Archive for the ‘Customer Experience & Service’ Category

The virtue of strategic consistency

“Adapt or die” may be one of the most over-hyped business phrases of the last decade. The reality is that most firms don’t face disruptive threats. And seasoned leaders understand the serious business risks of poorly designed transformations.

Fortunately, there is another way to ensure competitiveness and growth. Companies that stay true to a winning corporate strategy over the long run can be very successful. How do you do this, especially when unforeseen internal and external events test your convictions?

In an ideal world, leaders craft and follow a clear, compelling and multi-year strategic plan. Realistically, this approach often doesn’t survive more than a few quarters. Headwinds such as slowing customer demand, rising costs, or competitive moves often spur managers on to increase spending, or to make deep cuts. In essence, leaders overreact to short-term noise instead of focusing on the long-term market.

Furthermore, organizational dynamics can lead to management prematurely hitting the panic button. These include:

  1. Some leadership practices have a built-in bias towards quick reactions at the expense of deliberation and patience;
  1. The need to hit short-term metrics to meet goals creates incentives to do things at any cost;
  1. Without the anchor of an existing strategy or priorities, it’s easy for companies to zigzag with no clear direction.

All of this can lead to operational distraction, wasted investment, high employee turnover and a compromised brand image.

Staying the course

Consistency pays off over time. And companies that stick with a good plan will become more efficient and develop better relationships with customers and partners. Importantly, there is no trade-off between speed and deliberation in a strategically consistent business. Staying the course also enables quicker decision-making and follow-through.

Canadian telecom provider Telus Corp. has successfully used strategic consistency. Telus’s focus on service, brand and culture helped it outperform its rivals during the last 15 years, according to a strategy+business article published on Aug. 31. During this time, the Vancouver-based company’s revenue more than doubled to $12 billion and it returned 351 percent to shareholders, making it a global leader in the sector, the article stated.

Staying the course is particularly important in business services, where clients measure performance over years, or decades. For example, the investment-servicing company CIBC Mellon built profitable market share by remaining true to its goals of focusing on clients and reliability.

“Consistency over the long term has been critical to earning the trust of our clients,” said Claire Johnson, senior vice president, strategic initiatives. “Choosing the right strategy and supporting it through ever improving products and services is the key to long-term market success and customer satisfaction.”

Becoming strategically consistent

Any organization can maintain strategic coherency. Here’s how Telus and others have made it work:

1. Define values

Leaders need to define the winning strategic values (i.e. how the company competes and with what capabilities) that work for their firm and use these to guide important decisions and actions over the long term.

2. Take a long-term view

Compensation programs and reporting tools should prioritize long-term shareholder value creation and reflect the performance of key strategic values.

3. Encourage clear leadership

Every employee, supplier and shareholder takes his or her cue from what leaders say, and more importantly, do.  When short-term emergencies arise, managers need to have the patience, support and fortitude to focus on what is truly vital.

4. Understand the relationship between time and change

New events, competitive moves, or technologies often encourage a short-term overreaction at the expense of more deliberate thinking and prudence. Remember what Bill Gates said: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”

Mitchell Osak is managing director, strategic advisory services at Grant Thornton LLP

Rebooting wealth management firms

It’s never been tougher to be a wealth manager. A significant growth in assets under management over the past seven years (last week’s correction notwithstanding) has not translated into suitable top and bottom line growth. Many industry observers blame this on structural challenges that belie an easy fix and are not going away in the short term. To reboot profitability and position their firms for growth, wealth managers should go back to the fundamentals and re-examine where and how they compete.

Every company is experiencing strong headwinds including market uncertainty, insufficient scale, poor brand differentiation, fee compression, and rising costs (for regulatory compliance, information technology, etc.). On the horizon is another threat, technology-based “robo-advisers,” such as Toronto-based startup Wealthsimple, which use an automated platform to target specific, tech-savvy segments with a focused value proposition and lower fees.

