The Bottom Line: 5 Reasons to Start Measuring & Managing Channel Profitability Now

Why cross-channel analysis is the new game changer for LOB heads

As businesses continue to evolve and embrace new technologies, and expand to digital channels, the customer journey has become a complex maze of touchpoints. Today’s customers interact with businesses through multiple channels, including social media, email, phone, and in-person interactions. With so many channels along the customer journey, trying to measure the revenue, costs and profitability of channels and journeys can feel like navigating a minefield blindfolded! However, it’s critical that these relationships are understood.

This is easier said than done, though. Heads of different business areas all own or co-own different channels and parts of the customer journey, and they all aim for revenue growth, cost reduction, and improved customer experiences for their areas. Failure to do so can come at a cost, and LOB (Line of Business) managers need to understand these relationships to maximize revenue and grow the customer base.

Failing to understand channel or journey profitability can have some negative consequences:

  • Missed opportunities. Without understanding profitability companies may miss opportunities to optimize their sales funnel, reduce churn or increase lifetime value.
  • Inefficient resource allocation. Businesses can allocate resources to the wrong areas leading to wasted time, money and effort.
  • Poor customer experience. Poor customer experiences could be created due to an incomplete understanding of the customer journey.
  • Decreased revenue, due to failing to optimize journeys and ensuring conversion and future purchases.

Today’s LOB heads require a framework for measuring and understanding the revenue and costs of channels and customer journeys, and the relationships between all the moving parts.

Understanding and measuring the relationship between business channels and profitability, throughout the customer journey, is important for the following reasons:

1. Improving customer experience

Understanding the relationship between business channels and revenue and costs can help businesses identify areas where they can improve the customer experience. Customers who have poor experiences are more likely to churn, or start sharing negative reviews. Churn is likely to be more prevalent in some channels compared to others, affecting the profitability of that channel. For example, if customers are having trouble finding the information they need on the website, they will be more likely to abandon and move on. In response, the business may choose to invest in website design and functionality improvements that help customers reach their goals.

2. Identifying profitable channels

Measuring channel revenue and costs can help businesses identify which channels are most profitable and allocate resources accordingly. Low profitability could be a result of poor resourcing or inefficiencies. The website, for instance, may be a relatively low-cost channel, but may result in no conversions compared to the call centre which generates more revenue per lead. In this case the business may choose to invest more in call center operations to increase revenue. This decision would be the result of a comparative profitability analysis of the channels.

3. Reducing costs

Measuring channel costs can help businesses identify areas where they can reduce costs without negatively impacting revenue. For example, if the call center is generating high costs due to long wait times, the business may choose to invest in additional call center agents to reduce wait times and improve the customer experience. This example also illustrates the interconnectedness of important factors, and how businesses require a framework for experimentation. Increasing costs on call centre resourcing could result in better profitability as a result of the uplift caused by better experiences.

4. Driving innovation

Understanding the relationship between business channels and profitability can provide insights that drive innovation and new business models. For example, a business that discovers that a customer segment prefers to shop in-store but make purchases online may choose to implement an optional buy online, pick up in-store (BOPIS) model to drive sales and improve customer satisfaction. It may be a segment of customers that don’t want to pay for delivery, or whose schedules makes taking deliveries difficult. By analyzing the channel profitability and understanding customer behavior and preferences, the business has activated another profitable segment.

5. Making data-driven decisions

Measuring and understanding the relationship between business channels and revenue and costs provides businesses with data-driven insights that can inform strategic decisions. For example, having deep insight into customer behavior and preferences may inform decisions around product development or marketing campaigns. In analyzing channel-specific customer behavior, it may emerge that one segment is abandoning for economic reasons, while another segment isn’t experiencing alignment with the brand promise. These factors result in journey drop-offs which have an economic impact and demand different interventions.

 

LOB heads need to answer some important questions about the channels and journeys in their area of the business:

  • Which channels and journeys are profitable, and which ones aren’t?
  • Which ones have improved or dropped off over time?
  • How does the profitability of one journey compare to another?
  • What are the costs of onboarding one new customer?
  • At what point does a new customer become profitable?
  • How many premiums per policy holder before we break even?

Heads of different business areas require a flexible framework for measuring and optimizing customer journeys for growth. Customer Journey Management is emerging as the toolkit of choice which offers LOB heads journey discovery, sentiment measurement and real-time interventions for optimization, and then extends into modeling and analysis of attribution, lifetime value, and retention.

Coming up: a closer look at Customer Journey Management as a means of discovering and optimizing your customers’ journeys as they interact with your brand, to improve customer experience and achieve positive business outcomes.

