Positioning – Focusing – Orchestrating: How to fulfil customer needs in digital channels?
As exemplified in our last article regarding customer engagement, we can summarize that the customer journey is a very complex and vast discipline. It is impossible to design engagement mechanisms and journeys that fit into the needs of each individual. Switching channels within one purchasing activity and differentiated behavioural patterns make it difficult for today's marketers to create unified, consistent, and long-term journeys for experience personalization.
The fundamental question is: Do we know what happens with the customers during and after the purchase? Is it an adventurous hike, confusing odyssey or comfortable walk? Customers do not differentiate between internal processes, departments or product areas but rather follow their tasks, motivations, and expectations to reach a certain goal. Therefore, it is important to apply a company-wide customer interaction approach for providing an excellent shopping experience and guide the customer through specific steps within dedicated journeys, instead of focusing only on product and market differentiation.
Those companies that no longer have a silo-based mindset in channels but instead focus entirely on the interaction of their services and customer through the integration of data, technology, content and communication, can create a high level of individualization and a unique customer perception along all available touchpoints with the customer – from the initial search, through presales, purchase, and unified post-sales support through self-service platforms.
To build a sustainable customer communication strategy between the brand and the customer, the following criteria should be met, whenever contact is made through any channel:
Unified experience: A consistent design across all relevant channels and touchpoints simplifies the journey and navigation regardless of whether the customer prefers to enter the customer service through a web app or mobile app.
No journey breaks: Anyone who encounters technical hurdles or too complicated paths in the communication process is sure to quickly knock on the competitor’s door. A consistent and wisely designed customer journey is essential to prevent customers from churn.
Continuity: A continuity-based communication approach is an important basis for a targeted and sustainable customer loyalty approach, connecting individual moments into one big picture providing insights about customer's preferences and communication behaviours.
Simultaneousness: The integration of all communication channels within a uniform platform, giving the customer the full flexibility as to which channel they use to fulfil their needs.
Let's imagine that your business goal is to increase sales in digital channels and increase cross-channel engagement to build long-term customer relationships. It requires not only providing a great customer experience, perfectly designed interfaces, but also engaging and persuading customers to start using your digital solutions across valuable channels.
The first step is to change your function-based mindset towards a journey-based one and to have a look beyond the data of anonymous and identified users to see the big picture, the consumers behind the data, and understand them better. But not only as who they are, but what they actually do through their behaviour, unifying scattered data across cloud and domain systems, matching customer’s identity, and events which allow you to identify certain patterns of behaviour to define dynamic consumer segments over time.
Data collection & synchronization
When it comes to data collection and synchronization, the question might raise how much backend systems must be changed. The answer may be surprising – not much. No huge transformation project must be initiated because there are already proven SaaS tools that can easily integrate with your CRM or marketing analytic tools via API to trigger in- and outbound interactions. An analysis of all relevant customer-related data across all valuable channels is a key aspect to connect the dots to better understand your customer's journeys and predict their intent, which allows you to adjust activities to make them and your brand a whole lot satisfied. Another important aspect in the analysis of conversion paths is the topic of cross-device. Cross-device stands for the simultaneous use of different electronic devices.
Nowadays, many consumers use several devices at the same time, which has gained enormous importance, especially in recent years. Contrary to popular belief, a platform solution does not automatically allow you to achieve your business goals. These kinds of solutions provide a more or less configurable platform to achieve these goals potentially. This means that implementing the solution is only the first step of the journey to meet one of the greatest challenges, which is not only to identify your customer across channels (e.g. in-store, eCommerce) but to drive them from offline to online or from one digital channel to another one (e.g. from eCommerce to self-service).
Listen to your customers and understand them
Once you have initiated the customer-related data synchronization process across your organizational ecosystem, have a break, listen and discover because the customer will tell you their journeys. Listening to and your customers understanding them is no one-time activity and should be a part of business as usual. Customer's needs, behaviours and habits change over time and to keep your business running, you should be up to date with all information. The best way is to collect and automatically analyse the data in real time, which enables you to react instantly depending on a specific situation.
On the other hand, it gives you the opportunity to effortlessly identify trends of customer expectations in a longer distance. Having access to insights, you can look at your customers' segmentation with a fresh eye. You do not have to revolutionize its structure at first. But it is worth considering if some adjustments are needed. Moreover, you should gradually start thinking about segmentation in a different, more fluent and innovative way. New insights and their higher granularity will probably evoke segments evolution and multiplication. For example, if you have defined a customer segment as "young adults" it will shortly occur that with data you have, you can start to extract subsegments like "young adults, who are Apple products fans" or "young adults interested in sustainable lifestyle" and many more. In the final stage, segmentation might not be as necessary at all. Because you will operate only on customer journeys across different channels and behaviours updated in real time.