It is the three “M” wealth management firms — mid-sized, me-too and middling — that face the greatest business risk. They can no longer be all things to all clients or get by merely on the strength of personal relationships. Their best approach would be to go back the fundamentals: re-examine the segments they pursue, choose the best value proposition for the target client and build the capabilities needed to deliver it. While each firm will define their own approach, they may want to consider two strategic opportunities:

The gender gap Most wealth management firms lack the practices, understanding and tools to satisfy and address one large but relatively untapped segment, women. Women create, control and influence a huge amount of wealth — upward of 39 per cent of U.S investible assets, according to research from the Center for Talent Innovation.

The research found that 47 per cent of U.S. female wealth creators (53 per cent globally) and a shocking 75 per cent of women under age 40 do not have a financial adviser. Among the U.S. women that do have an adviser, 44 per cent report they are not understood by their adviser. There is no reason to believe that Canadian female clients are managed or treated any better than their U.S. or global counterparts.

Wealth managers need to gain a deeper understanding of women investors’ needs, requirements and fears using quantitative and qualitative research (advanced tools like ethnography can help here). Insights and lessons can be gleaned from industries such as automobile and consumer electronics that have pioneered female-friendly marketing and product design. Tactics could include: crafting more gender-neutral messages and imagery, employing principles of behavioural finance to remove hidden bias, training advisers in gender-smarts and creating a more collaborative and inclusive client experience.
To best capitalize on this opportunity, consider customizing products and services to suit women, including creating a risk profile that is markedly different (according to a study from consultants BCG) from one created for a man.

“We discovered early on our female clients have unique needs. They look for more collaborative, education-focused advisers with a holistic, long-term approach to financial planning,” said Jennifer Boynton, an investment counsel at Toronto-based RealGrowth, which is growing by focusing on addressing the needs of female clients. “Addressing these needs, while still meeting their investment targets, has enabled us to consistently exceed acquisition, retention, and most importantly, client satisfaction goals,” she said.

Build digital capability Given the wide range of consumer activities that can be done on a smartphone or desktop, it’s surprising that digitization has advanced so slowly in this space. While incorporating new technologies can be difficult, it no longer can be put off. Doing so will help you remain relevant and attract key segments such as high income digital natives or millennials who are very comfortable performing day-to-day activities online.

Furthermore, going digital is vital for streamlining back-office operations, enhancing reporting and improving data and analytics capabilities.

Digital tools can provide clients with mobile, real-time and user-friendly views of their portfolio (including value, costs, transactions) along with self-serve options for research, recommendations, buy/sell and support. Advanced data analytics can be leveraged to proactively tailor your investment advice and content based on each client’s profile, or support internal investment decisions. Finally, many wealth managers can make better use of social media networks to disseminate information, build moderated communities of interest (say around tax planning) and gauge investor sentiment and needs.

When it comes to realizing the digital dividend, the secret is to understand your client’s needs, and build back from there. That requires companies to create a 360 degree review of each client’s assets, requirements and behaviour patterns, an understanding of existing processes and a willingness to re-engineer the client-experience model (including practices, culture and policies), before exploring technology solutions.

The App Economy takes off

Mobile computing is growing so fast and evolving so quickly it is hard to make sense of it all. The most recent leap, which includes sharing platforms, wearables and mobile payments, are based on unique service applications (or apps) that run on a smartphone and seamlessly handle everyday activities.

Although still in its early days, the rise of the app economy will have profound implications on the nature of many industries, the ways consumers interact with businesses and how companies structure their operations.

Since the mid-1970s, the world has gone through a technological revolution roughly every 10 years. It’s then taken between seven and 10 years for the new technology to achieve mass market adoption. However, the app economy is different. Many of the upstarts in this sector quickly started making gobs of money, usurping their competition and expanding globally.
For example, service-sharing platforms Uber and AirBnB are disrupting traditional industry players and are significantly changing consumer behaviour and value expectations. Their rapid growth plus big upside make them worth more than the traditional taxi and hotel companies they compete against. This one example should be a clarion call for more traditional businesses battling it out in the consumer and corporate services markets.

