Developing a class leading omnichannel customer experience is complex. This presentation given to at the Ovum Industry Congress in May 2015, tries to demystify it without trivializing the considerable transformation journey that most organizations with omnichannel ambitions will have to make. It includes some original research and a maturity level with recommendations on how to progress
Key points:
CRM promised much - increased CLV, higher retention levels, lower acquisition costs through referrals etc,
But what we often got was little more than an attempt to control the wild cats of sales, ad hoc campaigns about as much use as the wings of the Dodo, and with businesses operating in silos very little else.
CRM became a dirty word for many and in last few years there has been an explosion of interest in CEM, which promised to fulfil the promise of CRM. What we often got though was a new channel bolted on
Such as social or mobile but too often we remain in channel silos and still no cure for the underlying problem of departmental siloes.
But now we have the idea of omnichannel which is a recognition that customers want to connect in the most convenient ways rather than those proscribed by businesses.
Why Russian dolls? Well rather than jumping from one idea to the next, omnichannel actually builds on CEM and builds on CRM, its an evolution in thinking with the growing awareness by the more thoughtful firms that the starting point for omnichannel design is the customer, not the products we might be trying to sell.
There is a recognition that customers don’t care about organisational design but they do want a relevant and positive experience throughout their ‘journey’
We need to be able to engage with the customer on the customer’s terms, across their preferred channels of interaction, digital, physical and human. We probably ought to drop the term ‘channels’
and think more in terms of digital, physical and human relationship experiences. Time to put the human into the mix supported by contextually relevant information that recognises the customer’s intent and what they are trying to achieve.
Its about customer outcomes vs. isolated transactions. For that to work well the experience must be seamless, memory carried across different mediums of interaction, different channels if you must!
This is a major transformational task. Orchestrating these experiences at a personalised individual level and at scale. This is not for the faint hearted. There is no single ‘solution’ that can be purchased, and it has enterprise-wide implications.
But omnichannel isn’t really new. Professor Adrian Payne and Dr Pennie Frow developed this framework 10 years ago, and it’s a good starting point for understanding just how enterprise-wide our thinking and planning needs to go.
This was what we might call grown up CRM as a business strategy rather than the narrow triumvirate of sales, service and vestigial marketing that for many it became.
I would argue that the seeds of omnichannel go even further back . Prof. Francis Buttle developed this value chain view way back in the mid 1990s. Network development included collaborating with suppliers, customers, owners, partners and employees. However whilst this set out the breadth of thinking that firms would need if they were to develop enduring relationships with customers, it gave few clues as to the how.
So why now?
Customer power is the key driver enabled by mobile and social technologies, and a global competitive market awash with disruptors in every industry. in PwC’s CEO survey equal weighting (61%) was given by CEOs to their concerns about changing customer behaviours and potential for losing customers if they are unable to adapt at the right speed. Also exacerbating this is the increasing numbers of left-of-field, competitors changing the rules of the game and threatening to completely disrupt existing business models. The hoards are at the gates!
Our own research shows that customer satisfaction is now the number one concern for enterprises and a recognition that IT must somehow be harnessed to support the business more effectively and especially to keep customers.
To make things even more complicated channels and interaction choices have proliferated, and somehow firms must work out how to meet the increasing demands of customers, no trivial task.
But where do you start? There is something of an innovation arms race going on from specialist start-ups to mega-vendors – this is a dynamic market, where do you place your bets?
Lets take a step back and look at the omnichannel landscape in the round.
Before we do though, I like this observation from Paul Coby CIO John Lewis Partnership. Omnichannel is not just about the front office!
Here is how I see it. To be truly successful any enterprise must match its brand promise to its ability to deliver on that promise. The organisation must be coherent and act in unison, not a disparate or fragmented set of siloes.
We must design from the customer-back. Understanding customer journeys and designing relevant experiences across all digital, physical and human interactions and supporting those with real-time ‘in-the-moment’ intelligence and insight is one critical component of the omnichannel jigsaw, but we must also ensure the planning, resource allocation, innovation and financial planning capabilities of the firm are fully integrated, and beyond the enterprise to the network of partners, suppliers and wider communities. The value chain must become more of a demand ecosystem or network so that the enterprise can create and deliver value to customers consistently and continuously.
Underlying that there needs to be an intelligence layer that spans the entire value network. The execution will vary by industry but the fundamental principles apply across all industries and sectors. This is transformational in nature.
Tying this together we now need to think about developing an enterprise nervous system so that there is far greater transparency into how the enterprise functions as a more organism-like adaptive system triggered by deeper insights and foresight into the customer domain.
So where are you now?
The X axis is a proxy for the quality of the customer experience, the y axis an indication of the level of organisational coherence that is required if firms are to really deliver the omnichannel promise.
Broadly there are four evolutionary states:
Departmental operating in siloes – a dangerous place to be, don’t expect much of a future.
Multichannel – some basic integration in place but channels are still operating in siloes.
Omnichannel as we have seen has massive enterprise-wide implications – it is transformational. This won’t happen unless the CEO creates the conditions necessary for people to work together across the enterprise to design and create the omnichannel environment. The term 360 degrees view of the customer must include the contextual information surrounding the customer. What is the customer trying to achieve? What do we know about them? What does their history with us reveal? What patterns of behaviour are being exhibited and what content and information can we deliver at the point of need and in a form that is appropriate for the device or channel or interaction medium they are using?
Customer-adaptive is the most advanced as not only does the enterprise act as a coherent system of value creation and delivery and in the right manner, but it has a powerful innovation engine, and seeks to find new ways to create and deliver value. It is a disruptor, not a disrupted enterprise. Our research shows that enterprises displaying these characteristics are few and far between. They don’t just sense and respond in the moment, itself an incredibly challenging feat, but also scan the horizon and anticipate the future so that they can help to create it.
Where do you start? Assess where you are now (survey will be available with instruction in June 2015) More will be revealed in June 2015.
So where do you start or how do you continue on your own transformational journeys?
Core principle is to design from the customer back, not the product out. Design from the customer back is the antidote to those wretched siloes!
As my former colleague Steve Hodgkinson often said – you can’t create a silk purse out of a sow’s ear. First take stock of where you are on the maturity curve.
If you are departmental and siloed then determine your long term customer oriented vision. Build the foundation by integrating as far as possible your value chain. Focus efforts and measures on retention first.
If you are at the multichannel stage then map customer journeys and reconfigure your channel capabilities to match the customers needs. You may need to change your operational structure to become more customer oriented
If you are organised along product lines then shift to a customer orientation to focus on the customer’s broader needs not product by product.
If you have cracked the omnichannel challenge or are making great progress, than develop an innovation competency. Extend your capabilities and reach and seek IoT opportunities to add more value.
Lastly if you are that rare organisation that is customer-adaptive, beware the arrogance of success, the surest killer. Instead ramp up innovation and conceive new business models to add huge value to customers.
Invent new and rewarding experiences.