This article is based on an executive roundtable hosted by 7I’s and Oracle. The session explored the business potential and opportunities presented by the multichannel world.
The discussion centered on four main questions:
The discussion focused on four key questions:
- What is the level of customer demand for services through digital channels?
- How ready are organizations to provide services through digital channels, and what motivates them to do so?
- What can we learn from organizations’ experience about the best approach to launching digital channels?
- Does experience show that the investment is worthwhile – and for whom?
The following is an overview of the key insights:
Digital channels are becoming an increasingly integral part of our lives, both as customers and as service providers, whether through a structured process or as a natural evolution driven by demand and value.
Multiple Channels vs. a Multichannel Strategy
More and more customers expect to have a choice that includes digital service, with a particular preference for direct channels such as SMS, WhatsApp, and email, rather than organizations’ dedicated platforms such as personal account areas and apps. In a survey conducted during the session, 67% of respondents reported that at least 85% of their customers are digital users.
Participants also noted a steady increase in the number of customers using digital channels. At Mizrahi Tefahot, for example, where customers can receive full service by email from their personal banker, approximately 30% of inquiries are handled through channels other than face-to-face or telephone service. Other organizations reported that up to 20% of transactions are now completed through self-service channels.
The evolution began with self-service platforms, which are perceived as both cost-effective for the organization and accessible to the customer. In a survey of the companies participating in the session, 36% of respondents said their organization currently offers only a self-service platform and does not yet provide interactive service through digital channels.
Another 44% said they also provide service on a range of topics through email or chat, while only 20% reported that all services are available across all channels. The discussion revealed broad agreement that digital service should be approached holistically and supported by an overall strategy.
However, not all organizations have reached the level of maturity and readiness required to provide services through digital channels, and some do not yet have a formal digital-channel strategy. Organizations tend to launch individual services and channels on an ad hoc basis: 48% of respondents said their organization has no overall strategy and introduces new channels and services from time to time based on management decisions.
Launching Digital Channels Requires Organizational Preparation
Participants emphasized, particularly Kochavit Arnon, VP of Service at Harel, that before launching digital channels, organizations must first ensure that the underlying service processes are well structured and effective. Inefficient or poorly organized processes become even more visible when service is delivered through a digital channel.
Service through email or chat creates high customer expectations for efficient, end-to-end resolution. Customers are unlikely to accept being redirected to another channel after contacting the organization digitally. For example, being told to send a letter or fax, or visit a branch.
The approach recommended by 7I’s for developing a digital-channel strategy is to examine the full range of services across the different channels and assess the value created by each service-channel combination for both the organization and the customer.
The Challenge of Balancing and Managing the Shift of Inquiries Between Channels
Participants noted that once customers were given the option of contacting the organization through digital channels, inquiry volumes initially increased. However, after a certain period, volumes generally stabilized and returned to normal levels.
In organizations that introduced self-service channels, participants reported a decline over time in inquiries to contact centers. Even where overall service usage increased, a significant share of demand shifted to self-service channels.
Shifting inquiries toward digital channels remains a challenge, and organizations approach it in different ways. 30% of respondents said they differentiate service levels between channels, 27% make certain services available exclusively through digital channels, and 11% incentivize customers to use digital channels by offering discounts.
One issue raised, for example, was how to make digital channels accessible to the ultra-Orthodox community. Participants shared a range of possible solutions. The ultra-Orthodox population includes a variety of groups, some of which have unrestricted access to smartphones and can therefore use mobile apps. Other solutions mentioned included kosher websites and accessible information kiosks.
Participants also shared an important insight: one of the key factors in successfully adopting digital channels is gaining the cooperation of front-line employees in branches and contact centers.
At first, employees may perceive digital channels as a threat, an alternative to the service they themselves provide, and therefore tend to continue serving customers in the way they have always done. From the employee’s perspective: “The customer has already come to me -why would I send them to the app?”
There are several ways to engage employees in the transition. Galit Maskelson, Head of Products and Customer Experience at Partner, explained that, based on their experience, employees need to be familiar with all available alternatives and understand how they work. This requires training employees on the services and capabilities available through the website and app.
