Channel Optimization

20/11/2020 1 By indiafreenotes

All organizations at one time or another have dealt with happy and unhappy customers, profitable and unprofitable customers as well as ‘high maintenance’ and ‘low maintenance’ customers.  What if an organization had a magic wand and could optimize the channel(s) that each of their customers uses such that each customer gets to use their preferred channel(s) while the organization get to maximize the profitability of each customer by encouraging them to use the optimal channel(s) based on the organization’s cost-to-serve the customer?  Sound enticing?  I hope so since beyond a doubt channel optimization is the most important area that impacts an organization’s profitability.  Here is more detail on what is channel optimization and how it works.

A key component towards channel optimization as noted in the diagram above deals with achieving a balance between fulfilling each customer’s desired channel preferences versus achieving the organization’s desire to secure the lowest cost-to-serve channel option for each customer. Organizations will have to take the necessary steps to learn which channel(s) their customers prefer to use to engage with the organization (e.g., email, face-to-face meetings, telephone calls with Contact Center personnel, direct mail, dialogue on public or private Social Media channels, in-store face-to-face discussions, mobile apps, and your Website/eCommerce portal)?  To secure this information, organizations need to perform analysis of their customers’ channel preferences today as determined by their current purchase behavior with the organization

Regarding cost-to-serve, organizations need to ask these two questions: Does the organization know how much it costs to serve each customer via their preferred channel(s)?  And is the organization making or losing money serving their customers via their preferred channel(s)?  Determining cost-to-serve requires careful analysis of all relevant channel financials for existing and planned channels.  While this can be a challenging exercise since many organizations do not track their metrics, channel optimization cannot be achieved without this input.

There are two parts to channel optimization. The first concerns achieving a balance between fulfilling customer preferences and lowering the cost to serve each customer. This entails knowing what your customers prefer and obtaining pertinent cost-to-serve information.

Second, there are challenges beyond customer preferences and lowering costs. They include the reality of today’s and tomorrow’s customer including:

Multichannel Strategy: The need to accommodate a customer or prospect who begins the journey in one channel, travels to another to get answers not found on the previous one, and finally moves to a third to make a purchase.

Learning curve = lower costs? While certain channels may seem expensive to work in today, as customers continue to utilize them, the cost will likely decrease. As an example, think about the cost of starting up a social media community five years ago versus how much that cost would be today.

Moving customers to other channels: Whether person-to-person, online or as Smart Customer Service reports in a recent article, Live Chat Pops Up as a Preferred Customer Service Channel, age and trends will influence the use of new channels or a combination of old and new. In a recent research study, Software Advice, an IT consulting firm, reports the “younger the person was, the more likely they were to use live chat … 56 percent of 18-to-34-year-olds preferred live chat [to] using the phone, compared to 27 percent who were 35 and older.”

Consider the following:

  • Marketing specialists have theorized that it will take at least seven touches before the marketing message you are delivering will have any significant impact
  • In many industries, it currently takes “too long” for a “field” sales rep to respond to an inquiry from a prospect/lead received from marketing
  • By 2020, the “customer experience” will overtake price and product as the key brand differentiator
  • Organizations implementing digital transformation (CRM solutions) can drive up to 8% more operating income than peers that have not made this change

Here are some examples that demonstrate how an advanced CRM solution can provide better results due to marketing and communication integration within the system. These illustrate the improvements to your marketing and communications, and the corresponding positive affect upon the sales and customer service teams, that you can expect when you elect to implement an advanced CRM solution:

Example #1: Automated lead management and processing functionality. As organizations begin to rely on a multi-channel approach to their marketing and communication strategy, more emphasis is being placed on the digital portion to generate leads and relay communications to prospects/customers/clients.

  • Reduces response time to inquiries, as they can be processed from source (email response, website SEO or form response, etc.) and directed to a team member’s activities without human intervention and positioned as a part of the team embers “to-do” list.
  • Score the interest/receipt/response from your digital channels and funnel them through to the appropriate team member. Tracking and scoring website access, email response, social interaction (for consumer based organizations), then creating activities for the team member to focus on for the “best” results.
  • Provide all staff with access to marketing messaging directed toward a specific prospect/customer/client, allowing for swift, knowledgeable assessment of the call/inquiry

Example #2: Customers expect organization members to know what’s “going on” with their accounts

  • Establish a formal approach for various steps in the marketing, sales, support, and account relationship processes that is accessible to relevant team members, such that they are positioned to advance the customer/client relationship
  • Provide access to all team members, from marketing through service/support, on planned, active, or recently completed interactions, allowing answers, or follow up to be provided accurately and in real-time
  • Track all activities (marketing communications, calls, emails, meetings, etc.) in one location that appropriate resources can view

Example #3: Customers receive and respond to communications from multiple channels

  • Use tools to test messages, then use marketing automation to send out the “best response” messaging
  • Track responses for each lead to understand where/what messages connect with what type of prospect/customer role to drive additional traffic and constant improvement
  • Plan for marketing communication with existing customers to maintain “top of mind awareness” beyond field or inside sales contacts

Example #4: Use analytics to identify “where my desired fish are” for targeted marketing/messaging

  • Analyze existing customer information to build “profiles” for focused prospecting activities
  • Apply “profile” information against existing lead databases, or purchased lists, to identify new prospects or prospect locations near existing customers for targeted activities
  • Share information discovered with the sales team, enhancing their ability to visualize their opportunities, with both existing customers and new prospects; build programs for formal follow up and to track progress