Myth: Adding More Sales and Service Channels is an Effective Multi-Channel Strategy
The hype around “Omni channel” and “Multi-channel” has become so intense you’d think it was a recipe for instant business success. In some companies it seems like a belated response to the fact that their legacy channels (e.g. bricks and mortar stores) have become a mill stone around the share price in the face of an assault by nimble new entrants with business models built on lower cost and newer channels. However, we have started to notice a clear distinction in this space. Some companies have merely added some channels and now call themselves Omni channel even though the channels are still distinct. A few companies have a truly joined up sales and service capability that integrates channels well for their customers and their business and these are the organisations that seem to be winning.
So let’s look further at this distinction between ‘having lots of channel islands (pun intended!)’ and ‘having joined up channels’. What we have noticed in the first scenario is that each channel has been developed in isolation or at a distinct point in time. Often in these organisations, each delivery channel e.g. branch, call centre, website, social media site has a different owner in the business or sits in a different department. So the structures that support and manage these channels are often separate and that needs to change if they are to be joined up.
The islands of separation can extend to processes and products. The processes in channel island examples have grown up historically and can be quite different. We’ve seen a company recently add new web and third party sales channels only to create chaos and re-work in downstream processes. Even products can vary by channel and we’ve seen telco and utility examples where front line staff say, “no I can’t offer you that, it’s a web only deal”. In these examples there can be channel conflict, layers of added cost and very inconsistent and disjointed experiences for customers. When we have observed the staff in these ‘islands of channels’ examples, they have almost no knowledge of the other
channels. We worked in an Insurance business where the staff members were hostile to other channels because they were fearful of them. Often we see that staff incentives encourage this island behaviour.
When we look at organisations that have joined things up, we note that they have been designed (or sometimes redesigned) that way. In the work we do to redesign manned channels (e.g. retail networks) to support multi-channel delivery, we have found that it’s a different way of thinking and has greater complexity. You have to ask additional joined up questions like “In which channels will customers want to perform this process?” and “how do we link processes across channels?” People, process, technology, organisation structures and measurement all need to be re-thought and they need to be re-thought together. Clearly this is harder than mono channel design but designing in this joined up way is the glue that brings mono channel islands together.
Of course technology has a role to play in joining things up but it's only part of the solution. We’ve seen lots of money invested in CRM and 360 degree I.T. solutions but without a matching investment in rethinking roles and processes these initiatives have under delivered. In one bank the technology investment had laid the foundation for multi-channel effectiveness but the people still didn’t operate that way so no bene ts owed. It’s a very different job being a retail sales person to being a multi-channel support person. For example, it’s a different conversation to say, “I can do that for you now” versus “Let me show you how to do that now”. The measures and rewards have to be different to drive these new behaviours so we nd we have to join up the people as well as processes and data.
So in conclusion we think the strategic trend towards multi-channel is essential. However, the winners will be not those who add channels or add them quickly, but those who succeed most in joining them together. If these problems are familiar we’d be delighted to discuss them in more detail.