As the number of channels used by customers has proliferated, so organisations have felt the pressure to keep in step with their customers. But although the need to adapt to customer preferences is vital, it has become increasingly apparent that many channels are being bolted on with little or no consideration for how they are integrated with the rest of the organisation.
In many cases there is double trouble, as this sub-optimal channel support is also the action of a department that has decided to bypass the rest of the organisation in a bid to fast-track channel support. This means that we’re not just seeing evidence of the all-too-common operational silos, but are also witnessing channel silos being built on top.
Channel silos can take the form of:
- Siloed marketing channels. Customers receive marketing messages across a wide range of channels, including the internet, mobile, email and print publishing. However, Experian’s 2016 Digital Marketer Report has revealed that less than a third (30%) of marketers work in fully integrated teams, meaning the vast majority are either completely siloed by channel or only partly integrated. Larger organisations appear to be the biggest offenders. According to the report, 59% of enterprise-level marketers work on marketing teams that are broken out by channel.
- Siloed sales channels. Customers interact with a large number of different channels to make buying decisions and make a purchase, including bricks-and-mortar stores, online stores, phones, franchises, dealers and direct sales teams. PricewaterhouseCoopers has reported that globally the majority of retailers have not fully embraced integrated omnichannel delivery so far, due to obstacles including the significant investment in front-end and back-end systems required, the restructuring of operational process that are necessary, and often most prohibitive of all, the elimination of the departmental and technical silos.
- Siloed service channels. Service channels provide customer support over an ever-expanding range of channels, including social, mobile, internet, phone and chat. Dimension Data forecasts that by 2017 most contact centres will support an average of nine channels. But, at the same time, at the moment just 36% of businesses questioned by Dimension Data said they could track a customer journey that spans across those multiples channels. The 2016 Global Contact Centre report reveals that connected customer journeys represent the number one factor affecting customer experience capability, reported by over 40% of respondents.
For the customer, the existence of siloed channels can be apparent in a variety of ways, such as inconsistency in actions from channel-to-channel; different tone of voice; duplication of messaging; or having to start the conversation anew every time it shifts to a fresh channel.
“There are instances where a customer either wants or needs to switch between channels,” says Tim Pickard, SVP marketing at NewVoiceMedia. “I have had many experiences where it is blatantly clear that the channels are siloed, no information about my interaction is shared cross-channel. This is increasingly frustrating as it means that firstly identification and verification have to be re-established, you are who you say you are; secondly, re-explaining the situation/problem that needs to be resolved, and thirdly as you go through each channel, what you have managed to achieve in each.”
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The problem of these silos is twofold for businesses. Firstly, today’s customers are increasingly channel-agnostic. Indeed, research by GI Insight, in its report The Omnichannel Imperative , has demonstrated just how convoluted customer journeys have become. In a survey of 1,000 UK consumers it found that 71% of customer journeys begin online and yet just 42% typically buy via the web, while 18% start with a visit to a shop but 31% end up purchasing in store. Meanwhile, 25% of respondents reported that they don’t have any ‘usual’ purchasing channel at all.
But the second issue for organisations is that while channel hopping has increased, tolerance for poor customer experiences has decreased. Indeed, research from Zendesk suggests that a huge 82% of customers have stopped doing business with a company because of a bad customer experience. The message is clear: those organisations that cannot provide a seamless experience across multiple channels are in danger of losing customers to those businesses that can.
So how can organisations break down these channel silos?
First of all, think strategically, rather than take a rushed tactical approach. And this starts with understanding the brand, merchandising and pricing strategies across all channels – and of course understanding the customer.
“Understanding customers, their behaviour, frustrations and needs will allow you to identify what unique value you can bring to them. The groundwork needed is a full and total immersion in their data, experiences and feedback to fully understand their needs,” says Mark Walker, senior client director at dunnhumby. “Once you are clear on this, a greater understanding of the strengths and weaknesses of each channel is vital. It is important to include all the routes you have to deliver value to customers, whether social media, sales teams or customer services – all have a role to play.”
With this information gathered and understood, the organisation can execute clearly defined customer segmentation, built around the behaviours and needs of key customer groups. This gives the business a set of prioritised opportunities to go after. The organisation can then begin to build its strategy around this.
Again, the key thing is to ensure that departments and teams resist the temptation to dive in.