The stakes are huge: Mobile commerce will account for 24.4% of overall ecommerce revenues (which are themselves growing rapidly) by the end of 2017, a study by marketing automation firm Hubspot found. Add incremental revenues from app-based sharing platforms and you are probably north of $100 billion in mobile ecommerce revenues in the U.S. alone.

Among the many facets to consider, I believe leaders ought to pay close attention to these two:

Service apps take over

For most people, life is increasingly centered around a mobile device and the services it enables. Increasingly, apps address your personal needs, often in ways never imagined. Uber and Lyft are replacing car ordering; TaskRabbit is handling our deliveries and dating apps such as Tinder are helping people find a life partner.

So too are people’s professional lives poised for change. A recent job-matching app, Switch, allows candidates to thumb through job listings: flick left if uninterested and right to register for a potential work match. Another swipe-if-you-like competitor, Jobr, uses information from LinkedIn to recommend jobs that candidates might find interesting. Since its launch last year, Jobr has submitted more than 100,000 job applications for its members each month.

Businesses are also jumping on the bandwagon, using apps to re-engineer traditional but important practices. Last year, Zappos, an online retailer based in Nevada, scrapped formal job postings and replaced them with a new site encouraging candidates to engage with each other and the firm in a way not dissimilar to online-dating forums.

Although the service apps business is growing rapidly, there is still plenty of upside left. Existing providers can drive higher usage and fees by adding new functionality, entering new geographic markets and retuning their service to appear less like a standalone, phone based-app. As well, there are many opportunities for a high-quality model in unexploited personal and corporate services categories.

Tightening the relationship

Apps are now the focal point between the customer and company. Companies can now engage deeper and longer term with its customers to create a 1:1 relationship, and with it higher revenues, loyalty and satisfaction thanks to three symbiotic forces: ‘always on’ connectivity via smartphones; advanced data analytics and; collaborative social technologies.

To fully leverage this opportunity, transaction-orientated businesses will evolve into service subscribers requiring them to engage throughout a customer’s or product’s life cycle irrespective of channel. In retail banking, for example, you might receive a message on your smartphone with your daily account balance, personalized RRSP advice in January, or ways to spend your credit card’s loyalty points.

To make long term engagement a reality, companies will need to redesign their service/product model (i.e. what and how they deliver value), pricing strategy and marketing programs, not to mention their technology infrastructure. Moreover, their apps will need to evolve beyond transaction-based functionality to include personalized content, multi-platform integration, location-based services and recommendation engines.

To avoid disruption and to capitalize on opportunities, companies should already be exploring and investing in apps applicable to their market and relevant to their customers. But they will also need to be mindful of getting it right: thoroughly understanding customer needs, designing a seamless customer experience, building practical data analytics capabilities and delivering compelling and relevant content. However, to truly take advantage of the app economy, leaders will also need to be mindful of the impact of emerging technologies like wearables and mobile payment services.

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

Gamification boosts customer engagement at Insurance firm

What is more boring, but useful, than learning about your workplace RRSP plan? What is more fun, but useless, than playing games at work?

“We regularly look outside our industry for innovative ways to help our customers learn more about retirement savings,” says Nadia Darwish, vice president, Market Development at Sun Life Financial. “Gamification was a natural fit.”

Gamification is less convoluted than the word implies. Essentially, the idea is to combine the basic appeal of video games — purpose, competition and the desire for mastery — with behavioral psychology to increase revenue. This could mean improving productivity, enhancing engagement or increasing sales.

Ms. Darwish and her team released an online game called Money Up in late 2014. Money Up features “missions” exploring the basics of retirement planning, investment asset allocation and different financial products. Players are quizzed about what they’ve learned before they can proceed to the next level and, like a classic arcade game, there is a leaderboard so employees know how they stack up against their colleagues.

The business results exceeded management’s expectations, Ms. Darwish says, generating significant improvements in participation, contributions and product penetration. She attributes success to the game’s seamless integration with Sun Life’s broader “financial literacy” program and is particularly happy that Money Up reached “the unique Generation Y audience in a way that resonates with them.”

