The ‘multichannel challenge’ demands that businesses are as ruthless in their customer focus as they are obsessive about using information in a way that outsmarts the competition. Achieving this is a source of anxiety for executives in the UK and beyond as the sheer pace of innovation means that market leading positions can be blown out of the water at any time.
“If we think we’re at the end of the multichannel journey, then we’re very much mistaken as there is a lot more change to come and it is hugely challenging for commercial businesses to respond to it,” says David Wild, Non-executive Director at Premier Foods and the former Chief Executive of Halfords.
The notion of being customer centric is nothing new but the rules of engagement have changed dramatically. In a bid to get to grips with customers using online, traditional stores and phones, Bill Payne, Vice President of CRM and Industries for Global Process Services at IBM, advocates the creation of a new role: the Chief Customer Officer (CCO).
“It is time for a CCO to be the total advocate of everything that is customer centric and customer focused,” he argues. “What we’re beginning to see in the bigger American enterprises is that they are putting in a CCO with varying degrees of responsibility, but generally at board level, and that person is the customer advocate.”
Think of a Chief Marketing Officer with board-level clout and the ability to break down silos within a business in order to create a seamless, single view of the customer. “Very few companies have totally re-engineered their customer processes to become customer centric across all channels,” adds Bill.
Traditionally, the responsibility of making an organisation customer facing falls squarely on the shoulders of the chief executive officer. Moira Clark, Criticaleye Thought Leader and Professor of Strategic Marketing at Henley Business School, says: “In the UK, many companies are product or sales oriented; they are already siloed, which is why I wonder if a CCO would mean that other people wouldn’t focus on the customer. I think CCOs only work in organisations that are already customer centric.”
David Soskin, Chairman of the cost comparison site mySupermarket, also has his doubts about the impact of such a role. “Customer relationships should be driven by the CEO. I’m not quite sure what the CCO would be doing all day long. Customers make or break a business so it’s something that the CEO needs to be intimately involved with – it comes from the top and if there was a separate role it might encourage the CEO to leave it to someone else, and this is too important for that to happen,” he says.
What is clear is that a decision has to be made about who owns the customer experience within an organisation. The emergence of new channels and the passion with which social media has been embraced have shaken up how companies communicate and market to customers. Rather than B2B or B2C marketing, the focus now is on B2P – business to personal.
Dipak Jain, another Criticaleye Thought Leader and Dean of the INSEAD business school, comments: “The most important thing is that we need to redefine what it is that ‘customer’ means. It is no longer about ‘customer satisfaction’, but rather it is about ‘customer delight’. The time has come to evolve from marketing a product or service to marketing a total customer experience.”
It’s a shift in approach that can make or break the hegemony of big hitting brands. Stephen Dury, Director of Strategy & Marketing for Corporate Banking at Santander, comments: “You are either a business that is absolutely focused on building the right experiences, products, services and solutions for your customers or you are not. If you are, the board will be focused on making things work well for customers and providing what they need, as well as the middle management leadership teams, together with the teams that deal directly with customers on a day-to-day basis.”
This point is also put forward by Moira: “You’ve got to develop a customer-orientated culture and put the customer at the heart of the business. This entails having good and consistent customer insight over a long period of time, so that in effect customers actually become part of the organisation.”
In practice, this requires that businesses have a culture whereby customer feedback is seen as a gift as opposed to a problem to be solved. “You can’t massage the message anymore as the wisdom of the crowds will always will out,” says David Soskin.
The other part to this, and perhaps the hardest test for CEOs and senior executives, is the operational alignment that is underway in bringing together the various channels. Jim Waller, Group Commercial Director at Carphone Warehouse and formerly Commercial Director for Foods at Marks & Spencer, comments: “I see the challenge for many businesses being that online does one thing while retail does another, and never the twain shall meet. Suddenly you find different parts of the business pulling in different directions, in theory trying to achieve the same goal, but it patently just doesn’t happen.”
For Bill, this is a somewhat baffling approach to running a business. “Many companies set up their web presence to actively compete with their bricks and mortar. The smart businesses are the ones that are able to bring together their web presence, chat and social media and contact centres so that they treat you as a customer of one.”
In an ideal world, it doesn’t matter what the touchpoint is, the customer information a company has through any given channel, and the experience a customer has of that company, remains constant. If you’re not a pure-play operator, knowing where to invest in order to create this experience, and judging an appropriate return on investment, has to be one of the toughest decisions in business at present.
Tulsi Naidu, Operations Director in UK & Europe for Prudential, says: “For large organisations with existing modes of operation, it is about being very clear about where it is you can make the maximum impact and difference for the customer through creating multichannel interaction, then being laser-like in the execution.”
According to David Wild, there are “massive economic and technical challenges” in how data is used and products are presented. He says: “In many product categories, the goal is for the net, the store and telephony to be working in harmony. There is a long way to go to get there and, in some product categories, the pure-plays have such power and economic advantage that they will dominate at the expense of multichannel.”
Those who have culture right so that the focus is on customer relationships, and the most effective use of data, will be best placed to become market leaders. “There are lots of systems out there that help you to learn and understand what your customers are doing across different channels,” says Stephen. “How well that is implemented in an organisation is a unique competitive edge – technology is great, but if people don’t use it, it won’t have the impact that you expect.”
Whether a business is in retail, financial services or FMCG, there remains plenty of confusion and tension in boardrooms about multichannel strategies. In part, this is because there is no right answer as such because customers are using technology in ways that are faster and better than most companies can respond to.
That’s not going to stop any time soon. “The next decade will see the greatest transformation of the customer experience ever,” says Bill.
If you’re the CEO, it’s simply not an option to allow your business to fall behind.