Archive for April, 2014|Monthly archive page

Delivering the omni-channel experience

New technology-based “channels” are giving firms the opportunity to more deeply interact with customers.  However, adding new channels to a traditional business can trigger marketing misalignments, internal strife and significantly higher cost.  Managers who can overcome these challenges to deliver an omni-channel experience can grow revenues, enhance customer value and improve margins.

A channel can be any intermediary between a customer and the manufacturer of a product or service. Traditional channel partners include retailers, outsourced call center and wholesalers.  New channels – handheld devices, apps and soon, wearable computers – are enabling a host of activities including mobile commerce, information gathering and social interaction. Entering this brave new world poses significant risks for a company.  Consider these three areas:

  1. Marketing

Programs designed for different channels can easily work at cross purposes, leading to reduced marketing efficiency and effectiveness.

  1. Information Technology

Adding new technology to heterogeneous infrastructures is not simple or inexpensive.  Furthermore, channel must operate reliably and securely across different platforms, networks and geographies.

  1. Organization

Channel managed in divisional silos hinders operational integration and drives up complexity, resulting in higher administrative costs and conflict.

All of nothing

To overcome these challenges, many firms are pursuing an Omni (meaning “all” or “every” in Latin) Channel strategy, whereby all sales and support channels work synergistically to seamlessly deliver a firm’s brand promise to each customer segment. In turn, the operating and IT model is organized to deliver on a consistent experience at every customer interaction.

A way forward

Some companies we have researched are meeting the omni-channel test – but many are not.  Successful firms recognize the strategic importance of their channels and share some key attributes, including:  a customer-centric philosophy; an emphasis on organizational and technical integration and a collaborative mind set inside and externally.

New software can help enable customer centricity across every channel.  As an example, NexJ Systems, a leading software provider, developed an enterprise-wide solution that gives managers the information and tools to manage all their channels for maximum performance.  According to CEO and Founder Bill Tatham, “At one of our large insurance customers, a single view of the customer and every interaction with that customer is shared by head office, the contact center and the field agents, allowing collaboration in selling and customer value maximization.”

One firm that is getting it right is TD, which is no small achievement in the complex retail banking space. At the core of TD’s effort are three key principles:

  1. Put the customer first

TD launches and manages channels & services based on what the customer wants, not just what their technology can provide.  The firm receives a daily flow of usage data across each channel generating real time insights on a user’s behaviour as well as needs states.   This customer-centric philosophy ensures each channel maximizes the value delivered at the lowest possible cost.

  1. Have a supportive organization

TD understands that consistent leadership, a clear ethos and engaged workforce can make or break the omnichannel experience. Their unique “Better Bank” culture emphasizes continuous improvement, collaboration and a longer view of program payback.  TD’s digital channels are not managed as siloed businesses.  Instead, they reside in a horizontal, enterprise-wide structure, which helps drive marketing & operational integration, rapid execution and higher system ROI.

  1. Be bold but implement prudently

Though keen to adding new technology, TD takes a prudent approach to introducing new services.  The Company adopts an end-to-end operating view and a “continuous improvement” approach to designing and implementing the right technology.  Before launching any capabilities, multi-functional teams carefully evaluate their options and select the ones that best fit their brand and IT strategies.

“Customers want us to know them, and we’re continually evolving our notion of convenience to make their journey with us more comfortable, no matter when, where or how they choose to bank with TD,” says Teri Currie, Group Head, Direct Channels, Marketing, Corporate Shared Services and People Strategies. “We are leveraging TD’s strong North American brand and scale to develop connections with our customers by focusing on their needs, looking specifically at their journey with us to understand how we can make their lives better.”

TD’s approach is working.  The Company is rated number one in customer satisfaction (according to J.D. Power) among the Big 5 Canadian Banks for In-person, ATM, Online, Automated and Live Phone.  This accomplishment is not merely a function of the company’s strong bank network.  TD is also number one Canadian bank for mobile banking according to Commscore.