Making simple, functional games is easier today than ever before. With a modest investment, a behaviour-changing game can be designed, tested and released within six months. Here are five tips for developing a gamification strategy based on the experience of Ms. Darwish and her team:

Don’t treat gamification like a side project. Gamification must be considered a strategic initiative and should incorporate input from senior leaders.

  • Don’t gamify in a silo. Adopt a collaborative approach by soliciting feedback from both internal and external stakeholders at every stage of development.
  • Don’t lose sight of your goal. Work backwards from your desired result (e.g. educate customers) to ensure that your game is more than just fun.
  • Don’t lose sight of your audience. Put the needs of your potential players ahead of your messaging by developing a product for them, not you.
  • Don’t set it and forget it. Monitor performance and solicit customer feedback after launch in order to develop fixes and improvements on the fly.

When a gamification strategy fails, it’s rarely for lack of enthusiasm. Here are three common pitfalls:

  1. Uncertain ownership. It can be difficult to determine who should ‘own’ a project that necessarily spans multiple departments within an organization.
  2. Narrow thinking. It can be difficult to articulate a compelling business case for something with which an organization has no prior exposure.
  3. Lack of knowhow. It can be difficult to develop a successful gamification strategy without experience in game design and behavioural psychology.

But the potential benefits of gamification are too significant to throw the baby out with the bathwater. The trick is tempering ambitious vision with lean resource allocation and a willingness to pivot along the way to mitigate risk and keep the project within its intended scope.

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

1:1 Marketing is here

If you are a forward-thinking manager, chances are you’re thinking about ‘personalization.’ Delivering a unique, tailored, 1:1 interaction with a customer based on previous interactions, the hardware they are using, their particular needs and location within the purchase cycle is a very compelling idea — if you can pull it off. Where do you start?

Thanks to the arrival of mobile computing, powerful smartphones and advanced data analytics, personalization is taking off. During the pre-purchase phase, firms can deliver special promotions or compelling content to make the shopping experience more engaging. Marketers can use social shopping communities to identify product trends and use these insights to enhance their product mix by segment. Companies can even target shoppers in-store in real time with relevant, personalized, location-based advertisements and promotions, thanks to technology such as Apple’s iBeacon.

Product companies are using personalization strategies to stand out by offering unique products such as do-it-yourself t-shirts, blankets and home decor featuring custom messages and designs. Web-based firms like Amazon are successfully using personalization tools to drive revenue, conversion and average transaction value. FRHI Hotels & Resorts uses personalization to create unique experiences for their three brands (Fairmont, Raffles, Swissôtel) both pre and post stay.

“The key to winning in today’s competitive marketplace is to have a universal commitment to putting customer’s first, understanding their stated and implied needs and providing solutions that address those needs on their terms,” says Jeff Senior, executive vice president and chief marketing officer of FRHI Hotels & Resorts. “It requires a holistically aligned organization, and is not a marketing initiative, but a company commitment.”

FRHI Hotels & Resorts maintains a single, holistic profile of each guest and their needs, with the ability to customize their stay, the promotions they receive and the prices they pay. This profile can seamlessly migrate from call centre and hotel to mobile device and social media platform. This personalization strategy has been an important driver in enhancing customer satisfaction and brand image, leading to market share increases in each of the past six years. Some of the best practices they follow include:

  • Align personalization strategies with well-defined brand strategies and values.
  • Act as an insight-driven organization. For example, the Company leverages big data to get a single, holistic customer profile. Furthermore, Fairmont expends a considerable amount of effort on customer research and social media analytics to define the ideal experience, with no detail escaping their attention.
  • Put the customer by segment (their needs, requirements and expectations) at the center of all operations and planning. Careful attention is paid to articulating the customer opportunity, understanding all business issues and producing creative solutions that fits local requirements.
  • Focus on real-time reputation management. Measure, track and evaluate a variety of customer metrics to better leverage existing programs and identify hiccups.
  • Optimize the operational (online and physical) and talent model to ensure alignment, collaboration, responsiveness and seamless execution.

