Exploring the role of the online customer experience in the firm’s multichannel strategy –

An empirical analysis of the retail banking sector

AM CRM/Segmentation SIG Workshop Oxford Brookes University November 1st, 2012 Prof. Phil Klaus MBA, MRes Bang Nguyen PhD

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Overview...

•  Background

•  Research Objectives

•  Theoretical Framing

•  Findings

•  Contributions

•  Implications

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Social Media...

Importance of Customer Experience

• Key Objective For Organizations Worldwide

• Next Competitive Battleground

• Marketing Science Institute Top Research Priority

• Lack of Empirical Research and Strategic Direction

• Key Component/Core of SD Logic/Core of SD Logic

• Strategy To Engineer Experiences Leading To Value For The Organization And The Customer

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Importance of Current Study

•  Customer Experience Multichannel Management From The Organizations Point-of-View

•  Strategy To Engineer Experiences Leading To Value For The Organization And The Customer

•  Key Objective For Organizations Worldwide

•  Next Competitive Battleground

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Importance of Multichannel CX Strategy

•  Need for Clear Strategy •  Learning from (Mistakes of) the Past •  Challenge of Broad, Holistic Definition •  Clear Scope, Achievable Plan, Develop Dynamic

Capabilities •  Otherwise Repetition of Process-Led Change

Marketing Management Failures

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Scope of the Study

•  Explore Successful Multichannel Customer Experience Segmentation Strategy

•  Explore Customer Experience Practice & Management

•  Key Objectives, Business Processes, Benefits, Integration, And Outlook

•  Typology of Multichannel Customer Experience Management

•  Explore Link Between Customer Experience Strategy and Profitability

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Research Objectives

The purpose of this paper is fourfold: (1) we synthesize extant retail banking service literature; (2) explore current online channel retail banking service strategies and practices, to (3) determine and categorize existing practices; (4) explore the role of the online customer experience, and in particular the role of social media in a multi-channel environment, and; (5) discuss the impact these findings have on the firms’ segmentation practices.

• Qualitative Study •  In-Depth Interviews

•  Cross-Validation

•  32 Expert Interviews

• Grounded Approach

•  Hierarchical and Axial Coding

•  Expert Panel of Judges

•  Purification and Validation through ECT behavioral Aggregation (5 Dimensions and 29 Items/Attributes)

Research Method

• Sampling Frame • Managers were selected

qualifying them as “a judgment sample of persons who can offer some ideas and insights into the phenomenon” (Churchill 1979:67).

•  The interviewees’ companies’ headquarters were located in countries demonstrating service-economy orientations such as the Unites States, Canada, England, Finland, Sweden, Italy, Germany, Luxembourg, and Spain.

Oxford Brookes Business School ©2012 Oxford Brookes University

Findings – Dimensions of Multichannel CX Strategy

Oxford Brookes Business School ©2012 Oxford Brookes University

Dimensions Definitions

Key objectives Objectives, roles, and use of integrating online channels strategically

Business processes How online retail channels influence the range and execution of the organization’s internal and external processes

Benefits Statements explicitly and implicitly connecting use of online channels to corporate performance

Integration How online channels are integrated and managed in the organizational environment, internally and externally

Outlook Strategic outlook and influence on practices and strategies based on use of online channels

Contribution – Typology Introducers Converters Integrators

Key objectives Acknowledge and try to develop online channel because competitors are dictating it; cost-cutting opportunities are a primary objective

In the process of implementing an online channel strategy; externally focused toward customers, internally toward communication and data access efficiency

Constantly develop online channel as part of a multichannel strategy; sophisticated focus externally toward all stakeholders, internally as key communication tool and enabler to develop and allocate resources.

B u s i n e s s processes

Support customers and internal transactions and communications; spare use of social media to track competitive environment

More than transactions and communications; use of social media to track competitive environment and customer perceptions

Integral part of external and integral communication and transactions; social media used internally and externally for resource allocation, gaining customer insight, new product and service development, and project management

Benefits Solely functional; focus within the firm on cost reduction

Linking online channel strategy to loyalty, brand perceptions, and (intuitively) sales and profits

Policies and operational levels are aligned strictly; continual internal and external assessment and development of strategy and practices

Integration Inwardly focused on lack of overarching vision; avoid tension between channels

Strategic intent; internal and external focus; managing tension between channels

Cross-functional ownership; buy-in from entire organization; tracking influence of strategy internally and externally, and evolving practices

Outlook Keeping up with competition and technology; focus on evolving data-driven decisions

Acknowledging and trying to develop a multichannel strategy; focus on technologies and data to improve performance internally and externally

Multichannel rather than online channel strategy; constant reinvention and maintaining competitive edge; managing challenges and benefits of data-driven decisions; technology only an enabler, not the focus

• Unique Firms’ Viewpoint of Multichannel CX Strategies

• Exploring Practices • Distinctive Typology Over All Dimensions • Segmentation • Foundation To Explore Relationships… • Link To Profitability • Resource Integration • Social Media

Conclusion

To create a better multichannel CX strategy through the development of a online channel management typology.

The Customer Experience Multichannel Strategy

Questions…?

• A Continuum…?

• Relationship to profitability?

• Main influencers…?

• More questions ahead…

• Your insight – please contact:

• profdrphilklaus@gmail.com

• www.profdrphilklaus.com

• @profdrphilklaus

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