Multi Channel Customer Management

www.customercentria.com

customer centriaThe Customer Engagement & Experience Company

Multi-channel Customer Management

Date: 23/02/2012

How to channel the process of Multi-Channel IntegrationMoving on from Customer Relationship Management (CRM) and its significance in the lifecycle of an

organisation, the journey gets more challenging and innovative. With the evolution of CRM and Marketing

Automation, various factors came into play, affecting marketing decisions and campaign management. The

dynamics of the game have changed radically, and today technology, user expectations, and stiff competition, are

increasingly forcing enterprises to support their customer service operations through various effective delivery

channels. It all started with walk-ins, leading to a strong dependency on call centres – but in current times, the

proliferation of the Web has inflated customer expectations, as they want their requests – whether information

related or service related - to be fulfilled fast, almost real-time.

Considering these factors, managing customer relationships, is deeply connected to marketing strategies, with

an aim to generate a 360-degree view of the consumer.

Websites, email, direct mail, text messaging, and call centres are all key elements to an integrated marketing

program, but a coordinated multi-channel program takes it to the next level by incorporating data and new

marketing technology for better response rates. Technology, customer expectations, and competitive forces, are

increasingly compelling enterprises to support customer service operations through several delivery channels.

Multi-Channel Customer Management covers the design,

deployment, coordination, and evaluation of channels through which

enterprises and customers interact, with the goal of enhancing

customer value through effective customer acquisition, retention, and

development.

An enterprise comes across the following prominent challenges when

it comes to designing a multi-channel framework for customer

management :

80% of shoppers are more likely to do business with a

retailer who offers them easy and flexible interaction

across all channels by means of Multi-Channel

Integration. At the same time, 70% of all retailers find

cross-channel customers more profitable because they

spend more - Recent NCR Poll


1. Data Integration across Channels

Enterprises typically viewed each delivery channel as a separate entity. However, with each delivery channel being

separate and operating in isolation, each with its own data, leveraging information across a multitude of customer

contact channels was not possible. Neither was it possible to provide a consistent customer service experience. Due

to lack of a single information repository, companies traditionally spent large amounts of time and money writing

integration programs to communicate between disparate systems.

In such a complex setup, the systems will rarely operate in real time, delaying data synchronization. This can cause

embarrassment to companies and aggravation to customers, when updates to one channel are not reflected

immediately in the others.

The second issue is that it adds overhead. The integration must be implemented, administered, and maintained

independently of the actual customer service applications for each delivery channel. The problem, complexity and

costs are magnified each time a change is made to a channel application.

To resolve this issue, multi-channel integration is imperative. The ideal position for a firm would be to have

complete Customer Data Integration (CDI), or an integrated, single view of the customer across the channels. The

ideal database would depict which channel(s) each customer accessed during each stage of the decision process,

including competitors' channels.

In turn, CDI gives rise to the following questions:


Which data needs to be integrated?

Is it sufficient to integrate purchase data only, or should search data also be integrated?

Which marketing activities benefit from integration?

Cross selling is an obvious beneficiary, but what about other marketing activities benefit?

What is an acceptable level of data integration? Is it 100% necessary?

Does data integration pay off?

Is it worth the investment to derive a single view of the customer?

2. Understanding Customer Behaviour-time

Managers must understand how customers choose channels and what impact those choices have on their overall

buying patterns. Therefore, the key questions pertaining to customer choice include the following:

In turn, CDI gives rise to the following questions:

What determines customer channel choices? What channel attributes are important?

Do marketing communications influence channel choice?

Is a multi-channel approach means to segment customers? That is, are there distinct segments of

consumers who use various channels and combinations of channels?

Do customers make channel decisions according to the channel or the firm?

Does the customer first say, “I will check out a few websites of retailers that sell HDTVs,” or does he/she

say, “I will check out Sony’s website, then go to the store to get a better look”? Similarly, during the search

stage, do customers consider firms at all?

What is the impact of the multi-channel environment on customer loyalty?

Does a multi-channel strategy grow sales for the firm?


3. Channel Evaluation

When the firm has gathered data and obtained an understanding of the consumer decision process, it can

evaluate channel performance. The key questions in this step include the following:

4. Allocation of Resources across channels

The firm's channel policy is manifested in its resource allocation. Therefore, key questions include the following:

5. Organisation Structure and Cross Channel co-ordination

According to US online marketers surveyed in June by an

interactive marketing agency Zeta Interactive, their

organisational structure was the top problem, suggesting

many companies are still keeping marketing activities

soloed rather than working to coordinate them.

Technology and the problems of working with multiple

vendors and agencies were also an issue, along with a

simple lack of cross-channel expertise.

While most marketers know the benefits of channel integration, the

limitations of a soloed organisation are currently the primary reason for

companies not integrating their marketing efforts. It’s tough for

managers to co-ordinate the objectives, design, and deployment of

channels. The dilemma is the degree of channel co-ordination that can

range from complete separation to full co-ordination.

