20th Jun 2011
Forrester's Bill Band explains how organisations are optimising people, processes and IT to support a journey-centric rather than channel-centric strategy.
While organisations have busied themselves with multichannel approaches to cater for the expanding number of touchpoints that the customer has with the business, the grim reality is that most firms are still not set-up to reflect the modern consumer.
Today’s customer is channel agnostic, and so although multichannel commerce has evolved to cater for all the devices and platforms at the consumer’s disposal, it is not prepared for a customer that no longer interacts with companies from a channel perspective.
As a result, leading-edge businesses are now looking at replacing this channel-focused approach with a more customer journey-focused strategy, supporting this by means of internal restructure and IT integration.
As VP and principal analyst for Forrester Research, William Band has been monitoring these trends for some time.
"Companies are beginning to understand that customers don’t want to interact with companies through individual channels," he explains. "They expect to be able to interact to make their purchase search and eventually their purchase decision and acquisition of a product or service across all of the channels. This multichannel orchestration is something that has been talked about for quite some time but it is becoming even more acute as customers start, usually, in the web with their purchase search and decision and need to execute a transaction across different channels."
Therefore, companies need to think more about the customer journey across those channels, says Band. "The basic thing is that if you think about customer journeys, and journeys that start more in the web, from a customer point of view this really does fly in the face of the way most organisations are organised with the traditional silos – marketing, sales or service."
For businesses to adapt to this "new reality", a new report by Forrester suggests that organisations must look to tie ecommerce solutions into their CRM solutions and reappraise their business process design, ultimately creating what the analyst calls "agile commerce". Forrester defines agile commerce as "an approach to commerce that enables businesses to optimise their people, processes and technology to serve customers across all touchpoints".
Ultimately, this constitutes a journey-centric approach, says Band. "The main thing is the notion that the model is about understanding touchpoints, not channels. You’re trying to orchestrate and then understand the touchpoints of the customer through the purchase lifecycle and orchestrate that process."
So how can an organisation make this transition to agile commerce?
The bedrock of agile commerce needs to be a focus on how customers use all the touchpoints in the customer lifecycle. This requires an understanding of how customers learn, consider, select, use, get help, and share over the life of their interaction with a product/service, so that touchpoint experiences can be designed, managed and optimised to support this lifecycle across the variety of customer touchpoints.
Analytics becomes a core competency as part of this, so that customer interaction, product sales and service data are captured to analyse customer behaviour and cross-channel profitability to enable optimisation across touchpoints. Furthermore, this data must be transmitted to all levels of the organisation to support a coherent view of the customer.
Ebusiness professionals must work to orchestrate the customer relationship across touchpoints via relevant and personalised offers, while traditional channel-focused metrics need to be replaced with KPIs that reflect the new reality of customer activity across touchpoints.
Transforming the business
To support the shift from channel-specific strategies, Forrester has noted that some businesses are experimenting with new organisational models, including the formation of small teams that combine technology, product, marketing, analytics and service functions into units that optimise a touchpoint, while roles such as customer experience professionals optimise the business across lifecycles.
"One thing that we see is that there is an emergence of people trying to think about how we establish some kind of cross-channel accountability for the customer experience," says Band. "Forrester has been writing a lot about the rise of the chief customer officer and who that should be and what their role is. That is all still fairly nascent."
A further model that has been identified is a "matrixed model", where teams are organised around touchpoints that are tied to functional groups, such as marketing and merchandising. In addition to this, a hybrid model of the two aforementioned models could also prosper, which would keep channel teams in place, but install functional groups that operate against touchpoints independently.
Within these all of new organisational structures, business process professionals have an important role to play, says Band. "Business process professionals have a lot of expertise that they can bring to this in terms of their process focus – they’re ideally positioned to do a lot of this work and help companies understand the customer journey and understand how the customer touchpoints of the customer journey interact with internal business processes," he explains. "The typical marketing or customer service executive doesn’t know how to think about that problem or do that work.
"The other thing that business process pros can be involved in is that they are often internal coaches around change management as well. Usually a result of this new kind of thinking is that we might have to reorganise or change our business processes and a business process pro is often a change agent and is somebody whose job is to help companies change the way they do work."
Technology support for the journey-centric approach
Traditionally the ecommerce world was a very web-centric set of technologies that enabled people to interact and purchase through the internet channel. However, in order to support the multi-touchpoint journey, customers require that whatever is going on in the ecommerce channel be tied to what is going on in the other channels.
"This means firms they need to integrate with CRM systems and order management needs to be at the core of fulfilment," says Band. "It requires a broader set of solutions and not so much a piecemeal individual, siloed solutions, but solutions interacting with eachother."
The good news is that we are seeing increasing convergence of these solutions. "The ecommerce technologies are having to be hooked up with the traditional order management or CRM transactional systems more often than not, and so these worlds are coming together," continues Band. "If you think about it from a traditional CRM applications point of view, Oracle just acquired ATG, which is a major ecommerce platform, and that was in recognition of the need to weave these two worlds together from their customers’ point of view."
Ultimately, technology ecosystems must evolve to support and drive touchpoint usage. This means investing in systems that can delivery dynamic and personalised content and enabling the delivery of offers, services and experiences by leveraging customer intelligence across channels from systems such as CRM and data warehouses. But some hurdles still exist.
"The 360 degree view of the customer continues to be the holy grail and one that continues to be difficult to achieve and what is compounding the problem is people’s desire to bring in all this social data an marry it up to transactional data," says Band. "If I’m going to be monitoring social sentiment and those kinds of things, how do I take that unstructured data and marry it with transactional data? That is not very mature yet. But it is going to be one of the problems that need to be solved going forward."
We are only at the beginning of the transition to what Forrester calls agile commerce – and as Band concludes, there are still problems that need to be solved. But with the channel-agnostic customer forcing our hand, the race is on to capitalise on these rapid consumer and technological changes.