Few words have consistently buzzed around the digital age like “omnichannel” — in response to increasing customer expectations for a seamless purchase journey, in an effort to deliver better customer experiences. CEOs themselves feel a growing responsibility to represent the best interests of their customers, according to KPMG International’s 2017 CEO Outlook Survey.
While multiple cross-channel interactions are important for customer engagement, they alone are not enough for companies to compete in today’s environment, according to KPMG’s new report, Competing for Growth, with insight from its 2017 CEO survey and KPMG-commissioned Forrester research of more than 1,200 organizations.
The key to growth, the report emphasizes, lies in the ability to design and deliver compelling, friction-free customer experiences. Delivering these differentiating experiences requires companies to orchestrate and connect with key stakeholders including customers, employees, partners and individuals across their own functional business units. The KPMG research shows that there is a set of eight integrated capabilities that distinguish the leaders from the laggards.
The bottom line is that connecting with customers and integrating the right channels is a good first step, but the rest of the business must also be fully connected, explains Julio Hernandez, partner, Global Customer Centre of Excellence Lead and U.S. Customer Advisory Practice Lead at KPMG.
“For example, if a marketing offer promises customers they will get something overnight, but operations and supply chain can’t fulfill it, then you’re not executing on that promise,” he says. “If your employees don’t understand what kind of tone they need to take with customers and what the brand represents, executing against that vision doesn’t work — even if you integrate interaction and engagement channels in the best way.”
The Forrester research in the KPMG report, he points out, validates this hypothesis: ”We found companies that actually invest in this integrated architecture actually do better,” he says. Signs of success include optimizing and leveraging real-time data; optimizing the economic value of priority customers; identifying synergies with third parties; integrated payment mechanisms across channels; and a culture of innovation and agility.
Becoming a Connected Enterprise
The connected enterprise, according to the KPMG report, is able to understand what customers need and value, and achieve it by delivering the intended experience profitably. They also have the responsiveness and resiliency to evolve with the changing consumer and competitive landscape.
For most companies, the push to digital began in the front office — with a focus on the interaction channel and development of digital engagement applications. The challenge is this only represents a portion of what the business must do to execute on its customer promise. And while companies are recognizing they need to move beyond the interaction channel, they often fall back on a functional approach to address parts of the problem.
There are a handful of reasons for why companies have taken this fragmented approach, versus a more comprehensive method to becoming a fully-connected enterprise, says Hernandez. One is that companies still struggle to understand and get alignment around what their customers need, value and want. Next, many companies have tackled some of the functions around customer-centricity individually because it is easier to mobilize. However, this results in a lack a of grand vision in terms of how the different pieces work together — the architecture, the roadmap, and the blueprint. “Each function may be doing something valuable, but they aren’t working together,” he explains. “There’s a disjointed approach and it takes a great deal of discipline to weave these capabilities together as well as stay united towards the larger vision.”
According to Competing for Growth, the good news is that high-performing organizations are increasing their efforts to become more connected by making significant investments across core enterprise capabilities, including:
- Connecting with customers with a compelling value proposition — that is, understanding what they want and how they want it.
- Empowering employees to follow through on the value proposition.
- Breaking down silos and barriers between the front, middle and back office.
- Connecting with channel and business partners to help them understand the organization’s goals and agenda.
- Staying abreast of market dynamics and digital signals — that is, being able to interpret, react and respond appropriately to the marketplace.
In order to begin to move toward a customer-centric connected enterprise, the report further emphasizes a series of key steps, including considering how you are performing today in terms of services, products and capabilities; defining the customer experience the organization wants to deliver; identifying the necessary requirements for delivering the appropriate customer experience; developing a roadmap for closing gaps; and then executing the plan and measuring progress.
The Value of the Customer-Centric Opportunity
The KPMG research in Competing for Growth found that it pays to be connected: Compared with less mature organizations, companies that invest across the eight capabilities are meeting customer expectations. In fact, 76% of mature organizations delivered against or are exceeding expectations, compared with 57% of all others.
“We were pleasantly surprised at how many companies are implementing these efforts and that the data supported our hypothesis that companies that connect their enterprise functions enjoy better returns and happier customers,” says Hernandez. There is still more to do, of course — the research also found that only 24% are fully implementing all the essential enterprise capabilities of a connected enterprise — but he says the number of companies examining and investing in these integrated initiatives will grow.
“I think we’re going to see a lot of companies moving toward this ongoing journey, using this connected framework and developing stakeholder groups that bring the organization together to properly execute,” says Hernandez.