Automate conversion paths
The automation of quick win conversion paths is an essential step to reach an acceptable level of customer response, especially during repeatable customer activities. One huge business challenge in digital transformation is to standardize and automate repeatable conversion paths that cause unnecessary costs and lost revenue. Therefore, automation regulates the segmentation, generation, addressing, and further nurturing of your leads. It also helps you to create, manage, and evaluate campaigns holistically via your customer engagement platform, creating revenue and providing a fast return of investment - "Quick Wins". The abandoned cart scenario is a great example because it represents a huge gap in potential conversions. For example, a 65 % abandonment rate was found to leave a 97.9 % gap in conversions.
So, how does it work to design an automated customer journey? First of all, think about what journey you want your potential customer to take in a particular campaign. Setting up a process chain enables you to automatically trigger a different kind of campaigns reminding customers about their shopping cart providing further product recommendations. Customer engagement platforms support you with useful insights about preferred touchpoints and the best time communication. Further quick wins are abandoned form, missing subscription, second buy recommendations, etc.
Scale based on attribution models
Empowered with the knowledge about customers provided in real time, continue to upscale based on evolved attribution models, which will engage your customers and identify new revenue streams in your digital channels. Moreover, thanks to AI-driven recommendation engines, some part of the work can be done for you by algorithms presenting customers a personalized list of products and services, they might be interested in. The next best offer (NBO) and next best action (NBA) should be set in context. Our understanding of a perfect next best offer (NBO) is when the customer receives an offer, which is most suitable for them. It should be constructed around the portfolio of products and services the customer already has, a segment they are in, and all other data which has been collected about them. The simplest example of NBO is proposing complementary products or value-added services like extra insurance for a new, expensive mobile phone the customer has bought recently. The next best action (NBA) should be based mostly on the same principles. However, its main purpose is to help and guide the customer to perform (or accept) an action, which would help them to meet their goals, reduce costs or improve the quality of life.
Customer does not think in channels but expects to interact with the company how, when and where they want to assume the company to be active at touchpoints the customer has chosen. Multiple channels and touchpoints are used for the non-linear decision-making process, and on the other hand, this information gathering is of indefinite duration. From the company's perspective, the question may arise of how sales and customer interaction can be managed in a value-oriented approach. Often, companies try to illustrate the decision-making process based on the high simplified AIDA model which separates it into four stages – attention, interest, desire and action. But only in the rarest cases, a customer will go through all of these cognitive decision-making phases in one uninterrupted time interval and through one channel or touchpoint. This means, that customers can become aware of a product through an offline channel (e.g. POS), look for further information online, narrow down possible providers via comparison portals and then purchase via a call centre. Therefore, it is quite challenging to identify the role of each channel within the decision-making process.
So, how to identify the most valuable journeys and guide your customers through them? Due to this challenge and the influence of new technical possibilities, the so-called attribution models have been developed to evaluate the importance of all touchpoints within the customer’s journey. These attribution models are defined as "the science of using advanced analytics to allocate credit for desired customer action to each marketing touchpoint across all online and offline channels" (Kannan et al. 2016, p. 450). There are two common and proven approaches of attribution models, first-click-attribution (FCA) and last-click-attribution (LCA). According to these two approaches, a customer's transaction is assigned either to the first touchpoint of their journey (FCA) or the last channel through which the purchase was finally made (LCA). For example, discontinuing a subscription campaign in offline POS to achieve a higher second-buy rate, could also lead to a decrease in the number of purchases achieved through e-commerce or call centre, as the offline channel is also included in this specific customer journey. Attribution models give you the ability to assess the role of each channel in the customer's journey in a more realistic approach. Therefore, activities for increasing engagement and redirecting customers from a costly channel to a more valuable one can be adjusted based on realistically reflected customer data. To get this ability, two general issues need to be answered in a long term (Anderl et al. 2016, p. 458):
Measure the value and performance of dedicated digital and non-digital channels
Estimate the performance of a dedicated digital or non-digital channel affecting the performance of another one.
Contrary to a popular belief, a platform solution does not automatically allow you to achieve your business goals. These kinds of solutions provide a more or less configurable platform to achieve these goals potentially. This means that implementing the solution is only the first step of the journey to meet one of the greatest challenges, which is not only to identify your customer across channels (e.g. in-store, eCommerce) but to drive them from offline to online or from one digital channel to another one (e.g. from eCommerce to self-service).
The implementation of a journey-based engagement strategy usually seems very complicated and lengthy. Our experience shows that it should not be underestimated because you end up in an endless loop of data and attribution models quite quickly and you do not know where to go with it. Therefore, it is quite essential to build a strong set of customer-related data and analytical models to automate repeatable journeys for a quick ROI. After a strong fundament is built, the possibilities for scaling are infinite. Means to evolve attribution models to adjust campaigns and activities based on customer’s behaviour, product, and communication preferences. For companies, this results in a strong customer value-oriented approach, which can offer an advantage, especially in highly competitive markets.