Why So Much Omnichannel Dogma is Wrong

Companies Need Many Channels, Customers Prefer Only One or Two Channels

Why So Much Omnichannel Dogma is Wrong

July 2015 Copyright © 2015 Tata Consultancy Services Limited

Lisa Fairbanks, Lead – Customer Experience Solutions, TCSPriscilla Walter, Senior Consultant – Customer Experience Insight Solutions, TCS

Much investment has been made in the past decade as companies have sought to reach customers through multiple channels.

In reality, customers don't want to use all channels. They prefer one or two.

Any company’s competitive advantage lies in improving customer experience in the customer’s channel of choice.

Omnichannel Dogma, 2015

Introduction: Omnichannel Dogma

Customers don’t switch channels simply because multiple options are available.

Behavioral analysis of social data reveals specific motivations behind channel hopping. These include channel inertia and channel failover.

Busting prominent myths about creating an omnichannel experience will prompt effective channel design.


Truth About Customer Behavior


Myth: Because customers hop channels, companies must create a seamless, multichannel environment so customers can move easily from channel to channel.

Reality: Customers are mostly ‘uni-channel’ and exhibit channel inertia. Channel inertia is a customer’s preference to use one channel for many transactions. Only when that channel fails to meet their expectations do they hop.

The Omnichannel Myth

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When a brand does not meet the customer’s expectations for a channel, they will switch to a competitor.

Customers prefer to stay with one or two channels unless they are forced to move to another.


Law of Channel Inertia


Customers always have a next-best channel in mind.

If customers cannot complete a transaction in their channel of choice, they tend to ‘failover’ to a more expensive channel or to the competition.


Law of Channel Failover



Myth: Customers want to perform specific transactions in specific channels – therefore the transaction determines the channel.

Reality: Customers expect to perform all transactions in their preferred channel. To shift customers to new channels, companies must uncover what customers consider a complete channel experience.

All Transactions in Preferred Channel


Insight into customer expectations for each channel is crucial. Companies can increase customer adoption of digital channels with this information.

Source: TCS Retail Banking Social ChannelScore Analysis, 2013

The nine transactions retail-banking customers expect to complete in all banking channels.


Customer Expectations



Myth:Customer experience must be consistent. across all channels.

Reality: Customers have different success criteria for each channel. Branding and messaging should be consistent across channels, but the customer experience – how customer transactions are actually executed – is channel-specific.

Brands Win or Lose Customers by Channel


Companies must design an experience in the new channel that meets or exceeds customers’ expectations of the old channel.

Source: Forrester Research, ‘The Business Impact of Customer Experience’

Each channel must be designed to meet customers’ unique expectations for that channel.


Customer Experience Criteria



To keep customers satisfied, companies must deliver the complete experience in the customer’s channel of choice.

The right experience should be produced for each segment in each channel.

Winning in the Channel


Companies need to guide customers from conventional to digital channels by offering the best of both worlds.

Case study:To entice customers who value human interaction, a bank recreated the human experience in all its digital channels through video conferencing.


Overcoming Inertia


Businesses must understand their customers’ psychographics, particularly their loyalty behaviors.

Companies should utilize social and transactional data to engage customers in a deeper and meaningful manner.

There are great opportunities for telecom and financial services businesses in this regard.


Mastering Loyalty


Companies need to strengthen the customer feedback loop, and fully understand channel impact on customer loyalty.

Unstructured social data, customer psychographics, and transactional data should be analyzed. These insights must be incorporated into channel strategies.

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Conclusion: Designing Effective Channels

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Why So Much Omnichannel Dogma is Wrong

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