There is a real risk that businesses can be blinded by the excitement new or evolving channels can create, preventing the creation of a clear plan before action.
“There is a real risk that businesses can be blinded by the excitement new or evolving channels can create, preventing the creation of a clear plan before action,” warns Walker. “Building a strategy, based upon customer needs, allows you to identify and prioritise the right opportunities, which value to offer and what mix of channels to deliver it through. This strategic plan needs to be communicated through agreed objectives, monitored and held to account by clear performance benchmarks and KPIs.
“A tactics or channel first approach will not allow you to place customers at the heart of your plans. Their needs are the opportunity you are there to meet. Without being clear on the objective, the tactical channel plan is not able to realise the opportunity, nor deliver value at its full potential – your efforts and focus will be wasted.”
Matthew Dunn, managing director, targeting, at Experian Marketing Services, agrees that it is important that the right organisational structure, goals and incentives are in place. “A major step forward is ensuring that all your teams measure the same KPIs. If you’re still doing attribution by channel you need to structure and incentivise your teams to work collaboratively,” he explains.
“If you have channel conflict, price discrepancies or conflicting sales models, it’s time to fix them. Having separate profit and loss statements and objectives designed around each channel only provides the scenario for missed opportunities and gaps in the customer experience. It’s going to be a hard and painful process but it’s one that needs to happen.”
Walker adds: “You need a robust and agreed set of customer benchmarks at a category, product or brand level against which goals can be set and performance monitored. Note, these are, at this stage, not channel metrics and KPIs – customer performance is the ultimate benchmark against which all channels can eventually be referred back to.”
The role of data
From a technical standpoint, in order to ensure that there is a consistent and joined-up experience across channels, organisations not only need a consolidated and holistic data set, but they also need to be able to deliver that data to the customer, employee or touchpoint at the right time and in the right place. Sometimes this might involve communications that are taking place across multiple channels in real-time. To ensure that this is a seamless process, it is necessary to create a master data set.
This means consolidating and standardising product data, for one example. It is not uncommon for customers to find that a business is offering a good at different prices on the web and in-store, something that can frustrate consumers. This is often because the retailer is using two different data sources to display pricing on the different touchpoints. To ensure consistency, businesses must derive the data from one master data set – a single source of truth.
It is not uncommon for customers to find that a business is offering a good at different prices on the web and in-store, something that can frustrate consumers.
While managing product data can be tricky, it is the management of customer data that can be the biggest challenge, as different departments and teams can often hold different information about a single customer, resulting in multiple customer data sets. This means organisations need to put data from every customer, on every platform, in every store, into a single repository. This 360 degree view of customers allows the business to deliver more consistent and personalised communications, which in turn drives engagement and loyalty.
In order to support analysis, insight and action on this data, most organisations use a CRM system, which acts as the depository of customer data, a system of record, as well as offering analysis of the data sat within it, providing insights to sales, marketing and customer service. The marketing team will typically use a unified marketing platform that is integrated with the CRM system to access this information, enabling them to view the likes of purchase patterns, ecommerce interactions and loyalty programme activity which in turn helps them to deliver more personalised and contextual communications.
Elsewhere, the service team will use the data from the CRM system to support their customer interactions utilising the customer history, but the CRM should also be integrated with the ERP system to enable the service team to better field customer queries regarding the likes of inventory and delivery. The proliferation of CRM systems integrating social media functionality has enabled service to be extended across social networks and aided cross-channel escalation.
Channel silos are a serious issue for today’s businesses, given that they directly contradict the way that customers are now interacting with organisations. With customer path-to-purchase and beyond frequently utilising a multitude of channels, businesses must provide a more joined-up seamless experience.
Underlining this fact, Accenture Strategy’s latest Global Consumer Pulse Research indicates that channel-hopping ‘experimental’ customers have now emerged as the most profitable customers. With customer expectations rising, tolerance for disjointed and inconsistent experiences will only diminish.
As outlined above, businesses can begin to smash down the silos that exist, though it will take significant time and effort. But with a clear understanding of brand, merchandising and pricing strategies across all channels; deep insight into customer behavior and preferences; the right organisational structure and incentives; a robust strategy; and the right technical architecture in place, businesses can deliver the experience that customers are demanding now, and will be expecting tomorrow.
About Neil Davey
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.