The shift towards digital creates both opportunity and complexity within the marketplace. Growth and adaption to new channels will take a strategic, long-term investment by organizations. However, this isn’t the drop-everything-and-run scenario people might think. A deep understanding of your customer base and their interactions with your organization is required to determine how and where to move. In order to reduce costs, increase the speed of service, and best meet the needs of the customer, companies must be sure that the costs and investments made across the evolving channel mix are strategically aligned for the future growth of the organization.
Channels Work Better Together
The crucial misstep companies sometimes make when integrating new digital channels into the mix is to abandon or under-serve legacy channels, or perhaps worse, under-invest in new growth channels. Brick-and-mortars, call centers, direct sales, and digital channels are all necessary ingredients to a successful organization. The trick many C-suite executives grapple with is where to cut costs, where to invest and how quickly to move to strike the right balance.
Forrester forecasts that combined web-influenced spending and online retail sales are projected to grow from 52 percent of total sales in 2014 to 59 percent in 2018. Clearly, purchases and purchase influence will rely more and more on digital channels as the trajectory continues. The hardest challenge organizations will make is to know what to stop doing in order to accommodate these necessary new investments. To make these choices wisely, companies will need to measure customer points of entry and the retention rates across multiple channels. If your legacy systems can’t track these measures correctly, that will likely be your first step in deepening your understanding of the customers’ journey.
Fig. 1: Forrester Research Web-Influenced Retail Sales Forecast, 2013 to 2018 (US), Published July 2014
The healthcare industry is another great example of a fluctuating channel mix – this time due to the tremendous changes brought on by the Affordable Care Act. As the market becomes increasingly consumer-centric, employers will play a smaller role in the communication to individuals of their healthcare benefit program. A shift in effort will take place from the employer to the consumer, and by extension, the healthcare provider. The key to success for providers will be to enhance the functionality of digital and self-service channels to reduce the cost of service in legacy channels, increase the speed of service and perhaps, most importantly, improve overall customer experience.
Mine and Measure the Right Data
As emerging channels develop, watch the metrics. The level of impact may not be enormous or financially notable to a Fortune 500 organization at the early stages, but growth and new customer acquisition within any channel should not be overlooked. If a CFO sees only marginal revenue impact within a new channel, it may appear that other more traditional channels are more successful. However, a deeper look into the data might illuminate the growth potential within that channel. And go beyond the numbers. Visit call centers, brick-and-mortars, your website, and social channels to highlight the areas of opportunity for decreased costs, increased speed and improved customer service.
At Northridge, we have seen multiple organizations incorrectly define data when tracking customers’ channel preferences. This can lead metrics to be skewed and investment dollars to be spent in the wrong way. With a deep dive into the metrics, we are able to shed light on where customers access services, where new customers are being obtained and ultimately how those channels contribute to both a better cost model for the business as well as a better experience for your customer.
Decisions on where to invest and cut costs won’t happen overnight. Companies need to be thoroughly familiar with data and take a critical view of the metrics that are considered valuable for the continued growth of the company. Furthermore, companies should consider a three to five-year view of where those investment dollars are being spent. Think long-term and regularly reacquaint yourself with the customer viewpoint and the customer journey. It will keep your company ahead of the curve and on the road to continual growth.
Are you focusing on the right channels and metrics for your long-term business success? Contact us to discuss.