Implementing your own personalization strategy can improve the value your firm delivers, the precision by which you target customers and the marketing efficiency of your programs. But first you need to do some serious thinking about your customers, brand and organization. Firms looking to implement a personalization model need adopt a customer-centric mindset that engages the entire organization. To do this, key activities such as IT, marketing, research and support must act in an integrated fashion, sharing the same information and strategic playbook. This four-step framework can help take a firm from a strategic vision to a personalized experience:

  1. Segment your customers by lifetime value, needs, and habits.
  2. Categorize them by the digital and physical channels they prefer across their entire purchase and support journey.
  3. Customize and choreograph your offering and experience based on where they are in this journey.
  4. Ensure your capabilities (people, systems, processes, assets) can support your personalization strategy.

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

Using behavioural economics to trigger action

Behavioural economics posits that all human behaviour, including in business, is shaped by irrational and unconscious influences, such as bias, social pressure and cognitive inertia. The notion of psychology as a driver of economic action is not new: As an academic discipline behavioural economics dates back to the 1970s, and the foundational principle back at least to Adam Smith’s The Theory of Moral Sentiments (1759). Behavioural economics has, however, only in recent years found widespread currency within the business world, spurred by a plethora of bestsellers, including Thinking Fast and Slow (2011) by Daniel Kahneman and Predictably Irrational (2oo8) by Dan Ariely.

Increased interest from the business community is due to the insights gleaned from the discipline, which have been used to successfully “nudge” customer behaviour in a variety of sectors, such as wealth management, insurance, customer products and retail. Specifically, behavioural economics has been used by product managers to guide consumers toward certain product choices (i.e., “choice design”), by marketers to develop brochures and Web sites that more persuasively communicate marketing messages and by service managers to design better support experiences.

The field can provide hundreds of potential “triggers” to augment behaviour, depending on the business objective, situation and context. Psychologists Robert Cialdini, Noah Goldstein and Steve Martin identify 50 different possible applications in The Small Big: Small Changes That Spark Big Influence (2014). Three among the list include:

  1. Leverage social proof: People will make the same decisions as a group with which they identify. Nudge people to adopt a new behavior by showing them a training video featuring their peers doing the same thing.
  2. Invoke first names: Get and keep people’s attention by frequently using their first name. A sales representative’s repeated use of a prospect’s name will cue their attention through the clutter of other sensory inputs and focus attention on the key message.
  3. The power of loss avoidance: Individuals strongly prefer avoiding losses to acquiring gains. Marketing studies have shown that consumers would rather avoid a $5 surcharge then get a $5 discount even though the net effect is the same.
    Case study: behavioural economics in action

Communications Case Study

A technology company was struggling with customer support issues, resulting in unsustainable levels of customer churn, high support costs and wasteful discounting. We were tasked with identifying the root cause of the problem and recommending fixes.

We reviewed the support scripts and escalation processes and listened to call records. Using the lens of behavioural economics to look for unconscious biases, explicit and implicit incentives and insidious social pressures, we discovered both that the existing scripts were ineffective and that the prescribed escalation process was not being followed by most service reps.

While management believed more resources and training were the answer, we convinced them to first experiment with a pilot program that featured rewritten scripts and process redesign. These changes included a variety of nudges to trigger the desired service experience, including:

  • Establishing a rapport from the get-go: People are more easily persuaded by those that they like and have some connection with.
  • Starting with the bad news but ending on a high note: Getting bad news out of the way shows empathy, acknowledges responsibility and allows for a good finish.
  • Following the script: Because a good process is only effective if it is consistently applied, we recommended having service reps formally and publically commit to following the revised protocol.

By implementing insights gleaned from behavioural economics, customer satisfaction scores increased, service escalations fell and cross-selling rates improved.

Behavioural economics for your business

As mentioned earlier, how you should apply behavioural economics insights to your business depends on your circumstances and your goals. However, here are five general tips to guide your strategy:

1.  Understand the business context:  What business problem are you trying to solve?
2.  Audit key customer decision points:Look for hidden bias, social and incentive pressures and opportunities to catalyze desired actions.
3.  Prioritize your opportunities: The economic, operational and brand impact of each decision should be considered.
4.  Identify suitable nudges:This should involve an optimized choice design that guides actions and decisions toward your desired result.
5.  Experiment, measure and scale: Only then will you discover the optimal strategy for your business.

