… is outdated incentive structures in the companies. The incentives for the IT Director to work better with the Marketing Director are missing. Incentives for the Head of Retail to make sure your webshop is running. Incentives for the shop employee to take online orders return with a smile. And incentives for sending customers from the website to the store.

That was one of the conclusions from Thursday’s roundtable of organising the company in an omnichannel world. The sixth out of six scheduled roundtables as part of research for my book “If it is about me… Then I will buy!”. But of course there are also other barriers – please read on and become wiser.

The right incentive is needed before the customer is centred.

It is in the customer’s interest to receive the product in the right size, colour and at the right price. If your company has the right incentive structures, then the customer will be able to get what they want more easily. There is definitely a larger opportunity for them to find the “Find store” button on the website and see updated stock numbers online for their size and desired item. The customer can also choose to pick up in store, get help at the store with ordering the right item online and exchange an item bought online down at the store. They can find all their old orders on their app afterwards, etc.

Way too many retail chains have difficulties in getting their webshop going and online behaviour rarely gets a big cadeau before a sale in the shop – even Google can tell us that 27% of Danish people researched online before buying their most recent purchase in a store. First of all, this is due to the fact that the existing incentive structures work against the goal. The respective silos in the company are not getting any reward for sending the customer further even if it is often what gives the best customer value for the overall business. Way too often, the result is that the customer chooses to just buy their item in another shop. Maybe even in an external webshop.

It is difficult to change

But why are the incentive structures not changed? The answer is very simple – it is difficult.

It is difficult to change the job goals and the bonus order for a department if the Director himself does not even have the incentive to do so. Why should the Sales Director even bother to ask the employees in the shop to send the customers over to the “Marketing webshop” if you only get 15% from the sale there? For this reason, it easily becomes a matter for the top management – to make a decision about putting an end to the silo thinking and bringing the customers back to the centre. Per Østergaard Jacobsen, the writer of the CRM handbook 2.0, speaks specifically about having an intentional customer strategy and to dare to follow it.

Even when the willingness is there, there is still a bit of a way yet – for there is only one employee conversation a year – and what about the bonus, which is already adding up for the 1000 call centre employees, who all get rewarded for a short response time. Or the 1000 other employees in the shop, who are used to making the sale here and now in their shop – or else they will miss the bonus. Not to mention the 150 franchise shops, which have their entirely own agenda and maybe are on a totally different economic system.

It soon becomes complex and often takes up to an entire year to just start changing it. In addition, it must really be considered how to achieve motivation among the employees – is it a good idea to establish individual KPIs? It is not safe. Furthermore, new goal-oriented tools must be built to ensure proper governance – for example a tailor-made dashboard for all with the new customer-focused KPIs.

Understanding and competence

On the day we focused a lot on how much understanding and competence means for the adoption of an omnichannel initiative. The conclusion was that far from all shop assistants have the right competences to use the tools needed to be applied in omnichannel – even if there are of course exceptions.

On the other hand, the understanding of omnichannel is something that needs to be worked with everywhere in the organisation – not only among the shop assistants (if you have shops…). It is not only the incentives structures that need to be changed – the employees also need to understand and see proof that an omnichannel customer is worth more to the company than a single-channel customer. The level of abstraction must be improved from bricklaying to taking part in something bigger – building a cathedral for example.

Omnichannel Tools

You cannot overlook the fact that omnichannel is also technology. Therefore, the right tools become a precondition for being able to deliver results based on an omnichannel vision. The webshop must be running and data must be going back and forth from the shop and between apps, websites and point of sale without any problems. All employees who serve the customers directly (shop, call centre, chat, Facebook etc.) must have the right tools for looking up the customer in the system and then being able to go through their history and in all likelihood give an intelligent recommendation based on the accessible data.

Mobile cash registers – the so-called Liberators – relieve staff from the ancient counters and let them serve customers where they try on the clothes. Tablets in the dressing room make it possible for the customer to see if there is a smaller size of the blouse they are trying on at the moment – and then of course there is also a button for calling sales staff.

An infrastructure like that does not build itself of course – so in some way it is once again all about competence and resources. Very few organisations have the competences to build a setup like that by themselves – and it can be difficult to hire the right competences to build it. Often it becomes a solid investment among the various agencies.

The good news

Luckily Danish organisations experience not only barriers to achieving omnichannel nirvana. Research shows the experience benefits equally as big. Companies which work effectively with omnichannel have, according to Aberdeen Research, 91% better degree of insistence on average per year than companies who do not. [1]

Problems with the incentives structures is a transitory phenomenon

The biggest barrier, the incentives structures, is, according to Per Rasmussen, CEO of eCapacity (Business Specialists in digital and omnichannel strategy), a transitory phenomenon, which seems rather insurmountable right here and now. But in the future a customer-centric incentives structure will be seen as a matter of course and as something that you do not even have to explain to employees – since it existed where they came from.

In Denmark we have a flat management structure

Even if it is difficult to break away from the structures in Denmark, there are still a couple of special circumstances that makes Denmark quite prepared for omnichannel. One of these is the flat management structure. Even though it is long way to the top, it is not as far as in big enterprise companies in the US. In Denmark, everyone is allowed to make a decision – within a set of parameters of course. It makes it a lot easier to change the culture in the company – that is, if there is understanding.

Small silos in Denmark

Even if our silos seem all-consuming and the way to the IT department is a long way off, we are not flying through several time zones for a face to face meeting, which is the case for many in the big wide world. It makes it easier to strike up a partnership.

Digital competence is high among the Danish people

Nearly all Danish people (82% according to FDIH) own a smartphone today. Most of them also use the advanced features like the apps and uploading pictures to social media for example. Moreover, a large majority of Danes read and write very well. This provides a fantastic foundation for ensuring a solid omnichannel experience in every 1:1 meeting with the customer.

 

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