What is the contribution of an additional channel to the firm? If the firm were to add a channel, what

impact would it have on sales and profits?

What is the contribution of each existing channel? This input can be difficult to assess when the

contribution of a channel emerges during the search phase and the company lacks an integrated database of

search and purchase across customers.

What channels synergise best with others? The full impact of the firm’s set of channels should be more than

the sum of the parts, and synergies should exist, but which are the best?

What is the optimal channel mix?

How necessary is a web presence?

What is the impact when channels are removed or downsized?

How should marketing resources be allocated across channels?

How much should be spent designing and developing each channel, and should advertising and

promotional activities be designed to drive customers to specific channels, or should they be channel

neutral?

What determines the equilibrium of channel structure in an industry? Should all firms offer the same

channels to customers? Will firms differentiate their channel strategies?


6. Current Technology

7. Cross Channel Expertise

Investment and extensive usage of technology is another major factor,

which impacts multi-channel integration, as many enterprises have

already invested profoundly in technologies that support separate

systems. To connect all of them would mean implementing

integration at the enterprise level, which might demand a technology

change that involves a major cost.

An emarketer report revealed that 43.3% of senior marketers in the

United States consider cross-channel coordination of marketing

campaigns as extremely vital and 46.4% consider it as vital.

One of the major problems that marketers face when firms go for

enterprise-wide channel integration is lack of cross channel expertise

on part of marketers. This results in resistance to multi-channel

integration as touch points are not lucid and ease of moving from one

channel to another is not known.

Marketers must overcome their own organisations’ hurdles to cross-channel integration in order to effectively

achieve their goals, breaking down structural silos and educating themselves about integrated marketing best

practices to overcome other logistical challenges and achieve coordinated campaigns.


Approach A growing segment of customers, today demands lower prices, higher quality, better selection, and round-the-clock

access. They expect to reach organisations (banks, retailers etc.) through all possible channels. Organisations by

now have inferred the need for customer communication via multiple channels and realised the necessity of

reaching customers via multiple channels. But the challenge lies in setting up a centralised environment to develop,

execute and monitor campaigns across multiple channels which will allow them to achieve better visibility into

effectiveness of marketing spend.

As mentioned earlier in the document, websites, email, direct mail, text messaging, and call centres are all key

elements to an integrated marketing program, but a coordinated multi-channel program takes it to the next level by

incorporating data and new marketing technology for better response rates.

Integrate Inbound and Outbound Marketing Programs

“Marketers know they need to execute multi-channel programs to reach their target audience

with a tailored message at the right time using the right media. Their biggest challenge to all but

the simplest of programs is architecting and executing in a manner that minimises the cost and

complexities that are inherent when you deploy with varied work flows, multiple data processes

and vendors for each channel.”

- Philip Chischportich, CEO of Conversen, a leading multi-channel technology firm.

AnalyticalData Store

OperationalData Store

ContactOptimization

OfferManagement Budgeting

CampignManagement

InteractionManagement

Planning (Marketing Calendar)

Outbound channels

Inbound channels

Customers

Centralizeddecision engine

- Centralized business rules

- Arbitration logic

- Business constraints

- Customer contact policies

DirectMail

Branches/Stores

MobileDevices

Websites

E-Messaging

ContactCenters

@

InteractionManagement

Outbound channels

Inbound channels

Centraliseddecision engine

- Centralized business rules

- Arbitration logic

- Business constraints

- Customer contact policies

Source: Forrester Research, Inc.


Multi-Channel Customer Management FrameworkOrganisations must follow an approach, which will enable them to do the following:

Assess their present state of multi-channel capabilities to identify areas within their business and IT

landscape that can be optimised for improving the multi-channel capability.

Assess their present state of channel integration across people, processes and technologies to identify

potential gaps and challenges in the individual channels.

Define the future state, based on the current level of multi-channel maturity and customers' business goals

Evaluate the scalability and relevance of the existing systems/technologies with respect to the new multi-

channel requirements

Formulate a transformation and technical roadmap for implementation of the defined multi-channel

strategy

Implement the defined multi-channel initiatives

Monitor, support and perform continuous improvements

A typical approach that organisations can take to implement multi-channel integration is shown below -

Select a multi-channel strategy that creates an advantage and benefit for your consumers, such as the

ability to check the availability of an item prior to visiting the store.