Similarly, experience at Isracard demonstrates the importance of ensuring that employees are not financially disadvantaged by shifting customers to digital channels. Rewarding employees for directing customers to digital services, or crediting them with commissions for transactions completed by their customers, such as debt collection through an unstaffed channel, can significantly support the shift to digital over the longer term.
Launching New Channels Requires Internal Organizational Preparation
As noted during the session, preparing to launch digital communication requires organizations to review and validate their existing work processes and adapt them to both the platform and customers’ changing expectations.
Participants also noted that the methods used to measure and monitor service levels, effectiveness, and efficiency in digital channels differ from those traditionally used for telephone and face-to-face service and must therefore be adapted accordingly. Measuring the new service environment with old tools can be misleading and may result in the wrong management decisions.
The profile of the service agent also changes. Digital channels require stronger written communication and writing skills than telephone service. Participants shared that when launching new channels, they generally selected experienced employees from traditional service channels who demonstrated strong written communication skills. Over time, organizations developed an increasing number of response templates, which served as practical tools and helped establish consistent standards for written communication.
Why Digital Channels – and Who in the Organization Cares?
Oren Cohen-Butensky, VP of Service and Sales at Isracard, summarized the issue simply: ask the CEO, and the trigger for launching digital channels is likely to be efficiency; ask the VP of Marketing, and it is innovation and positioning; ask the VP of Service, and it is improving service levels and the customer experience.
This perspective is also reflected in the survey results, particularly since most participants at the session were service managers. 58% said that the primary driver for launching digital channels in their organization was improving service. 23% identified perception and positioning as the primary driver, while only 19% identified operating costs.
At Mizrahi Tefahot, Uri Yunisi, Head of the Direct Banking Sector, explained that accessibility lies at the heart of the bank’s strategy: “We want customers to be able to contact their personal banker at any time and through whichever channel is most convenient for them.” Accordingly, the bank provides customers with a wide range of access channels, including direct email and SMS communication with their personal banker.
Odeya Kalfon, former VP of Service at David Shield, explained that communicating with customers through email and chat was a necessity for the organization because of the international distribution of its customer base. As a result, digital accessibility became a key differentiator in customers’ perception of the company’s service compared with its competitors. This was also reflected in the company’s NPS (Net Promoter Score), a metric that reflects the percentage of customers who would recommend the product or company to a friend.
Nevertheless, the question of return on investment in establishing digital channels remains relevant for most organizations. 63% of respondents believed that investment in multichannel service would pay for itself within a reasonable period, since digital channels are less expensive to operate and can enable inquiries to shift away from more costly channels.
The prevailing view among managers who have implemented digital channels is that overall demand for service initially increases (according to some, for a period of more than a year). After this period, however, clear efficiency gains can be seen, driven by the shift of inquiries to self-service channels and by the greater efficiency of digital channels.
From a sales and effectiveness perspective, a recent global benchmark conducted by 7I’s found that proactively initiating a chat while a customer is browsing the website can make a significant contribution to increasing conversion and sales rates among existing customers, as well as increasing the percentage of transactions completed through self-service.
Who Drives the Digital Agenda Within the Organization?
We were surprised to find that although service managers generally believe that developing a strategic plan for digital channels and integrating these channels into the company’s service operation can significantly improve service levels and reduce costs, marketing remains the primary function leading the initiative in 37% of organizations.
Customer service leads the initiative in only 18% of organizations. Experience, however, shows that genuine collaboration between the two functions is essential. Indeed, in approximately 33% of organizations, marketing and service lead the initiative together.
In summary, integrating digital channels into the service operation has important marketing implications, as well as significant service and operational implications in both the immediate and longer term.
Organizations are ready for this transition, and, more importantly, customers expect it. Service managers have the opportunity to lead and play an active role in integrating digital channels by developing an overall strategy that prioritizes the different platforms according to the needs of both the organization and its customers, enabling a well-planned and informed launch.
In such a launch, implementing the technology is supported by the development of the appropriate teams, processes, management practices, and measurement and control methods, enabling the organization to maintain service levels throughout the transition.
