Key Channel Optimization Challenges
By Barton Goldenberg
Any organization wishing to be around in 10 years will have to execute a sound channel optimization strategy. That strategy must answer at least these two questions: (1) Is the organization optimizing channel partner integration, the channels that their customers use, or both? and (2) How is the organization accommodating multi-channel optimization? Concerning formulating a response to these two questions, organization management must also determine a response to these key channel optimization challenges:
- New and more channels, each with its own cost structure
How will distribution channels change in the future? Will the Social Media channel become increasingly important? How will an organization’s Contact Centers be impacted by new Web-based services? What will be the cost to support additional channels, and will the return on investment justify these costs?
- Changing customer channel preferences
Look at what happened to music stores, to travel agencies, and to book stores. Once customers change their preference to an alternative channel from the one they customarily use, how will that impact the organization’s channel optimization strategy?
- The need for seamless integration across multi-channels
Today’s customers increasingly expect an organization to work with the customer in a multi-channel environment. In other words, the onus is on the organization to carry relevant information from one channel to the next as the customer utilizes multiple channels. Integration across multi-channels is expensive and technologically challenging, and needs to be carefully thought out by the organization and its participating distribution channel partners.
- Performing ongoing data analytics regarding channel optimization
To achieve channel optimization, it is important that organizations leverage the latest data analytics tools to monitor customer channel preferences, channel usage by segment as well as the cost to serve within each channel.
- Getting the “preference versus cost” balance right
How to rectify the situation where a low-profit customer prefers to use the highest cost-to-serve channel? Getting this balance right is not always easy.
- Securing customer adoption of lowest cost-to-serve channels
I have been working with global, best-in-class organizations on channel optimization strategy for three decades. I will never forget the time that we agreed on the go-to-market channel optimization strategy for a global footwear and apparel company, but failed to appreciate how difficult it would be to entice customers to move to the lowest cost-to-serve channels.
- Achieving technology integration across channels
Even when customers or distribution channel partners agree to use a common process, it can be challenging to say the least to technically integrate systems to support the agreed-on common process.
Channel optimization impacts the very core of Social CRM, namely “Which channels will the organization engage in with its customers and partners?” If the organization does not agree on a sound channel optimization strategy, even the best Social CRM system will be unable to rectify this deficiency. But if the organization does agree on a sound channel optimization strategy, they then need to integrate the output of this strategy into their Social CRM system.
Given the tremendous growth of the Social Media channel, and its role in generating social insight used by the Social CRM system, it is also imperative that the Social Media channel be tightly integrated into the organization’s channel optimization strategy.
In our next blog post, we will have guest blog piece by Nick Rojas (Twitter Handle: @NickARojas) concerning Best Practices for Franchises on Social Media.
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Barton Goldenberg, is the founder and president of ISM Inc., customer-centric strategists/implementers serving best-in-class organizations globally. As a CRM leader for 30 years, he was among the first three inductees in the CRM Hall of Fame. Recognized as a leading “customer-focused” author, his latest book, The Definitive Guide to Social CRM, is hailed as the roadmap for Social CRM success. Barton is a popular speaker on “maximizing customer relationships to gain market insights, customers and profits”. He is a long-term columnist for CRM Magazine and speaker for CRMevolution and frequently quoted in the media.