This article is based on an executive roundtable hosted by 7I’s and Oracle. The session addressed the business potential and the opportunities the omnichannel world holds.
The discussion centered on four main questions:
1. What is the level of customer demand for services in digital channels
2. What is the level of readiness in organizations, and what motivates them, to provide services in digital channels
3. What can be learned from organizations’ experience about how to launch digital channels
4. Does experience show that it pays off – and for whom?
What follows is a review of the main insights:
Digital channels are seeping into our lives, both as customers and as providers. Sometimes by design, sometimes evolutionarily, driven by demand and benefit.
Multiple Channels Versus an Omnichannel Strategy
More and more customers expect a choice that includes digital service, with an emphasis on consuming service through direct channels (SMS, WhatsApp, email) and less through the organizations’ own dedicated platforms (personal account areas, apps). In a survey run during the session, 67% of respondents said that at least 85% of their customers are digital users.
Participants noted a steady rise in the number of users on digital channels. At Mizrahi Tefahot (a large Israeli bank), for example, which offers customers full service by email from their personal banker, about 30% of inquiries come through channels that are neither branch nor telephone. Other organizations reported reaching as much as 20% of transactions performed in self-service channels.
The evolution began with self-service platforms, seen as both economical for the organization and accessible for the customer. In a survey of the companies attending the session, 36% of respondents said their organization has only a self-service platform and does not yet offer interactive service on digital channels.
44% said service is available on a range of topics by email or chat as well, and only 20% said all services are available on all channels. The discussion produced full agreement that the subject demands a holistic view and a planned overall strategy.
That said, not every organization is mature or ready enough to deliver services on digital channels, and some have no formal strategy on the matter at all. Organizations tend to launch services piecemeal: 48% of respondents said their organization has no overall strategy and launches channels and services from time to time as management decides.
Launching Digital Channels Requires Organizational Preparation
Participants stressed, and Ms. Kochavit Arnon, VP Service at Harel (an Israeli insurer), in particular, that when launching digital channels you must first make sure the work processes underlying the service are in order. Processes that are inefficient or disorganized are exposed all the more sharply when the service runs on a digital channel.
Email or chat service creates a high customer expectation of efficient, one-and-done resolution. Customers do not take kindly to being redirected to another channel after writing in, told to send us a letter, send a fax or go to a branch.
The recommended method for building a strategy, as presented by 7I’s, is to examine the full set of services against the various channels, and the benefit each service-channel pairing delivers to the channel and to the customer.
The Challenge of Balancing and Deliberately Shifting Inquiries Between Channels
Participants noted that once customers were given the option of digital channels, they saw inquiry volumes rise in the short term, although after a while volumes settled back to normal levels. Where self-service channels were launched, participants reported a decline over time in calls to the contact centers. Even where overall service usage grew, a significant share of it shifted to self-service channels.
Shifting inquiries to digital channels is a challenge, and organizations approach it in different ways. 30% said they differentiate service levels between channels, 27% said they make certain services available only on digital channels, and 11% said they incentivize customers to use these channels with discounts. One question raised, for example, was how to make digital channels accessible to the ultra-Orthodox community. Members shared a range of solutions.
First, the ultra-Orthodox sector has many shades, and some populations have unrestricted access to smartphones, so apps are accessible to them. Solutions such as kosher websites and accessible information kiosks were also mentioned.
Participants shared an interesting insight with their peers: one of the main keys to adopting digital channels lies in the cooperation of the front-line agents in branches and contact centers.
Agents, it was said, initially see digital channels as a threat, an alternative to the service they themselves provide, and their instinct is to keep serving as they always have. In the agent’s view, “the customer came all the way to me, why would I send them off to an app..”. There are ways to bring agents on board.
First, Galit Maskelson, Head of Products and Customer Experience at Partner (an Israeli telecom), said that in their experience agents need to know every alternative and how it works. Agents should be trained on what the website and the app can do.
In addition, the experience at Isracard (an Israeli credit card issuer), for example, shows that you must make sure the agent is not financially penalized by the shift. Rewarding agents for shifting customers to digital, or crediting them with commission for actions their customers complete, such as settling a debt through an unstaffed channel, contributes significantly to the shift over the longer term.
Launching New Channels Calls for Internal Preparation
As noted, the session stressed that as part of preparing to launch digital communication, the organization must validate its work processes and adapt them to the platform and to shifting customer expectations. It was also noted that the methods for measuring and controlling service levels, effectiveness and efficiency differ from the telephone and face-to-face worlds we know, and need to be adapted.
Measuring the new world with old tools is misleading, and sometimes steers the service in the wrong direction.
The agent profile changes too: written channels demand stronger expression and writing skills than telephone work does. Participants shared from their own experience that when the new channels were launched they generally picked experienced agents from the more traditional channels who write well. Over time, more and more response templates were developed, which served as tools and set a standard for written replies.
So Why Digital Channels at All, and Who in the Organization Cares?
Oren Cohen-Butensky, VP Service and Sales at Isracard, put it schematically: in any organization the trigger for launching digital channels will be efficiency improvement if you ask the CEO, innovation and positioning if you ask the marketing VP, and better service levels and customer experience if you ask the service VP.
The survey results say the same, since most of those in the room were service managers. 58% said the main driver for launching digital channels in their organization is service improvement. 23% of respondents named perception and positioning as the main driver for launching channels, and only 19% named operating costs.
At Mizrahi Tefahot, said Uri Yunisi, head of the bank’s direct banking sector, accessibility sits at the heart of the bank’s strategy: “we want customers to be able to reach their personal banker at any time, through whichever channel is convenient for them.” And indeed the bank’s customers have many access channels open to them, including email and SMS direct to the banker.
Odeya Kalfon, formerly VP Service at David Shield (an Israeli international health insurer), said that communicating with customers by email and chat was a necessity for the company, given how internationally dispersed its customers are. As a result, digital accessibility became a central factor in differentiating how the company’s service level is perceived against competitors, and it showed up in the NPS (Net Promoter Score) measure they use, which captures the share of customers who would recommend the product or company to a friend.
Even so, the debate over the return on the investment in building the channels is live in most organizations. 63% of respondents believed that investment in omnichannel service will pay for itself within a reasonable time, since digital channels are cheaper to operate and inquiries can be expected to shift.
The prevailing view among managers who have rolled out digital channels is that overall demand for service grows in the short term, and some argue for well over a year, but that beyond that period there are clear efficiency gains, driven by the shift of inquiries to self-service and by the efficiency of the digital channel itself.
On sales and effectiveness, a global benchmark we ran recently shows that proactive chat intervention while a customer is browsing the site contributes significantly to conversion and sales rates among existing customers, and also raises the share of transactions completed in self-service.
So Who Drives This Inside the Organization?
We were surprised to find that although service managers generally believe that building a strategic plan for digital channels, and integrating those channels into the company’s service operation, delivers real benefit to service levels and cost reduction, in 37% of organizations marketing is still the main function leading the effort.
In only 18% of organizations is customer service the function leading it. Experience here shows that genuine cooperation between the two is required, and indeed in about 33% of organizations marketing and service lead it together.
In summary, integrating digital channels into the service operation has marketing aspects and a great many service and operational aspects, both immediately and over the longer term.
Organizations are ready for it, and more than that, customers expect it. Service managers are in a position to lead and to be involved in integrating digital channels, building an overall plan that prioritizes the various platforms according to the needs of the organization and its customers and enables an informed launch. In such a launch, standing up the systems is backed by building the teams, the processes and the right management and control methods, which keeps service levels intact throughout.
