Is Omnichannel the key to B2B business growth when it comes to your EXISTING customers? (McKinsey)
Jermaine Edwards
Teaching CEOs and Customer Leaders how to build organisations their customers never want to leave | Customer Strategist | Advisor | Author | International Speaker | Investor and CEO of Irreplaceable Advisory Group
I love good research and have run research groups myself.
When I come across specific research that offers a new perspective I ask.
This article is a reflection of both of these questions from a recent article I read from McKinsey.
In their article, they advocate for all B2B businesses to focus on omnichannel experience as the KEY to growth for every business.
Why do they say this?
From their research of 3,500 decision makers across 12 markets and almost 300,000 data points (very extensive), they found that customers wanted more channels of communication, more convenience (a result of more channels) and a more personalised experience.
They discovered that those companies with 10 or more channels, drove more sales.
Not only that but customers demanded that these five things be present in omnichannel:?
Note: you can read more about this in their article – link.
I do agree that there has been a great shift in selling practice and customer needs.
This has led to a broader awakening in many sectors, to massive investment in providing greater digital and virtual capability. It has added additional layers to the experience of customers, channel use and adoption.?It’s clear for many companies it’s led to more sales; it is unclear what the breakdown of the sales acquisition is.
It is very important that every business is aware of shifts to adapt their customer journey, and importantly that they know the results they want to deliver and the expectations of their customers at the point of interaction.
That might mean optimising for more channels.
It certainly means ensuring a consistent experience.
Where do I raise an eyebrow? I could be wrong...
I don’t agree with the conclusion that omnichannel investment should be applied as THE KEY to business growth with your EXISTING customers. There are three reasons why based on McKinsey’s research.
ONE: The research doesn’t answer the question “Why”
Despite the research covering 12 different markets, surprisingly it does not refer to the attributes that are shaping customer decision-making and the drivers for omnichannel.
We may think it’s obvious but it isn’t.
Why does this matter?
The market you’re in and what drives customer behaviour makes a difference.
Look at customer history (one resource to consider)
The last 200 years of market research clearly shows that customer trends follow five primary influences:
The pandemic for example shifted all five and millions of businesses were not ready.
By understanding these influences, you can be ready.
As a business, if you’re not paying attention to what influences your customers, it’s very likely in the next wave of change you’ll be left vulnerable again.
Evaluating omnichannel through this five-lens process is no different.
What might influence your customer, their customer and or organisational behaviour considering the five areas? To what degree does omnichannel impact this?
I’d make a confident bet that if you were to survey your current customers, the top three most referenced areas would not be those of McKinsey’s findings.
Here is a question on each influencing factor to reflect on.
Psychological Factors
What is happening in the world of your customer that may challenge or change their current beliefs and attitudes within their business relating to your products and services e.g. changes in technology?
Social Factors
What is happening in the world of your customer today that may impact how they respond to their selection of providers e.g. ESG?
Cultural Factors
What is happening in the world of your customers today that may impact the things they value most e.g. the wave of working from home?
Personal Factors
What is happening in the world of your customers that may impact the way individuals relate to the priority of your services e.g. change of roles?
Economic Factors
What is happening in the world of your customers that may impact their confidence in investment e.g. recession?
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An Action:
Before making any judgements we should be:
You may want to choose one question and apply it to a customer or a customer segment you have today.
TWO: No evidence that Omnichannel improves client outcomes
This is a quote taken directly from McKinsey’s report.
I agree wholeheartedly, with the view of the client’s journey.
Omnichannel in a broad sense speaks to where we connect with our customers.
Where and how we connect with our customers is important.
If we were truly taking a client-centred approach we would always begin with the “Customer” outcome. It could be that omnichannel is the key to delivering this for you. Let me offer some alternative questions.
Questions like these are worthwhile to reflect on.
Why?
More important than what you do is understanding what really influences the result to the achievement of any result between you and your customers.
Whereas Omnichannel and experience may be important it certainly doesn’t answer the question of how to predict long-term growth with your customers.
The McKinsey report demonstrates no evidence for this.
THREE: Optimising for channels becomes a war of attrition and eventually leaves you with no distinct advantage.
Case study:
Almost every B2B business took on “virtual or enhanced virtual delivery” as a new adaptation in 2020.?
They gained a small advantage in being able to protect against significant drops in revenue and relationship equity with their customers or potential customers.
The challenge was…
…6 to 12 months later this was no longer a competitive advantage. Most of their competitors had access to the same tools, developed similar skill sets and were telling the same story; “We can now deliver to you virtually.”
For your business, and particularly the view of whom you’ll become to your customers, you must look at the actions and decisions you make through the view of differentiated value.?
It means we have to think differently
about how we adapt.
A shift in perspective,
before a shift in activity.
This is not about whether or not you’re keeping up with best practices or providing the best omnichannel experience. The weighting of influence will vary greater across sectors and industries.
It’s about understanding whether or not you’re building unique capabilities that grow the gap between you and all your competitors.
Capabilities that are connected to the current and future outcomes of your customers to make it irrefutable that you are the best alternative in the market.
What Now?
I still encourage you to read the McKinsey article as there are some helpful insights in it. I caution you to take this as evidence for you to bank on Omnichannel as a catalyst for driving customer revenue growth.
What’s the real key to consistent repeatable customer growth results?
Take the Customer Impact Score to find out your score and join the “Customer Transformation Leader” community as we seek to activate the influences for results with our customers. Ultimately to build organisations our customers never want to leave.
I strongly believe, your customers are your number 1 strategic growth advantage.
To realise this you need a shift in perspective before a shift in activity.
Jermaine Edwards
Advisor | Author | Customer Growth Specialist | International Speaker | Founder and CEO of Customer Transformation and The IAG Ltd