Progressing your omni-channel maturity: how far do you really need to go?

by Chris Mellish

You may have heard or seen ‘omni-channel’ being touted as a panacea for organizations seeking to drive sustainable improvement in their customer experience. This has become especially magnified in response to COVID-19, as organizations have scrambled to stay relevant through a period where face-to-face human contact has been limited or impossible. 

Unfortunately, as with any change done with haste, a lot of people are buying into a concept without a clear understanding of what it means or the operational change it signifies for their organisation. While omni-channel can be the long-term aspiration, you need to recognise gaps in your existing capability and prioritise based on what your customers really want.
So, what exactly does omni-channel mean? Do you really need omni-channel capabilities? And most importantly, how exactly do you improve your omni-channel maturity in a practical sense?

1) What does omni-channel actually mean?
The term originated in the B2C e-commerce world and is used to denote a shopping experience that is seamless and stateful across physical and digital channels - allowing customers to continue their journey across channels without losing effort and context from previous interactions. This is in contrast to multi-channel, which may have the same channels available to customers, but has each operating more independently.
Thanks to the progress made in a lot of innovative industries, the expectations of customers in more traditional sectors have also been elevated, sparking the desire for omni-channel transformation. In reality, the distinction between multi and omni-channel is not black and white and maturity is more accurately described as a 6-stage continuum as illustrated below (with an emergent sixth stage we will explore another day).

What this hints at, and perhaps downplays, is the scale of change and investment required to move to a truly omni-channel future state. Customer insight, data integration, channel enablement and frontline capability all need to be achieved before that aspiration can be realized.
Fortunately for most organizations, an omni-channel utopia isn’t really necessary at first. When people think of the term, they are often just referring to incremental improvements in digital with some light-touch channel integration. Moving from stages 3 to 4 in the schematic above may be the more pragmatic aspiration.
2) Does my organization actually need omni-channel?
Moving away from the immediate urgency around the crisis, and the more fundamental ‘fear of missing out’ on the latest management fashion, there are two considerations as organizations define their omni-channel aspirations. 
Firstly, you need to understand your most valuable customers, their journey, and what matters to them most. Then, define the experience that you want to create at those ‘moments that matter’ and what role each channel plays. Once you have a fundamental understanding of your customer and channel strategy, you can work out whether you truly need a high level of maturity, or if you are really looking at incremental improvements in understanding, experience and channel alignment.
We typically find firms end up in 3 distinct scenarios:

1. If your customers are relatively happy with the current experience, have a strong preference for specific channels, and your strategy is not massively predicated on personalization, it may be sufficient to pivot from largely mono-channel to multi-channel and optimize the experience across existing channels by aligning this to customer value.

For example, consider the B2B2C world of Fast Moving Consumer Goods. Above-the-line marketing tactics utilized to drive awareness and exceptional shopper experience is critical. However, for suppliers further up the value chain, channel integration provides better incremental value than seamlessness when they engage their channel partners.

2. Other organizations that need to differentiate on experience will find value in personalization. However, their existing capability may be low and the gap to ultimate omni-channel seamlessness a bridge too far. In this situation it is best to first focus on the foundational enablers required to improve data quality, customer insight, digital maturity, and execution discipline. Only at that point, is it feasible to contemplate further investment in seamless experiences across channels.

For example, some organizations, like the Pharmaceutical sector, are historically product-first, experience-second, due to their reliance on the product lifecycle, patent protection and face-to-face relationship sales. Increasing regulation and low HCP consent has further contributed to an industry-wide reluctance to change the traditional go-to-market approach. However, the pandemic has forced organizations to rethink their ways of working entirely and we are starting to see green shoots of success in new digital channels. To maintain momentum, they should invest in data integration, channel alignment and functional collaboration to create a digital-first, pull-based model to orchestrate remote and face-to-face sales activity.

3. Finally for those players who are in relatively mature industries, where personalization is important to high-value personas and experience is a critical part of the value proposition, it is worth pursuing the lofty goal of full omni-channel maturity. These organizations have often already made the initial pivot from mono to multi-channel, and may even have a level of integration between channels. The second pivot to personalization and seamlessness is then worthwhile strategically and feasible operationally.

Consider the traditional High Street banks that are being disrupted by neo-banks who are offering a frictionless digital experience for consumers. Fortunately, established players have already invested in a range of digital and analytics capabilities which they can leverage. Rather than thinking of their existing, expensive high-touch models as an inhibitor, the opportunity is to integrate their data, technology and operating model, to harmonize the experience across all channels. Only at that point will they get full value from their brand reputation and scale.
3) So, you’ve decided you want to progress your organization’s omni-channel maturity – what does good look like?
Every company is different, and each firm needs to find its way based on the desired customer experience and current state maturity. However, irrespective of the chosen path, successful enterprises share some common characteristics:

  • They think holistically. In addition to the technology, they consider the people capabilities, processes, and data needed to deliver the target experience.
  • They adopt an agile test and learn approach. Most organizations don’t have change capability or capacity to make radical uplifts in maturity.  A measured approach of tackling end-to-end use cases reduces the change burden and allows the team to learn and course-correct.
  • They are ruthlessly focused on value. This domain is rife with stories of under and over investment. It is crucial to continually test and prove the value to earn the right to do more, while conversely, it is equally important for management to hold the course on these efforts and not “nickel and dime” investments in capability.
Omni-channel is more than a buzzword. It is an aspiration and a maturity continuum. Set your short and medium-term ambition based on the customer and competitive dynamics in your industry, then find a pragmatic pathway to your desired level of maturity. Getting to a level of multi-channel integration may be sufficient, or a necessary steppingstone to ultimate seamlessness. Or you may be in the fortunate position of being able to go from good to great. Whatever your situation, think holistically across all dimensions of people process and technology, take an agile test and learn approach and most of all, focus on the value you are adding to your customer and how your channels work together to deliver and capture outcomes for you.

Co-authored by Abhik Sengupta and Chris Mellish.