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.