This is only part of the story.
|Adjust customer channels to find the right balance|
of profitability. Photo: Flickr user Dustin.Askins.
The key, then, is aligning client profitability with the appropriate channel, or balancing profitability across channels.
How does this work?
I used to work for a large company that served customers in several different ways. There were low cost channels and high cost channels, and I think we did a pretty good job of aligning customers accordingly.
Our low-cost channels included web sales and telesales. It was inexpensive for our company to do business online and via our call centers, so, where possible, most customers were directed to one of these channels - "Just call or click," we'd say.
Our retail stores were medium-cost, because we were able to effectively bring in new customers this way, and sell them lots of profitable add-ons. Once we had these customers in the fold, they were encouraged to deal with their bills and any additional service they needed via lower-cost channels like web and telephone. In this way, we balanced channels so that high-value sales, like signing up for new service and purchasing equipment and accessories could happen in-store, and lower value activities, like address changes and billing questions, could be directed to lower-cost channels while still providing customers with great service.
Our highest-cost channels were what we referred to as "National Accounts." This included a sales force who called on businesses with multiple customers in-house. While it was expensive for us to maintain this sales force, provide them with the right equipment and tools, and send them all over their territories to meet with customers in-person, it was still profitable for us to serve customers this way since these were very high-value customers that provided a high rate of annual revenue.
So, what's the moral of the story?
Take a look at your channels, and make sure you're putting your energy in the right place. There's nothing wrong with a high-cost channel as long as you're getting a return on your investment.
How do you balance across channels and where are you realizing economies of scale? Need help doing this? Let me know.
How to Find Better Customers
Speaking of Channels, Do you Need a Mobile App?