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

Maintaining a winning customer experience

A customer experience strategy is an amalgam of practices, systems and values that guide interactions with customers and prospects across different sales channels, platforms and geographies. In an increasingly competitive and commoditized marketplace, creating a ‘wow’ customer experience is one of the few tools left for companies to retain customers, sustain margins and build a long-term competitive advantage.

Elements of a good customer experience strategy include customer-centric process design, passion-driven employee engagement, coherent interactions across multiple touch points and operational integration. Companies as diverse as Nordstrom, Lexus, Disney and Singapore Airlines have built industry-leading market share, profitability and shareholder value by consistently delivering ‘wow’ (i.e., higher than expected) customer experiences at every interaction.

In many cases, however, designing the ideal experience is the easy part, particularly if it is built on a foundation of product, brand and service excellence. The tougher challenge is maintaining this capability over time. Companies can preserve their winning customer experience by (1) developing real-world measurement systems, (2) institutionalizing key values and (3) staying close to changing customer needs and requirements.

Dropping the ball

Ten years ago, my company worked with the functional teams of a large IT solutions company to develop a customer experience strategy for their sales, support and professional services. The model was developed by working backward from their desired client interaction, and tailored to their different segments, customer types and channels. The new customer service strategy embraced every touch point, from the sales teams scripts and customer on-boarding practices to support triaging and billing processes. After only 12 months in market, the new model was credited with boosting loyalty as well as cross selling rates.

Three years out, however, the firm’s growth stalled. The metrics showed declines in customer satisfaction, online engagement and service levels. A deeper analysis indicated that their customer experience had degraded due to a variety of factors: changing client requirements and expectations (they went higher); a lack of organizational continuity (increased turnover of front-line staff prevented the inculcation of customer experience values into new employees); and clumsy integration of new enterprise software (which reduced service levels and complicated processes). Ultimately, a gap had developed between the initial customer experience strategy and its supporting capabilities.

Sustaining your customer experience strategy

Companies can preempt these issues by better institutionalizing their customer experience management practices and values. Some ways to do this include:

  • Frequently research your customers to stay in sync with their dynamic needs and requirements as well as ensuring your customer experience is consistent through new sales and support channels.
  • Make cultural fit and internal alignment a priority. Every customer-facing employee must inculcate customer experience purpose and values (e.g., ‘the customer is always right’). Rotating customer ownership through senior leaders in key departments is a good way of keeping focus and alignment.
  • Develop early warning systems to track progress, identify problems and generate learnings that can improve existing programs. These systems should track actionable metrics that align to each department’s and individual’s performance goals.
    A Canadian leader

One company that does a good job of maintaining a compelling customer experience is Sun Life Financial. The insurance and wealth leader did all the right things when they designed their customer experience in 2012, such as linking the program to key business metrics and adopting a global and holistic business view. Moreover, Sun Life Financial did not leave the program on auto-pilot.

To ensure focus and follow through, Sun Life Financial created a global working group made up of senior leaders from many departments, including marketing, finance and operations. This group meets often to track and review a variety of customer metrics, including net promoter scores and how they are tracking against improvement measures across all lines of business, as well as to review the latest customer and brand research. Importantly, they are not a corporate rubber stamp body: Their strategic mandate includes exploring opportunities for scale economies, sharing learning between regions and businesses and recommending changes in tactics (if necessary) so that customer needs are placed first and foremost.

“Our customer experience program reinforces the philosophy that the customer is at the centre of everything we do,” says Mary De Paoli, Executive Vice-President, Public & Corporate Affairs and Chief Marketing Officer, Sun Life Financial. “Delivering exceptional customer experiences requires a commitment to asking your customers, regularly, how you can improve the products and services they depend on from you. We believe this is the number one driver of the long-term success of our business.” Although it is still early days for the working group, the program has been credited with creating a winning online experience and better enabling the channel (e.g., plan sponsors, brokers and consultants) experience.