About inQuba Journey Management

Customer Journey Management is the laser technology of CX. Lasers offer targeting precision for specific use cases, and users have granular control. Similarly, managing customer journeys allows you to focus on the specific – cohorts, behaviors and use cases. Every systematic action is for someone, not everyone.

While CX results are flattening, inQuba Journey Management, which includes Journey Analytics and Journey Orchestration, is helping businesses to visualize actual journeys, understand their emotion, dynamically clear their paths, nudge them in the right direction and double customer conversion.

We’d love to understand your business challenges better, and discuss how Journey Management can transform your customers’ experiences and business growth.

Discover more about Journey Management with these great resources.

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    Bruce Eidsvik

    inQuba President, North America

    Bruce is a seasoned executive with over 25 years of experience in sales and marketing mainly within the customer experience space. Bruce has held senior executive roles at Genesys, a private equity backed cloud customer experience company and OpenText, a NASDAQ listed information management company, where he led their Global Growth Marketing and Sales Development organizations. Prior to these roles, Bruce was the Managing Director for the APAC region at Genesys, based out of Singapore. Bruce is also an entrepreneur and a co-founder of Insight Venture backed VoiceGenie Technologies Inc, which was successfully exited in 2006.

    This work has led Bruce to points around the globe, helping both Fortune 100 and SMBs alike. Bruce is a frequent keynote speaker at CX events worldwide, where he is more than happy to share his experiences and best practices to help others. Bruce is a team builder, has a passion for driving creativity, developing leaders and getting stuff done. Bruce strongly believes that fun is an important component of driving great results. Outside of work, Bruce is an avid skier, road and mountain biker, triathlete and in love with the mountains.

    Bruce holds a Bachelors of Science degree with Honors in engineering physics from Queen’s University. After 14 years abroad, Bruce and his family are back in Canada and living just outside Banff, Alberta.

    Liza Rogers-Nolte

    Head: Inside Sales SA and Marketing

    Liza joined inQuba shortly after inception in 2011. She has held various roles and responsibilities during the time and has been vital to the success of the business. Since 2016, Liza has headed up inQuba’s global Inside Sales function, responsible for identifying, qualifying and nurturing new business relationships. She also plays a fundamental role within inQuba’s marketing function, being jointly responsible for all key, global marketing events. Liza also manages the relationships of inQuba Partners, specifically the Microsoft Partner Relationship for which she is the MSFT Alliance Partner Manager.

    Prior to inQuba, Liza spent over 10 years in London (UK) gaining international experience in various industries. This included working closely with top executives in FTSE 250 and blue-chip companies in industries such as banking, private equity, investment property, executive search, and others.

    Prinay Panday

    Head: BI and DevOps

    Prinay is responsible for overseeing all IT operations, technical delivery and technical strategy for inQuba, ensuring alignment with the company’s business requirements and goals. Prinay is responsible for assisting other departments within inQuba, such as Product, Development and Professional Services, in utilising technology efficiently and profitably. He also spent several years in software development at inQuba which has provided him with deeper insight into effective technical delivery and operations of the inQuba platform. Prior to joining inQuba, Prinay worked in IT operations and software development across various industries including insurance, banking and retail. Prinay holds a Bachelor of Science in Information Technology from the University of Johannesburg.

    Dasha Naidoo

    Head: Product Experience

    Dasha joined inQuba in 2013 and has held various positions over the years. Dasha found her niche when she joined the core Product team in designing the inQuba CX platform. As the Head of Product Experience, she is ultimately responsible for the overall user experience and value delivery to inQuba’s customers. Dasha has been instrumental in the product’s success, providing insight into design, customer behaviours and practical solutions to complex customer challenges. Before joining the product team, she spent 2 years guiding customers through their Customer Experience programmes.

    With a professional career spanning 10+ years, Dasha has extensive experience across CX, Marketing, Campaign management and Data management and analysis. Dasha holds a Bachelor of Commerce (Information Systems Technology) degree from the University of KwaZulu Natal.

    Kobus Snyman

    Head: Service Operations

    Kobus is responsible for overseeing all technical operations including customer support and general operations activities ensuring the inQuba’s customer platform is optimal and stable. He has extensive Systems and Business Analysis experience gained from industries such as Banking, Information Technology and Mining. He has gained solid knowledge in Project Management, Disaster Recovery and Business Continuity management as he managed the Disaster Recovery site for one of South Africa’s Big Four Banks for a significant period. In 2016, Kobus joined inQuba as a Senior Analyst and has subsequently been promoted to Head: Service Operations, bringing with him the technical platform knowledge as well as customer management experience gained through the management of large, strategic inQuba clients. Kobus holds a Certificate in IT Service Management (ITIL) and SDIP. He also holds an ‘Essential skills for the Business analyst’ certification.

