Sunday, August 07, 2005

Path 3: Overcoming Channel Proliferation Woes

Encourage Customers into Profitable Channel Behavior

Communications with customers has become fragmented, inconsistent and confusing. For business originators, this translates into dissatisfied customers, more non-productive administrative work and lost business opportunity. Such fundamental issues are putting renewed pressure on profits and demand new answers.

PROCESS: Set your target for customers that you want to encourage to migrate to new channels. Have your customer managers identify customers who are marginally profitable. Set a corporate goal of moving, for example, a third of these customers into more profitable channel behavior.

CULTURE: This calls for educating customers on the added value they gain in using alternative channels and about the various channels available to them, with suggestions on how to use remote and electronic channels. Yes, customers will always prefer using the channel they find most convenient for each particular activity. But this desire for convenience can be instrumental in changing behavior if you show them how remote and electronic channels actually give them more control. Reward managers for actively steering customers to alternative channels and reward the customers themselves – using both one-time incentives and/or long-term discounts on services to cause channel trial and to get the new behavior in place.

TECHNOLOGY: Building a unified view of each customer, using all the data throughout the enterprise. Apply business analytics to understand what drives channel satisfaction among customers with similar needs. Match services to deliver these drivers in each appropriate channel. Create cluster groups of customers with similar needs (i.e., low-cost segments, convenience segments, loyal segments) and develop a matrix for each, including such factors as segment characteristics, prioritized customer needs, channel objectives, product purchase patterns and ideal products and channels for each segment. This matrix helps you understand the issues you are dealing with in each channel and gives you a basis for making sure your channels are delivering the best possible service at the most profitable rate of return.

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