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Why the Right Channel Always Beats Omnichannel (Part 1)


Determining the right retail channel is more important than embracing buzzwords. Here’s why preferred customer channels, viewed in the context of customer value, rule.

The ways in which companies field, handle, and resolve customer requests are as varied as they are different. Whereas a phone call or store visit historically sufficed, today’s customers are increasingly turning to social media and smartphone apps—in addition to already established use of webchat and email—to get live if not instant help.

In light of this, retailers have increasingly adopted to engage customers at the touchpoint in which they’re most comfortable. Unfortunately, many companies believe that adding more customer channels or reducing the time it takes to handle customer queries will boost customer satisfaction and enhance the overall experience. But more (or hurried interactions) isn’t always better, especially when it comes to serving customer needs.

To avoid this, retailers must broaden their view of omnichannels and focus more on steering customers to the channels that best suit their preference for engaging, communicating, and ensuring loyalty.

Figure 1

The Challenge of Omnichannel

Traditional contact centers are quickly evolving into interactive, digitally-driven engagement hubs that allow companies and customers to connect and communicate quickly across mobile devices, social media, webchat, e-mail, and even video apps. As these touchpoints proliferate, retailers must rethink and prioritize how to best serve their customers in today’s dynamic digital world while closely monitoring costs.

While increasing customer contact channels may be perceived as better, there is little evidence to support this. In fact, the proliferation of digital technologies and touchpoints have complicated the number of channels needed to track customer preferences and purchasing traits. 

To further complicate matters, consumers are more informed than ever, which can lead to confusion during live interactions. For example, a full 58% of customers visit the web before speaking to a company representative, according to a recent Genesys survey. Another 34% of callers stay on the web while talking to an agent.

Statistics like this suggest that traditional service channels are often used only after customers have exhausted other self-service avenues. According to a 2015 report from Dimension Data, this is especially true among millennials. Furthermore, the research suggests that this percentage will only increase. 

This is hardly surprising, given millennials’ (and those with millennial mindsets’) preferences and level of proficiency in utilizing digital channels. Considering the accessibility, amount, and penetration of information available on social media, it’s clear why businesses in virtually every industry are becoming less dependent on traditional customer contact centers.

Consequently, the vast majority of business leaders are working to incorporate new digital tools into their operations to not only satisfy customers, but to keep competitors at bay and grow revenues, according to a recent report by Forbes.

While these initiatives vary in size and intent, they generally involve substantial investments in big data analytics, cloud computing, artificial intelligence, mobile, and other automated technologies (such as augmented reality and Internet of Things deployments). This trend points to a misjudgment of overall channel requirements and the lack of a sound channel strategy, which can undermine top-line results. After all, research has shown that customer experiences and costs are not mutually exclusive, largely due to the hidden expenditures associated with customer service.

What is particularly interesting is the correlation between what organizations spend on services and the level of satisfaction among their customers. While there appears to be a proportional or linear relationship between the two, the facts are more complex. Initial investments may indeed result in a better customer experience, but they are achieved in a nonlinear way in our experience.

Simply stated, happy customers and equity growth are not enough to accurately assess the over- all relationship. While an omnichannel environment can increase returns and improve the customer experience, it takes more than technology investments to build and nurture successful, contextual, and mutually beneficial relationships with customers. With this in mind, enterprise contact centers must reexamine their spend strategy and decide how and where to allocate the right resources: people, processes, and technologies alike.

Looking Forward

To better understand and prioritize this brave new world of multichannel availability, organizations must rethink customer service and double-down efforts to identify customer behaviors, needs, and preferences. Yet focusing on these factors alone is only part of the equation. Companies must incorporate this information into an all-inclusive, multichannel strategy that addresses customers’ requirements at every encounter.

In this way, retailers can:

  • Deliver a consistent level of service across channels (quality and speed).

  • Offer highly personalized, distinctive discussions that align with customer’ profiles (low contact, high contact, etc.).

  • Know how, when, and where customers prefer to engage.

In our view, the lack of a “right channel” strategy can result in low-value customers being served through high-cost channels (i.e., serving these customers ends up costing more than the revenue they generate). Likewise, steering high-value customers to lower-cost, less personalized channels ultimately leads to greater abandonment. 

In part two of this special report, we’ll explain how to evaluate your existing channels from the outside in, prioritize your contact points, and develop a strategy for rationalizing, migrating, and adopting new digital channels as they become available.

To learn more, please read “Beyond Omnichannel: Determining the Right Channel Mix,” or visit the Retail section of our website.

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Why the Right Channel Always Beats Omnichannel (Part 1)