    Eben Odendaal

    Head: Professional Services

    Eben is responsible for the successful delivery of inQuba’s CX solution programmes to clients. He is an experienced Business Consultant and Project Manager and has delivered multiple Management Consulting, Digital Application and Software Development programmes, across multiple industries, throughout his career. Eben holds a Mechanical Engineering degree from the University of Pretoria, an MBA from the University of Stellenbosch and is a registered Project Management Professional.

    Allan Lee Son

    Senior Software Architect

    Allan is a Senior Architect in the core team working on the architecture and development of the inQuba CX platform for over six years. As a technical lead, product designer and software architect, he is a driving force in the inQuba Product Development team, providing insight into design and practical solutions to complex software challenges.

    Previous to joining inQuba, Allan’s five years at On-IT-1, developing software solutions for the Bosasa Group, have given him broad perspective on design, development and deployment of software applications across various industries, including aquaculture, youth rehabilitation, fleet management and device integrations for biometric and programmable logic controllers. Allan brings this valuable experience to bear on the challenges of developing a globally distributed SaaS platform.

    Allan completed his treatise in 2006 and holds a honours degree in Bachelor of Commerce (Computer Science and Information Systems) from the Nelson Mandela University.

    Warren Reed

    Senior Software Architect

    Warren is responsible for high-level software design choices and selecting the best tools, platforms, and technologies for developing and delivering inQuba’s CX software platform. He helped build the inQuba platform from the ground up, including products such as Engage, Case Management, and Journey Analytics. He implemented the continuous delivery pipeline that automatically deploys inQuba’s software solutions globally. Prior to inQuba, he spent five years at Bosasa architecting and developing systems for vehicle maintenance, youth development centres, access control security, and job recruitment. He also spent two years at Korbitec developing legal practice management software. Warren holds an honours degree in Computer Science and Information Systems from the Nelson Mandela University.

    Jon Salters

    Non-Executive Director

    Jon brings with him a wealth of experience in market research and technology enabled services in the insights domain.

    Prior to being strategic advisor to inQuba, Jon spent four years at Vision Critical, the world’s leader in Insight Community solutions where he launched Vision Critical’s presence in Africa, re-launched their partner program internationally and was also integrally involved in the team that executed the spin-off of Vision Critical’s Research and Consulting business unit which became a cornerstone of the newly formed Maru Group.

    Jon holds a GDE in Engineering Management and a B.Sc Mechanical Engineering (industrial Option) for the University of the Witwatersrand.

    Antony Adelaar

    Head: Product Marketing

    Antony joined the inQuba story early, towards the end of 2011. He is responsible for the planning, design, production, marketing and release of inQuba’s CX software solutions to customers on 4 continents. Prior to managing product, Antony oversaw the account management team who in turn oversee inQuba clients using the full range of inQuba CX solutions.

    Antony has ten years’ experience in market research across the African continent and across all major industries. Prior to inQuba, he headed up digital research at an agency, Yellowwood Future Architects, which specialises in strategy, research and design.

    Antony completed post-graduate Leadership Development studies at Gordon Institute of Business Science (GIBS), following a Bachelor’s degree (Industrial Psychology) at the University of South Africa.

    Trent Rossini

    Managing Director

    Trent is responsible for all operational delivery, professional services engagement, product conceptualisation and delivery of inQuba software. Prior to joining inQuba, Trent was the CIO for Discovery Health and in 2003, was appointed as COO of PruHealth, Discovery’s UK joint healthcare venture with Prudential. He also spent several years consulting on various systems integration projects for Deloitte and Accenture.Trent holds a B.Sc.(Mech) Engineering from the University of the Witwatersrand and a Graduate Diploma in Industrial Engineering.

    Micheal Renzon

    Group CEO

    Michael Renzon is an entrepreneur and visionary and the driving force behind highly successful internet, technology, content and Customer Experience companies. He is an Endeavor Entrepreneur, the leading high-impact entrepreneurship movement around the world, and was named the Most Promising Entrepreneur of Entrepreneur Organization (EO) in 2006.

    Michael’s thought leadership in Customer Experience and Customer Journey Management has been adopted by leading companies around the world who use inQuba’s analyst-rated Customer Journey SaaS Platform and Methodology to drive their customer experience transformation and customer journey optimization.

    Michael holds an MBA from the University of Cape Town, an Honours Degree in Computer Science and a Bachelor of Economic Science Degree, both from the University of the Witwatersrand.

    <h4>Link to CX series</h4>

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