Channel communication

Communication and the exchange of information with customers has intensified considerably, not least due to technological advances. The exchange can now take place on several channels, and channels can be changed easily. This confronts companies with further challenges. The aim is to reach customers through all possible channels to provide information and support in purchasing decisions. The customer journey refers to the process from the initial point of communication to the eventual purchase decision. In this decision-making process, customers demand support and availability. They choose the most convenient contact channel for them in the respective situation.

Companies find it difficult to adjust to customer behaviour because the behaviour patterns are very individual. Nevertheless, strategic decisions have to be made regarding the alignment of defined communication channels with customers. The channels offered to customers depends on available financial resources. Companies strive to better understand the customer journey in order to use marketing and sales effectively. In times of intensified competition, customer orientation is a decisive competitive advantage. Accordingly, one can assume that customers prefer to be loyal to companies that try to understand and respond to customer requests. Establishing communication channels and sales channels carefully requires the specific expertise of company management. To make matters worse, both the sales and communication channels are subject to constant developments.

Despite the growing variety of communication and sales channels, the top priority of companies remains to be the understanding and manipulation of customer behaviour. The different customer touchpoints have different effects on their buying behaviour. If it is possible to analyse each channel’s pros and cons and use them accordingly, positive effects on the company result can be derived. If it is not possible to understand customer behaviour, the company is virtually flying blind and the customers' decisions are made in a black box.

Companies then lose opportunities to initiate strategies that are critical for success. Due to the dynamic development of the market and technology, a separation of sales and communication channels is no longer possible, as activities increasingly converge here as the example of online sales shows. How customers obtain information is, on the one hand, very customer-specific and, on the other hand, it is difficult to track information exchanges when customers change between online and offline communication (Böcker, 2015, pp. 165–

167).

Figure 12. details the customer journey and clarifies the impact differing advertising and communication channels can have on that journey.

Figure 12. The customer journey.

Source: Bocker, 2015, p. 168

The customer journey offers great potential for companies in competitive markets. The basis for the success of a company is quality products and effective customer communication. An active approach in understanding customer behaviour and tailoring appropriate actions accordingly increases the chances of business transactions. Customers appreciate the outcome, because purchasing processes run more smoothly (Böcker, 2015, p. 177).

Messages and news appear continuously across multiple channels and create an unprecedented opportunity to gather information. With this information huge possibilities and choices are available. The speed with which conditions change is constantly increasing and presents new challenges for both customers and sellers. In this uncertainty, consultants try to influence companies and contribute to even more uncertainty. The challenge, therefore, is to identify trends as quickly and accurately as possible. In such an unsafe environment, it becomes increasingly difficult for companies find an appropriate market position. In this phase, the transition from supply driven markets to demand markets takes place, but customers are demanding more than good products or services. They are looking for emotions and feedback from other’s experiences with respective companies. Clear and transparent communication accompanied by innovative products or services are essential (Belz, Bieger, 2006, pp. 61–62).

Multichannel activities have been growing over the years. Customers preferer to use multiple channels in business and companies have learned to manage those activities to benefit them.

CRM support is really beneficial for such challenges. Active management of multiple channels is necessary to avoid the risk of company cannibalism. Managing multichannel activities generates a unique view on the customer and helps to deliver exact services demanded by the customer on the respective channel. Such activities provide a learning curve based on the insights and helps to develop a more efficient CRM strategy (Awasthi, Sangle, 2012, pp. 445–446).

CRM can support structured communication over various channels. Opportunities coming from collected data need to be considered. The data can be used for deep analysis. CRM can be developed into a data mining system and function as an information provider that enables businesses to provide one-to-one service. The information gain and technological advances support personalised customer support. In addition, the available information about buying patterns can be used to identify further opportunities (Kumar, Reinartz, 2012, pp. 371–373).

The massive amount of information collected ensures improved customer service (Landry et al., 2005, p.233).

In terms of CRM-supported communication, it is possible to differentiate between three communication channels that have emerged due to technological developments. Starting with the traditional CRM, this includes communication via letters sent by post, contact via telephone, fax or call centre. The next step is electronic CRM where customer contact is sought and maintained via the internet and the possibilities derived from it (e.g. e-mail, interactive digital television or web-enabled call centres). Then there is the mobile CRM variant, which provides all options for maintaining contact with customers via the mobile phone, such as SMS services, Wireless Application Protocol (WAP) etc (Awasthi, Sangle, 2012, pp. 450-451).

Employees often believe that the CRM initiatives force them to communicate too regularly with their customers. It means in effect, that resources are not used effectively. Customers may be irritated by regular communication which could lead to customer churn. Marketers need to act cautiously and carefully plan the frequency of their communication with customers. The strategy here can influence the customer to stay in a relationship with the company or not (Kim et al., 2012, pp. 90–91).

Technological developments in recent decades have made it possible for customers to choose from a variety of channels to contact a company. This development poses an enormous challenge for companies, but it also opens up opportunities because multichannel shopping increases profitability. Furthermore, marketing activities can be implemented effectively.

However, multichannel marketing also leaves many unanswered questions. Pricing, for example, is a frequent topic of discussion. Should products should be advertised differently on different channels? Another topic to be considered can be how to deal with older channels now they’ve been outgrown by new developments. For example, it is unclear whether the business catalogue should be abandoned and shifted to the internet. The reaction of customers is unclear, because the catalogue also serves as inspiration for customers who then make purchases. Abolishing catalogues could therefore have a negative impact on sales figures (Verhoef et al., 2010, pp. 129–130).