Companies and government agencies are becoming increasingly more interested in implementing channel shift strategies to reduce cost. Channel shift is the process of changing the methods of customer interaction from one form to another, particularly face to face and phone contact to online self-service support. Shifting from one channel to another doesn’t only add value to a business, but it also increases efficiency and customer satisfaction.
Another customer-centric benefit of the channel shift process is building better brand engagement, relationship, and loyalty. It allows the integration of resources for faster development of new services and easy expansion into the global market at lesser cost. Staff wise, it lets them focus on the things that are more important and on customers that are of higher value.
Adopting a channel shift strategy is quickly becoming a significantly viable direction for the coming years. Even most local government agencies think it is key for long-term growth and sustainability. However, some companies still encounter hurdles if not failures when implementing channel shift. It needs to undergo multiple assessments of the existing situation and company standing.
Most importantly, the needs of the customers and users of the platform have to be considered. To understand how customers think and how they would react to the change, customer personas need to be created. It involves undertaking certain processes, such as data gathering, workshops, templates and procedure creation, and communication. This means collecting demographic information for different customer types and analysing their preferences. Workshop sessions will aid organizations in detailed persona creation and discussion.
To delve deeper into what customers really want, some form of exchange or interaction needs to be undertaken. As much as possible, involve them in the process. It can either be through A/B testing the platform and/or getting insights from users via social media.
The next step in channel shift effectiveness is to create a user experience that is better than traditional channels. After identifying different customer types and needs, it has to be ensured that this is translated into the new web channel. User needs and experience shouldn’t be taken lightly because it can greatly affect sales, revenue, customer retention and willingness to shift channels. There is more to just uploading existing transactions and support services online. A business website should fulfil the psychological and emotional needs of users.
To implement channel shift in an organisation, those who are assigned to spearhead this task often have many factors to consider within the organisation itself:
- One of these is the lack of engagement from higher management and leaders. For an initiative to push through, the senior executives also need to be sold with the idea.
- Second is to have insight on how customers interact with a company through existing channels. Knowing this can lead to forecast how customers will react to future changes. This will also show the figures on the actual spending for existing channels and the projected savings when channel shift comes in.
- Third is to develop the strategy to deliver information and services to customers using the web channel.
- Fourth is to improve existing web channels if there are any, or improve traditional channels should some of them need to be retained.
- Fifth is to improve the existing customer sales and support process to side with the changes that go hand in hand with the channel shift strategy.
Taking these factors into consideration will increase a company’s chance of channel shift success. But what will happen should they still fail? A channel shift project that results in failure isn’t without risk of returning with very serious problems. It may severely affect the company performance, not to mention the funding released to put together the shift process can be entirely lost. Customers are likely to go back to face-to-face or over-the-phone contact, or potentially even shift to other providers.
Avon, a large global beauty company, has lost 125 million dollars for a failed software system project that had been undergoing for around four years. Why has it happened? It turned out that the application was declared unusable because sales from the company representatives did not improve and in some cases declined. The intent was for customers to be able to order products from an app, yet it resulted in a drop in representatives, more commonly known as the “Avon Lady”.
Other studies have shown that significant loss can occur through bad UX design. This is often due to a very small mistake being overlooked, for example one company missed out a simple yet crucial step at the checkout process on their eCommerce site and found themselves with rather drastic consequences. Once a customer shops online and fills their cart, they will click “checkout”. After this, the customer is required to login or register before purchase can be processed. This register process was meant to record customer data so they won’t have to add it again on the next purchase. They assumed that customers would remember account details when they come back, an assumption which later proved to indeed be a costly mistake.
The additional process of registering turned off some buyers, leading them to decide not to finish the buying process. Also, previous users had difficulty logging in because they forgot their usernames and passwords. In fact, almost half of the total users had multiple accounts. The small percentage of prospects who chose not to complete their purchase resulted in a big dip in profit for the company. The company redesigned the site and replaced the “register” with a “continue” button, and added a note that registration is not required but it can be useful when you return. The result of the change was a 45% increase in sales, equivalent to $300 million in the first year.
Despite the risks involved, channel shift is highly achievable. The key thing to remember is to test the process, the design, and most importantly to check in with the needs of the customers to avoid mistakes as early as possible. Should problems arise, they can always be fixed with process changes, again in conjunction with the response and feedback from users. Done well, the rewards to be achieved are particularly tasty for a company when they decide to make a channel shift.