Omnichannel Peak Performance

Article

Omnichannel Peak Performance

Navigate customer and business value, steer to omnichannel success

As we continue to live and work around Covid-19 there is a clear distinction between interim trends and fundamental changes to consumer behaviors.

Omnichannel Peak Performance

The acceleration of online growth throughout the pandemic is something we need to get used to as e-commerce sales soared 44% in 2020, reflecting the strongest single-year growth in two decades. While these figures have since flattened throughout 2021 the impact is widespread as traditional organizations in both B2B and B2C domains continuously react to these fundamental shifts.

For many organizations, there is still clearly a role for a diverse channel mix both offline and online but now with added complexities as customer behavior and expectations change and online environments blur with the rise of in-store technology, further reinforced by restrictions imposed by the pandemic in some countries.

 

 

Understand your target customers

The rapid growth online is not specific to any one customer segment, we have seen that typically offline customers have been forced to adopt new channels making it difficult and more competitive to retain previously loyal customers. Customers don’t only shift channels, but use a mix of them, starting their journey in one, for example online to inform themselves, before shifting to a different channel such as retail so they can get more details and maybe physically experience the product/service and finally concluding in yet another channel such as online of telesales again.


Organizations that have invested in understanding and pro-actively managing their customers’ omnichannel have seen substantial impact on both the top line revenues and bottom-line cost savings. A recent Deloitte study found that customers who have high-quality experiences are 3.6x more likely to buy additional products and services from a brand creating significantly more cross and upsell opportunities. On the contrary, a better customer experience decreases the cost to serve meaning organizations can focus their efforts on high value customer groups who bring in more than 1.6x higher life-time value.


These shifts in customer behavior and evolving expectations demand the need for organizations to adopt an omnichannel approach to their technology, processes and people, a transformation journey that is not without challenges as it often requires breaking long-standing silos, building different, incremental capabilities and re- and upskilling employees and ensuring the right behaviors are incentivized regardless of channel, but across the customer journeys.

Balance strategic and operational objectives

A target experience is your customers desired and preferred path to conversion or action throughout both sales and service channels. To define a target experience, you need to create visibility of the revenue and cost implications of each touchpoint. For multichannel companies, this becomes complex as customer service costs are often high and can easily be avoided through other touchpoints but need to be weighted based on customer expectations. Depending on the request, not all needs can be addressed through enabling technology. This is often where companies fall short focusing on cost reductions through digital technology at the expense of human experiences.

To successfully steer throughout your defined target experiences, you need to have visibility over the revenue generated by the persona and the cost implications of each touchpoint throughout the customer journey. By understanding these components, you can then design the desired target experience which is ultimately developed based on known client needs and geared towards your organizational objectives whether it be revenue generation, cost reduction or an increase in customer experience. This will enable teams to collectively steer customers based on organizational objectives and guide customers throughout their lifecycle in the channel that they prefer, providing them with the most optimal customer experience.
Measures of success are defined on 3 levels, cost, revenue, and experience. Striking a balance between all 3 remains the challenge but when identified and communicated correctly business units can then optimise throughout the journey to achieve KPIs on all 3 levels.

Once there is clarity on the strategic objectives across those three levers you must break down the KPIS into the journey, the journey stage and touchpoint KPIs. Those KPIs will be either revenue, cost, volume, or customer experience KPIs.
While this conceptually sounds simple, there are many challenges organizations face in achieving this. Having the right data available and accessible is crucial so that you can develop a holistic view across the organisation. With data often residing in different areas of the organisation, this presents a raft of new challenges beyond typical complications of being a siloed business. As a result, data is often missing, unavailable or inconsistently defined making it difficult to build the foundation of your target experience.

Once you have defined the data points you require and the overarching metrics you wish to measure, considering each of the sales and service channels, you then need to develop a channel economics model which acts as the foundation of your client target experience, factually guiding the channel teams based on insights and data.

Shape your target experience

The idea of providing an omnichannel experience across all touchpoints isn’t something new, this idea has been around for years, with only a few companies truly excelling. Not only are customers becoming more fluid in their channel interactions, the orchestration and internal synchronization of business units often plays a significant role.

To excel in the omnichannel world, organizations need to design Target Experiences for their priority personas and customer journeys along the customer lifecycle. Those Target Experiences are the personas’ desired pathways across their journeys and preferred channels.

Target experiences are a great ideal state, preferred and demanded by your customers. They might however not be (economically) viable and you will want to shape and steer those target experiences according to your organization’s strategic objectives and the reality of the market(s) you are in.

To be successful you need to have a clear view on how to balance your strategic objectives of growing revenue and customers, improving customer experience and of course managing your costs. And translate these into objectives for your priority personas’ target experiences.

Effective channel and target experience steering can only be achieved once an organisation has established a holistic view across all marketing, sales, and service channels. Simply speaking, you can only steer based on what you understand and know about your customers and what you can effectively measure.

Start refining your target capabilities

For organizations to truly excel, they need to balance omnichannel efforts across four dimensions ranging from strategy and operations, governance and mindset, customer insights and technology as these all play a fundamental role in delivering your desired target experiences.
Organizations internally are simply not set up in this way, while this is one of the main reasons’ organizations fail to deliver a truly seamless and personalized experience for their customers, conflicting objectives and targets also play a large role as varying business units optimise in isolation throughout the customer journey.

Creating transparency and understanding simply isn’t enough, by evaluating these dimensions organizations can preciously target areas of improvements to shift from a channel-driven business towards a journey driven organisation. Traditional and more established organizations with diversified offerings have a bigger task on their hands as legacy systems and business owners often prevent or slow down this transformation. Without buy-in and commitment from the executive team it’s unrealistic to expect any significant results.

Start steering – 5 tips to reach your peak

Truly embracing and embedding omnichannel Excellence in the organization is not easy. It is a transformation journey that will take time and will require changing the minds and hearts of the organization. Our cross-industry experience tells us there are 5 lessons learned and pitfalls to avoid making the journey smoother.

 

 

Contributors:

This article was written by Nicholas Pinfold, Attila Havas, Wouter Slotemaker who are part of the Customer & Marketing consulting practice in The Netherlands.

Did you find this useful?