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

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.

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.

Marketer as anthropologist

Many companies prioritize learning customer needs above any other marketing activity so that they can create better products and service experiences. Typically, marketers will use traditional qualitative techniques like focus groups, surveys and one-on-one interviews. Unfortunately, these tools often fail to generate breakthrough insights. Standard qualitative methods are good at telling firms what is happening but not the why it’s happening. To get to the root cause of a consumer’s actions, marketers need to explore the recesses of their mind to identify subconscious drivers of behaviour. Anthropology is a very effective way to do this.

Simply put, anthropology is the study of people and civilization, past and present. It incorporates teachings from a wide range of disciplines, from psychology and biology, to the humanities and sociology. Anthropology is increasingly being used by companies (Starbucks, Lego, Herman Miller and Nokia are pacesetters) to better understand latent consumer needs and as well as societal and religious influences on their behavior.

In action

The following example shows anthropology in practice. A firm in the spa industry engaged us to help redesign its customer experience and service offering for female patrons. The client wanted to address any unmet customer needs and better differentiate their customer experience. Conventional research techniques regularly produced muted feedback, which led to copycat store designs and products. We wanted to go deeper into the consumer’s subconscious to find unmet needs and drivers that triggers behaviour. To get there, we employed anthropology to probe fundamental beliefs and values around their body image and wellness as well cultural influences. For example, how do women define beauty?  What role does human touch play? And, how can a spa experience help satisfy a women’s intrinsic needs? Our findings upended conventional thinking and led to a revamping of how the facilities were designed and how the services and benefits were communicated, resulting in higher client retention, an enhanced brand image and increased rates of cross selling.

Conventional qualitative research techniques take people at their word. This can be risky for brands.  At their core, consumers are often irrational, driven by motives or external influences that are unseen even to themselves. Using anthropology as complementary research can produce a more holistic and penetrating view of the consumer in their real life condition. Likewise, anthropology’s rigorous, academic-driven methodology preempts the emergence of erroneous assumptions around a customers’ behaviour that could have been shaped by a firm’s culture, the bias of its managers, or increasingly, the large but imperfect data stream flowing in.

Anthropologist have a number of data-collection instruments at their disposal including artifact analysis, quotidian diaries, and observational studies. Importantly, practitioners approach their research without hypotheses, gather­ing large quantities of information in an open-ended way, with no preconceptions about what they will find. The collected data is raw, personal, and first­hand — not the incomplete or artificial version of reality that is generated by most market research tools.

Anthropology is particularly helpful in understanding the dynamic world of social media. “Companies are beginning to use anthropology to understand the stream of consciousness within social medial that flows with ‘here’s what I’m doing/thinking/wanting now,’” says Lynn Coles a leading marketer. “Anthropological research helps us better understand and inhabit the social communities to identify behavioral patterns as well as the emerging dialect within a particular community so we can better communicate with our target consumers.”

Basic approach

1. Frame the issue

Anthropology requires the marketer to frame the problem in human — not business — terms. Doing so gets to the core of how a customer experiences a service or product. For example, a business problem could be:  How can a wireless provider reduce churn? The corresponding anthropological issue would be: How do our customers experience our service, and why are they leaving?

2. Assemble the data

The raw data is codified in a form of carefully organized diaries, videos, photographs, field notes, and objects such as packages. Although this open-ended data collection casts a very wide net, it requires a disciplined and structured pro­cess that needs to be overseen by anthropologists skilled in research design and organization.

3. Find patterns, insights

The anthropologist then undertakes a careful analysis of the data to uncover themes or patterns. When organized in themes, a variety of insights will emerge about how a customer feels, their goals and what drives their actions.

Of course, traditional quantitative and qualitative research methods have their place and should remain part of a marketer’s analytical tool kit. However, anthropology will play an increasing role in uncovering the consumer’s subconscious needs as well as societal/religious behavioral drivers, areas that are largely impervious to standard qualitative techniques. Producing this holistic view will allow marketers to design more relevant products and services that deliver higher value.

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