Providing an omni-channel customer experience can generate significant rewards, though it might not be an easy journey.  Nonetheless, managers have little choice. In a low growth world, failing to prioritize an omni-channel strategy can result in missed growth opportunities, higher customer attrition and increased operating costs.

For more information on our services or work, please visit the Quanta Consulting Inc. web site.

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Digital transformation’s first step

Most leaders we speak with are considering how to use digital technologies to improve business and financial performance. Research shows that digitally transforming a customer interaction or operational process can significantly improve bottom-line performance and enhance competitiveness. To exploit the potential of digital technology, the optimal strategy is to identify high-potential/low-risk opportunities, find enterprise-wide technological solutions and learn as you implement.

Digital business can be a game-changer. According to a multi-industry McKinsey study, digitizing the customer experience can boost sales and profits an average 20% over five years. From an operational perspective, leveraging digital technology can drive cost reductions, leading to a 36% improvement in profits after five years.

Digital technology can impact every facet of a company’s business model. Two areas in particular can yield significant value:

  • Improve the customer experience: Digital technology enables customers to get information and tools when they want it, as they want it. For example, the rapid rise of mobile computing has triggered major changes in buyer behaviour. Banks have responded by delivering their products and services through “always on” and data-driven mobile channels — and enabling more targeted and timely cross-selling of complementary products.
  • Automate manual back-office tasks: Digitizing boring, repetitive and error prone tasks can reduce cost and improve cycle times. One of our clients reaped major efficiencies by automating basic-level customer service (through enabling customer self-service) and the review and payment of expense reports.

Every sector can benefit from enabling digital technology. In fact, some of the necessary ingredients are already in place. Specifically, many firms already incorporate digital technologies like Big Data analytics, ERP systems, and cloud services. Unfortunately, these tools are often deployed selectively within a line of business or functional silos with little consideration paid to the bigger enterprise-wide impact, standards etc.

Nominate champions

Digital transformation can be the most difficult business shift many companies face; it is part technology adoption, part process redesign and part behavioural/cultural change. This transformation should be not undertaken without strong leadership at the C-suite and board levels; it is vital that these mission-critical initiatives have senior champions who possess an organization-wide and holistic customer view. Some firms have gone so far as to create the role of a Chief Digital Officers to lead digital efforts.

Understand the impact

The return on your digital investment can be compelling — and difficult to accurately estimate. Firms can not rely only on aggregated numbers like McKinsey’s; they need to undertake a wide-ranging business-case analysis that considers the full range of benefits including cost savings, improvements in customer satisfaction and higher cross-selling rates. The business impact should be measured through digital targets to evaluate progress and influence future investment and roll-out decisions.

Take an end-to-end view

Maximizing the value of digital requires a consideration of scope and scale that cuts across the firm. For example, automating sales activities will have important implications for inventory availability, product design and marketing channels. Managers also need a 360-degree view of organizational issues like available skills, cultural impact and change requirements.

In the above areas, we have found that companies need a detailed view of user needs and behaviour as well as formal and informal workflows. Digital transformation will often precipitate a need to refine processes, the nature of the service, and in some cases, the operating structure.

Carefully choose your opportunity

Leaders need to prioritize what to digitize. Trying to bite off more than you can chew may ruin the business case, quickly bog down implementation, and lead to conflict over scarce resources. On the other hand, having too narrow a focus may leave significant value on the table. Whatever the choice, managers must ensure the potential business value is compelling, the selected initiatives align to business priorities and they have the right resources and partners to execute. Leaders also have to accept that over time, some lines of business, activities or jobs will be displaced by digital technologies; these shifts — often sudden — can have important organizational ramifications.

Going digital is a journey. Hype may turn transformation into a sprint but in reality it should be seen as a marathon. Starting with a digital pilot is prudent for the technologically risk averse or inexperienced. In some cases like iTunes or Netflix, digitally transforming a product may call for a totally new business model. Managers will maximize digital’s value when they: select “low hanging fruit” opportunities, prudently invest based on the right risk/reward profile, get their workflows optimized and ensure the right resources and change methodologies are employed.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.