By Phil Klaus
Over the next few weeks, I’ll be sharing insights from my research and consulting work in a series of posts, which will discuss critical aspects to delivering successful CX experience. You can read the first post, Demystifying The Black Box – How To Design, Manage, And Measure The Most Profitable Customer Experience (CX) Strategies, here. The series will conclude with a podcast with the Center for Services Leadership, where I will be answering questions from the CX community. I invite you to share your questions and comments through the blog or via Twitter (#CXquestion) and I’ll be happy to address them in the podcast. This is the second post in the CX series.
Social Media—a manager’s curse or blessing. To use the words of some of my clients, “As if managing offline channels wasn’t hard enough already?”
Managers worldwide, while almost evangelistically embracing the new multi-channel environment, are often left with very little guidance on: (a) how to take advantage of online channels, (b) how to develop a corresponding multichannel strategy, and (c) how to manage the multi-channel strategy in the best possible fashion. This, in turn, leads to frustration in the boardroom about both the benefits of online channels and the influence on the overall customer experience (Klaus, 2014a).
CEOs worldwide are questioning the push towards adding new online channels, and whether they are destined to be an expensive cost-of-doing-business to meet customers’ ever-rising expectations of service quality, with no incremental return (Klaus et al., 2014). The alternative may be a different impact upon business performance that might better assess, and, therefore, improve how positive outcomes are generated from multi-channel strategies (Maklan, Peppard and Klaus, forthcoming).
In our global research, which consists of multiple longitudinal studies dissecting multi-channel strategies and their performance, we explore a dynamic, competitive environment. We developed a typology that can be used to benchmark existing practices to the described state of management, including how different multi-channel practices are linked to performance. We found clear evidence that social media has an important role in successfully managing the multi-channel customer experience (Klaus, 2013). The most successful firms use social media for stakeholder communication, resource allocation, competitive environment tracking, and segmentation practice enhancement. Thus, social media delivers key insights for the internal and external perceptions of the entire multi-channel strategy, elevating it from being solely a channel of, to a key component of, the overall strategy.
Based on our results, we suggest that to develop and take advantage of opportunities, firms must:
- develop an online channel strategy focused on multiple channels,
- manage transformations of this strategy internally,
- upgrade their skill sets, and
- integrate new technologies such as mobile devices and social media, in order to
- improve the customer experience.
The development of a new multi-channel transformation plan requires a coherent buy-in from all functions inside the firm. Our findings submit that many firms are struggling to come to a consensus on how these changes will be formulated and implemented. The documented tensions between the different channels have to be overcome in order to succeed with a company-wide accepted vision, including the new marketing approach reflecting the new channel mix.
Once this is achieved, firms face the task of managing the transformation internally. We found support for the proposition that the introduction of an online channel program influences the constellation of the entire firm. Entire business models and constellations, such as financial services (see Klaus et al., 2013), hospitality, retail, need to be scrutinized and reconsidered to adapt to the new multi-channel environment (for more details see Klaus, 2014b; Klaus and Nguyen, 2013).
The main benefit and challenge of the new multi-channel environment is to create immediate access throughout all channels, to not only gain insight in the new customer-experience-driven behavior pattern, but to also deliver the corresponding experiences. We found clear evidence that once organizational barriers to use of digital tools fade, they form a foundation of entirely new business processes.
For example, a national real estate agency now uses a platform allowing them, while at location with a client to sign a binding contract, to initiate loan application/approval, fix an appointment with the notary, set-up telecommunication, electricity, gas, and water services ‘right on the spot.’ This unique, customer-experience-focused solution led to higher customer satisfaction, positive recommendations, an increase in return business. A management consultant firm used social media effectively as a platform to allow their employees to engage in, and freely exchange ‘best practice’ examples, leading to both, a more defined learning and experience exchange, and higher employee satisfaction. These processes, thus, in turn, improve performance significantly. Firms able to address and master the multi-channel challenges deliver better customer experiences, leading to superior financial performances. (Klaus, 2014b)
There is no doubt that the online channel is a crucial ingredient in firm strategies worldwide. Firms will use them to support a range of business processes to create stronger links to employees, suppliers, customers and vendors. A key challenge that remains is managing unavoidable multi-channel strategies in which all channels – face-to-face and online – must co-exist and deliver the best customer experience possible (Klaus and Maklan, 2013). Thus, all channels are truly equally important.
Dr Phil Klaus is Professor of Customer Experience and Marketing Strategy and holds multiple visiting professorships around the globe. His multiple award-winning research has appeared in a wide range of academic and managerial journals. Phil is a frequent keynote speaker at public and in-company seminars and conferences around the world. He has an active, international portfolio of Blue-Chip clients, for whom he advises on customer experience strategy and profit enhancement.
- Klaus, Ph. (2014a), Measuring Customer Experience – How to Develop and Execute the Most Profitable Customer Experience Strategies, Palgrave-Macmillan.
- Klaus, Ph. (2014b), “Towards Practical Relevance – Delivering Superior Firm Performance Through Digital Customer Experience Strategies,” Journal of Direct, Data, and Digital Marketing Practice, Vol. 15, No. 4, pp. 306-16.
- Klaus, Ph., Keiningham, T., Edvardsson, B., and Gruber, T. (2014), “Getting in with the “In” crowd: how to put marketing back on the CEO’s agenda,” Journal of Service Management, Vol. 25, No. 2, pp. 195-212.
- Klaus, Ph., Gorgoglione, M., Pannelio, U., Buonamassa, D. and Nguyen, B. (2013), “Are you providing the ‘right’ experiences? The case of Banca Popolare di Bari,” International Journal of Bank Marketing, Vol. 31, No. 7, pp. 506-28.
- Klaus, Ph. (2013), “New insights from practice – exploring online channel management strategies and the use of social media as a market research tool,” International Journal of Market Research, Vol. 55, No. 6, pp. 829-50.
- Klaus, Ph. and Maklan, S. (2013), “Towards a better measure of customer experience,” International Journal of Market Research, Vol. 55, No. 2, pp. 227-46.
- Klaus, Ph. and Ngyuen, B. (2013), “Exploring the role of the online customer experience in the firms multi-channel strategy – An empirical analysis of the retail banking services sector,” Journal of Strategic Marketing, Vol. 21, No. 5, pp. 429-42.
- Maklan, S., Peppard, J. and Klaus, Ph. (forthcoming), “Show Me the Money: Improving our Understanding of How Organizations Generate Return from Technology-Led-Marketing Change.” European Journal of Marketing.