The customer experience has shifted dramatically. Twenty years ago, customers interacted with brands through a small handful of channels: mass-market advertising like billboards or TV commercials, with employees in a physical store, and via a call center for service issues or catalog orders. Then digital communication technologies like the Internet, email, and social media upended that paradigm. Now consumers have dozens of possible channels for product research, purchases, and questions in what is a truly omnichannel environment seamlessly blending the digital and physical.
Brands need an omnichannel customer engagement strategy to keep up with the connected consumer, but often falter in deploying one that delivers long-lasting results. The problem stems partially from a lack of understanding the underlying changes necessary for delivering an omnichannel experience, kind of like trying to beat the New England Patriots without studying film of their games first. And brands also stumble by not fully comprehending what it means to be truly omnichannel in approach.
The Components of an Omnichannel Customer Engagement Strategy
Deploying an omnichannel customer engagement strategy requires rethinking business processes as well as technology infrastructure. The customer engagement technology stacks in most organizations developed organically over time, with new point solutions added as new touchpoints rose to prominence. Because of this, the average organization uses anywhere from six to 20 distinct point solutions on a regular basis.
For an omnichannel strategy to work, brands need to integrate the customer data gathered from their disconnected point solutions into a central location. This central portal can be a customer data platform or a similar solution, but it needs to be able to integrate structured, unstructured, and semi-structured data that is moving at batch and streaming cadences into a single view of each customer. This single customer view then needs to underpin any marketing campaigns, which will lead to more personalized and contextually relevant interactions.
Prior to deploying a centralized point of control for data and campaign orchestration though, brands need to change their internal culture. Business goals have historically been separated out by department rather than shared across functional lines. This means that teams within marketing, especially those dedicated to individual channels like email, social media, or the website, had no incentive to work together. Similarly, customer service had no incentive to work with marketing because they were judged only on direct interactions with consumers.
An effective omnichannel customer engagement strategy requires these internal barriers to be broken down and new metrics developed that incentivizes cooperation. Part of this is requiring information-sharing via a central portal of data control, but a rethinking of what kinds of metrics are important is also necessary. If there are no incentives for cooperation, then deploying a new technology is a moot point. Brands must develop and maintain cross-functional teams that eliminate operational silos and propagate the idea of the customer relationship as a singular entity that everyone has an impact on.
This is a far more profitable approach in the long run, as IDC recently found that omnichannel shoppers have a 30 percent higher lifetime value than those who shop using only one channel. More than that, companies with a strong omnichannel engagement strategy have an 89 percent customer retention rating versus 33 percent for companies with weak omnichannel customer engagement.
Unifying customer data across channels into a coherent omnichannel strategy allows brands to deliver the personalized interactions consumers expect. Through delivering individualized interactions across channels, brands can deliver on customer expectations and retain loyalty in the long term.
The “Personalization Pyramid” and Omnichannel Customer Engagement
Personalizing customer interactions in an omnichannel customer engagement strategy is not without its pitfalls. Concerns around consumer privacy and data security have complicated the goal of delivering personalized customer experiences. In Europe, for example, the upcoming General Data Privacy Regulation (GDPR) adds new strictures on how brands can use customer data and what sort of capabilities they require. Among the most prominent is the “right to be forgotten” that forces brands to delete customer data on request.
Most brands aren’t ready. Forrester Research recently predicted that 80 percent of firms affected by GDPR will not be in compliance before the regulation comes into force in May 2018. This creates issues with personalization strategies, especially as more consumers will likely take advantage of the capabilities the GDPR provides around choosing how their data is used.
Data security is similarly a major concern. In the wake of high-profile data breaches at major consumer brands, organizations need to ensure that their customer data is protected. This complicates unifying information across organizational silos, and yet that data integration can still be accomplished, and data kept secure. The issue is that organizations need to ensure data security while also making data accessible to stakeholders when they need it.
These three competing trends – consumer privacy, data security, and personalized engagement – are the primary issues facing brands who try to deliver an omnichannel customer experience. This “personalization pyramid” means that brands need to address all three areas if they want to be successful. Successfully doing so means that brands will be able to deploy an effective omnichannel strategy that engages consumers and maintains long-term competitiveness.
An Omnichannel Customer Engagement Strategy Is the Future
The age when consumers engaged with brands through a small number of channels is over. According to The Northridge Group, 55 percent of U.S. adults use two or more communications channels to contact a company or brand before an issue is resolved. That percentage will only increase over time as more channels of engagement arise.
Brands need to be present in multiple channels to drive engaging customer experiences, but that isn’t enough anymore. The modern, successful brand needs to adopt an omnichannel customer engagement strategy that allows them to understand customers across channels and deliver relevant messages to where the customer is – not where the brand wants them to be. Brands that lack an omnichannel approach to engagement will lose out to the brands that adopt this strategy, especially as consumer demands increase for a personalized experience.
An omnichannel customer engagement strategy is crucial in a marketplace where consumers increasingly drive the conversation. Brands that can engage where the consumer wants to, with the right message, stand to win against those that can’t. The ability to provide a consistent experience across channels and devices, informed by interaction and preference data, is thus critical to retaining customers in the new highly connected marketplace.