The Market Value of Detective Agencies in the Republic of Serbia – Industry Code 8030 – Investigative Services

Serbia has 22 active detective agencies, but their combined market share is at most 200,000 Euros. This raises the question of whether opening a company providing investigative services in this market is worthwhile. Despite the provisions outlined in the Law on Detective Activity (2013/2018) and other relevant legislation, the market faces challenges that hinder its growth and profitability.

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Detective agencies have evolved to become a significant part of various aspects of modern society across the world. These agencies provide services related to investigating missing persons, corporate issues, intellectual property protection, and legal matters.

Serbia has 22 active detective agencies, but their combined market share is at most 200,000 Euros. This raises the question of whether opening a company providing investigative services in this market is worthwhile. Despite the provisions outlined in the Law on Detective Activity (2013/2018) and other relevant legislation, the market faces challenges that hinder its growth and profitability.

The Scope of Investigative Services (Law on Detective Activities of the Republic of Serbia)

  1. Investigating missing persons or individuals evading criminal, misdemeanor, or other forms of prosecution.
  2. Pursuing compensation from individuals who have caused harm to a service user, provided the legal conditions for liability are met.
  3. Uncovering and handling cases of anonymous and unlawful actions against the client, with or without causing harmful consequences.
  4. Locating lost or stolen items.
  5. Assessing the performance of legal entities and entrepreneurs.
  6. Protecting intellectual and industrial property rights.
  7. Conduct background checks on job candidates with the employer’s authorization and written consent.
  8. Investigating criminal offenses subject to private prosecution and identifying the perpetrators.
  9. Examining violations of work responsibilities or work discipline.

Review

Despite the diverse scope of investigative services, the market demand in Serbia appears to be limited. The sector’s profitability is notably low, which begs the question of whether there is a lack of awareness about the importance of these services or whether the market genuinely does not recognize their significance.

The average solvency score of registered firms in investigations in Serbia is either poor or very poor. This affects credibility and the ability to attract clients or foreign partners. Around 72% of businesses have been under financial blockade for over 60 days in the past 12 months, indicating economic instability and cash flow issues. Only two companies have shown significant business growth, while others struggle to expand. More than 95% of detective agencies operate with just one employee, usually, the entrepreneur holding the license for investigative activities. Half of the registered firms pay their suppliers within a 90-day deadline, which further hampers business development. During periods of economic uncertainty, individuals and businesses reduce spending on non-essential services, including private investigations. The bureaucratic processes and regulatory requirements involved in setting up and operating a detective agency can be complex and time-consuming. This may discourage entrepreneurs from entering the market or expanding their operations. Insufficient support from the government in terms of funding, incentives, or training programs for the detective industry hinders its growth and development.

Detective agencies in Serbia face competition from security firms and private security companies that offer investigative services as part of their broader security solutions. Apart from registered detective agencies, a significant informal sector operates in the shadows. Unlicensed or illegal investigators offer their services at lower prices, drawing clients away from legitimate businesses. In addition, domestic detective agencies heavily rely on word-of-mouth referrals from previous clients. While referrals can be beneficial, overly relying on this method limits the agency’s ability to reach new clients and expand its customer base.

Cultural perceptions and attitudes toward investigative services affect domestic clients’ acceptance and utilization. Some individuals view seeking investigative assistance as a sign of weakness or mistrust, leading them to avoid these services at all.

Possible Causes for Low Market Share

As observed in other countries, one potential explanation for the lackluster market performance is the need for more cooperation between lawyers and detectives. Local lawyers often undertake detective-like tasks, such as land registry inspections, market research, or tracing potential beneficiaries of foreign insurance policies, tasks typically reserved for private investigators.

Like any other service-based sector, the detective industry relies heavily on trust. A few instances of unethical behavior or misconduct by a few agencies in the past tarnished the entire industry’s reputation, making potential clients hesitant to seek our services.

None of the detective agencies have adequate marketing strategies or budgets to promote services effectively. As a result, we struggle to reach the target audience and fail to attract potential clients. Additionally, some individuals and businesses perceive detective services as costly, leading them to opt for other alternatives or forgo investigation altogether, especially if they believe the chances of a successful outcome are low. Most agencies do not offer specialized services for specific industries or niche areas, such as corporate investigations or insurance fraud investigations. As a result, potential clients seeking specialized investigations prefer to engage agencies from other countries and larger international corporations, believing they have a broader range of expertise.

Non-transparent pricing policies without detailed breakdowns of costs and fees to clients negatively impact the market value and reputation of detective agencies in Serbia, creating doubts about the honesty and integrity of the detective agency and leading potential clients to seek services elsewhere. Non-transparent pricing policies can deter potential clients from approaching detective agencies in the first place. As a result, the demand for our services may decline, leading to lower overall market value.

To enhance the market value and maintain a positive reputation, detective agencies should adopt transparent pricing policies. Providing clients with clear and detailed cost breakdowns not only fosters trust but also demonstrates professionalism and commitment to customer satisfaction. Transparent pricing practices can lead to increased client satisfaction, positive reviews, and a stronger market position for detective agencies in Serbia.

Some individuals and businesses have concerns about the privacy and confidentiality of the information shared with domestic detective agencies. Fear of data breaches or misuse of personal information deters potential clients from engaging local detectives. This can be justifiable if we consider that some detective agencies solely rely on traditional investigative methods, such as manual surveillance and interviews, while neglecting the potential benefits of data analytics, social media monitoring, and other modern techniques. But, when it comes to obtaining crucial information from official sources, local investigators are far ahead of international detective agencies, especially when dealing with sensitive cases or accessing data related to ongoing legal matters.

Enhancing the market value

To enhance the market value of detective agencies in Serbia, we should all raise awareness about the legally defined detective services and guide potential clients to professional investigators with the necessary qualifications and experience. Highlighting the differences between the roles of public and private sector investigators to avoid confusion and ensure clients make informed choices. Promoting collaboration between lawyers and detectives to maximize expertise in their respective fields and deliver comprehensive solutions to clients. Establishing and promoting industry standards to enhance the credibility and reputation of detective agencies.

Furthermore, specialized training programs that cater to different areas of investigation, such as digital forensics, cybercrime, and financial fraud, enhance detectives’ skills and expertise and can significantly improve the quality of their services and, therefore, induce the entire industry’s growth. Encouraging detectives to specialize in niche markets or industries where their expertise can be uniquely valuable can help agencies stand out from the competition and attract a more targeted clientele.

Moreover, conducting targeted public awareness campaigns to educate individuals and businesses about the benefits and importance of hiring professional detective agencies. Highlighting successful case studies and testimonials can build trust and credibility. Encouraging satisfied clients to provide reviews and testimonials about their positive experiences with detective agencies can act as powerful endorsements and attract potential clients; online presence through websites, social media platforms, and search engine optimization increase visibility and attract clients searching for investigative services online.

In conclusion, while detective agencies in Serbia may encounter diverse challenges, we firmly believe that a united and holistic approach is the key to success. By actively promoting public awareness, investing in improved training and certifications, advocating for streamlined regulations, and fostering stronger collaborations with stakeholders, we can pave the way for a stronger and more reputable industry. Embracing professionalization and embracing technological advancements will further elevate the market value of detective agencies, enabling us to navigate through obstacles and offer invaluable investigative solutions to our valued clients. Together, we are poised to unlock new possibilities and ensure a brighter future for the detective industry in Serbia.

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