The sustainability of a corporation consistently traces back to a single key factor: the customer. Recent studies show that 89% of customers leave an organization after just one bad experience1. To make matters worse, 40% of customers try to steer others away from a brand after a bad experience2. With the interconnectivity of social platforms, this domino effect can be seriously detrimental in terms of customer retention and acquisition. The evolution of social and mobile technologies is shaping the way consumers communicate about and essentially perceive different brands. As a result, customer experience management is increasingly becoming a top priority for chief executives across all industries.
Think back before the introduction of mobile technology. Purchase decisions were very black and white, with only a single point of interaction. With the evolution of new technologies, everything has changed. Customers are now able to use numerous different channels to gather information and to make purchases. To reflect this, the seller’s focus has also shifted from single channel to multichannel.
Yet, multichannel communication is no longer enough for today’s consumer, and an even newer trend is emerging. The omnichannel strategy is making its way onto the playing field, and for companies across the board, this means change.
Multichannel vs. Omnichannel: What’s the Difference?
With a multichannel approach, segmentation is based on the specific channels a customer typically uses in order to target him or her with a distinct promotion or message. In contrast, with an omnichannel strategy, customers feel as if all of the channels are one through seamless integration. As shown below, the customer journey is an endless cycle. Companies must interact with each customer differently and through different channels based on his or her preference for each specific phase of the customer lifecycle. From the customer’s perspective, it contains the right message and is the preferred channel of communication. From a company’s perspective, all messages are consistent across all channels for that specific customer. The focus is on the customer rather than the channel being used3.
The Power of Data
With the proliferation of mobility and cloud computing, customers now have the ability to have real-time information right at their fingertips. Customers have the power to gather everything from competitive pricings to alternative purchases, meaning their choices are virtually unlimited. An even bigger challenge is the rise in social media. Customers can influence hundreds of people with a single “tweet” or “post”. With all of this social and mobile data as well as increasing global competition, it is evident that consumers’ switching costs are continuing to spread thin.
On the other side, corporations have their own power in the form of data. Through the use of loyalty cards, in-store technologies and massive quantities of unstructured data, companies have the ability to gather a superfluous amount of information ranging from past purchases to the specific paths customers take walking down the aisles to consumers’ general interests. The evolution of “big data” for companies has evolved from manual research to advanced tools such as POP (point of purchase) and social analytics.
The question is: what should companies do with all this data?
Brand Equity: Differentiation through Added Value
Companies are now realizing the critical importance of acquiring and using all of this data to provide a fully integrated customer experience. By realizing and exceeding customers’ expectations at each touchpoint, companies are able to build their distinct brand identity and increase brand equity. They are able to attract and retain existing and new customers—the two most important factors for sustainability. This competitive advantage is critical in driving top-line revenue growth; in fact, research shows that 86 percent of customers are willing to pay more for a better experience4.
Despite this growing phenomenon, a mere 34% of companies use a consistent framework for measuring customer experience quality across channels4. Some fail to realize the impact, while others who do realize it are just unable to execute. What’s the key?
Look at Innovation from the “Outside-In”4: Recent strategies have focused on cutting costs using Six Sigma and Lean principles. Today, that’s not enough. Companies need to focus on customer-centric innovation in order to gain a competitive edge and realize growth. The best way to achieve this is through co-innovation—discovering unmet needs and transforming those needs into innovations. A shocking 96% of brands don’t ask their social customers to help with product innovation4. Rather than aligning customer strategies with internal processes, companies need to align their internal processes with the customer4.
Transform Internal Corporate Culture- A customer’s experience stems from both tangible and intangible factors. Unlike a physical product, face-to-face or even virtual interactions with a customer will always be different. Studies show that only 29% of companies share customer experience metrics and models with all employees4. The key to a successful customer experience is to focus on integration and a consistent brand image both externally and internally, with all stakeholders on the same page. By looking at a holistic view of operations and using opportunity gap analysis, a company can uncover hidden opportunities and points of difference at each customer touchpoint.
Integrate Cross-Channel Data Using a Single Platform- With a single enterprise platform, corporations have the ability to align people, processes, and technology in order to provide a consistent message to the consumer and maximize the impact of delivery. By having cross-channel data in one database,all stakeholders know the customer, know the message and can deliver throughout the customer lifecycle.
HCL is taking the leap and providing a salient solution to this omnichannel challenge and customer experience opportunity. With HCL’s Customer Experience Management (CEM) solution, corporations are able to take control of the entire customer experience process. Through seamless data integration, companies are able to reach consumers through the right channel with the right message at the right time. Success.
Join us to tackle the Customer Experience Challenge!
2Kelton Research (Lithium)
4Forrester Research, Inc.