-Up was founded?
SİTARE SEZGİN Times have changed since Back-Up started its operations in 2003. The market conditions in 2003 compared to today are totally different. Back then, it was not as easy to reach information, or to get assistance. Now, it is total different. With the rise of social media, smartphones, and the internet, you have to change your offerings according to the market if you want to survive or be successful. If you want to have sustainability, you have to change your value proposition. To address these changes we started working with the Boston Consulting Group to first run a diagnostic on the company—to discover its core abilities, trends, and weaknesses, plus what should be changed in these new marketing conditions. Back-Up is a very well-known brand in the country. We are the clear market leader, with more than an 80% market share. We created the concierge and assistance sector in Turkey, but we are facing increasing competition both domestically and from abroad as well as from changing technology. You have to be proactive, not reactive. We are trying to create a new generation of Back-Up—a back-up for the future. We appreciate our values, but we want to build on them. We will invest more in people, and in systems. There will be a different Back-Up in the future.
How does Back-Up reach the international market in Turkey?
The employee benefits line is a small business in Turkey, but in the international arena it is huge. At some point, people working in a company will not want to be rewarded only with money or bonuses. You have to provide some non-monetary benefits. At that point Back-Up comes into the picture. We wanted to separate our brands, because they require totally different strategy positioning and different dynamics. We created the corporate brand in March 2011. We work with a number of multinational companies, and many other enterprises, banks, and telecoms firms. We usually work with companies that have a big customer database. They want to retain their customers. In banking, for example, where giving banking-related services, such as higher interest rates will help you, you also have to provide some other benefits. We work with those companies to create their own loyalty programs. We give concierge services and assistance to thousands of individuals. We work with corporations to provide these services to their clients and customers.
What is the potential for growth on the individual client side of the business?
We provide services to residences, malls, and especially to office buildings. There are huge opportunities in Turkey, as you can see from the vast scale of construction. The demand is increasing significantly. The construction sector is one of the top sectors in Turkey, and in Istanbul there are about 180,000 modern residences, either recently opened, or set to be opened within three months, with 250,000 more in the pipeline. These residences are not like classic apartment buildings. You need a professional concierge, because the people that will be living there demand these kinds of services. This might be because of the organization, the rise of this modern accommodation, plus changing family sizes or structure. We serve a lot of small families and single-parent families. Istanbul is a hectic city, where time is crucial. Construction is more than just about building the building, but about adding value through the additional services that we provide.
What is the split between corporate and residential in terms of volumes?
Until 2009, all of our revenue came from memberships sold to individuals. The corporate side did not exist. The corporate share in the revenue has now increased to 10%. The number of customers, both corporate and concierge, was 15,000 in 2009, and today it is closer to 200,000, so we are growing rapidly. And we will keep investing in our corporate side. What we do best is give these services. We are experts at that. And of course we keep creating different memberships for our individual customers, and we will keep investing there as well. However, for the corporates, due to many issues such as economic instability, growing GDP per capita, and increases in disposable income, there is huge potential. We are well aware of it, and we believe that the corporate share of 10% will become 20% or more within a few years.
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