Define a Multi-Channel network architecture that clarifies channel roles and investment priorities from

customer value-based perspective

Manage customer experience seamlessly on a cross-channel basis and consistently deliver the brand

promise

Build capabilities needed to market a multi-channel enterprise – this can be achieved by making sure that

CRM capabilities enable multi-channel management

The challenges and complexity of multi-channel marketing can be overwhelming, but before organisations take

to an approach, there are four key steps which prove useful in laying a strong foundation to the approach –

Consumer Channel Perceptions and Preference

Purchase After Sales

ChannelEvaluation

Data

Post Evaluation

Resource Allocation- Channel selection- Investment

Channel Coordination- Price, Production, Promotion- Design, Distribution, Service

Channel Strategy

Search

Channel Ak

Channel Bk

Channel Ak

Channel Bk

Channel Ak

Channel Bk

ProblemRecognition

A Framework for Multichannel Customer Management

SOURCE: Adapted from Blattberg, Kim and Neslin (2006).


The above figure shows a framework that joins the customer's and the firm's decision processes.

Step 1 - Customer progresses through need recognition, information search, purchase, and after-sales service. For

example, a customer may realise he or she needs life insurance. The customer searches various channels for

information about life insurance, decides on which channel to make the purchase, and then receives sales support

(advice on increased coverage, etc.) via a particular channel.

Step 2 - First, customer perceptions and preferences drive channel choices (e.g., the customer may prefer the

Internet for search because it is easy to use).

Step 3 - Second, the customer learns from and evaluates his or her experiences, which feed back into the

perceptions and preferences that guide his or her next shopping task (e.g., the customer may learn that the Internet

search did not answer all the important questions).

Step 4 - Third, the customer chooses both channels (A or B) and firms (k), so from the customer's perspective, it's a

two-dimensional choice.

Typically, the management decision process starts with data generated by the customer decision process. These

data are at the customer level—what channel(s) did the customer use for which purpose, and what did he or she

purchase? Consistent with the emphasis on the customer, the firm's decision process is driven by such customer-

level data. After the data have been assembled, the firm evaluates its channels (Are they profitable? Are they serving

the purposes for which they are designed?).With this knowledge in hand, the manager can specify a multichannel

strategy (which channels to employ, how to design them, how to allocate resources across channels) and a

marketing plan (pricing, assortment, service levels) for implementing the strategy.


Based on the challenges mentioned in previous section and the framework presented in this

section, organisations would want to follow an approach that covers the following -

1

2

3

4

5

6

This is a generic approach, which can be utilised across verticals, but the degree of overcoming the challenges could

be different for each vertical based on what all channels are applicable, customer segment, technology used and

other factors.

Integration of customer data to create a Customer Data Integration (CDI) source, which

would provide a single customer view resulting in prompt analysis of customer data.

Understand customer behaviour based on customer data within CDI.

Once organisations get handle over customer behaviour, the next step would be to

determine customer's channel choice, there could be various variants like marketing

efforts, channel attributes, social influence, situational influence etc. which determines

his/her channel choice.

Once organisations get to know customer's choice of channel, it's important to evaluate the

profit contribution by all the channels used.

Based on valuation, organisations would want to allocate resources like marketing spend

and other resources to most valued channels, for e.g. if one particular channel valuation

indicates that that channel to be the most preferred and most profit contributing for

customer acquisition then allocate maximum resources to further increase the

acquisition.

Organisations should look to entail channel co-ordination strategies by developing

channel synergy based on aspects like customer segmentation and functions. For e.g.

some customers might use Internet to search about a product while another customer

might choose to use call centre services for product information. Organisations need to

ensure that profit-driving factors like product rice need to be consistent across channels.


Unified view of customer across multiple channels

Identification and capture of opportunities for increasing value per customer

Streamlined cross-channel order fulfilments' through integration of all management systems involved

Increased choice for customers in the way they can interact

Ability to switch between the channels depending on customer preference and interaction type

360-degree view of customers and unlimited personalisation and targeted promotions through cross-

channel customer data integration and analysis.

Increase of efficiency through sharing of process, technology and information

Increased customer loyalty through cross-channel loyalty programs, where customers can earn points or

credit that can be accumulated and redeemed from any channel.

24 x 7 customer support by leveraging increased customer touch time across the multiple channels

Consistent brand, product, price and promotional information across all channels

Increased convenience and improved experience to customer

Increased organisational flexibility

Increased efficiency in exploiting customer data to identify customer needs

BenefitsWith a Multi-Channel solution and framework is in place, organisations will realise the following benefits–

BottomlineBy now, we realise that a multi-channel framework helps achieve a unified view of the customer. This leads to better

effectiveness and convenience for organisations in terms of capturing data coming via various channels. What next?

The incoming information or data comprises of feedback, criticism and many individual views and thoughts – all

these demand attention and action post analysis.

In the next and last part of the series, we will look at Customer Response Management, which is a key challenge in a

multi-channel environment due to the diverse nature of channels. The stress will be on how channels integrate and

how the response received from the customer is managed and exchanged by various channels to generate positive

brand value and higher business returns.

Multi Channel Customer Management

Technology

Transcript of Multi Channel Customer Management