Silos are more common in traditional businesses than pure play businesses and start-ups: Myth or Reality?

Digital transformation initiatives are often driving the development of a more tightly integrated organization, breaking down silos internally between Marketing, IT, Sales, Procurement, Legal, Finance, etc… and also with external agencies and vendors. Most case studies I have seen or that I have been involved in, focus on transformation within older, brick and mortar, traditional businesses. However, we rarely hear of silos in pure play organizations and start ups, so does that mean that these younger organizations do not have the same problems of silos and broken down collaboration?

I’ve recently had a situation with MADE.COM, a growing, UK-based, pure play e-tailer specialized in selling furniture online. They basically have an online catalogue from various furniture designers; customers browse the catalogue, they can even check out a selection of furniture items at one of their showrooms, then they place their order online, with the promise of an easy delivery a few weeks later.

Simple and easy, yes? Well, not really. In fact, it all sounded great and dandy until I hit the “buy” button and I got my confirmation email. Up to that point, I was very impressed with the shopping experience, the simple website design, detailed product information (including dimensions and layout options), and clear (or what I thought to be clear) information that was presented. It seemed that they have thought through the customer experience to a tee, which was quite refreshing and instilled a sense of trust in the brand.

However, once I got the confirmation email, I learned that the order delivery was going to be the most problematic. I had purchased 4 different items all in one order, I paid for them all in one transaction, I received one email confirming my purchase, however I was finally informed AFTER I had paid that the 4 items will have 4 different delivery dates spanning 1 to 8 weeks!

What ensued over the following weeks was nothing short of a nightmare, which I also discussed within my network and started hearing of similar stories with other brands. My focus in this post will be to highlight the key breakdown areas that we have experienced and the lessons that all businesses should learn from.

 

Incomplete, Inconsistent and Inaccurate Customer Communication

  • The order delivery information presented on the website was very basic and did not provide enough detail to clearly outline that each item is to be delivered separately.
  • While the post purchase confirmation email offered a hint of what to expect, it still did not provide enough clarity on the specific delivery process. It’s only when the 3rd post purchase email arrived, announcing the delivery of the first item, that I learned I could have items held with MADE.COM so they deliver all items together.
  • And still… this email communication was not clear on the fact that, even when items are to be delivered on the same day, they will be delivered by different companies at different times, which I, the customer, have to schedule separately.

It took various conversations, tweets, direct messages and emails with the MADE.COM Social media team and the customer support team to get full clarity on how the items will be delivered and to get all 4 of them delivered on the same day (albeit at different times), a very frustrating process.

 

Basic Customer Expectations are not met

The entire model that the MADE.COM business relies on is no stocking of inventory, and making the items only once they have been ordered. This is great to manage cost, be efficient and provide designer furniture at affordable prices. Still, they should also think about what that means to the customer, and help them manage the process from their end.

Basically, given that the order is broken down by item, and that these items are shipped at different times once manufacturing is completed, this creates a problem for the customer: for me, it was scheduling the delivery of 4 different items (that are supposed to be used as one set) at 4 different times, while also scheduling the disposal of the 4 old items as I did not have the space to keep both the old ones and the new ones as they were being delivered. This took a lot of time and effort from my end, in the run up to the busy Christmas holiday, leaving me with a sense of frustration with the brand as they have not been upfront with their delivery process. I did expect what I consider a standard experience, whereby I get all items in one order, in one delivery, which is scheduled in advance, allowing me to also dispose of the old furniture in one go.

But that was not the case. While MADE.COM continued to manage the flow of emails informing me of products being dispatched, they left the coordination of product delivery to various partners, that were selected based on the size of item delivered. There was no system integration between those partners, and it seemed MADE.COM had very little influence on the process, leaving the customer to struggle with coordinating the process themselves, with partners that showed below standard customer care.

 

Lack of System Integration between MADE.COM and their Delivery Partners

What I uncovered during this process was quite surprising: when I called the delivery company asking that the item be held until ALL items in my order were ready for delivery (as instructed in the order delivery email from MADE.COM), I started getting each morning at 7:00am both a text message and an email reminding me to PICK UP the item from the delivery company’s depot. It took several emails, calls and tweets with various teams at MADE.COM to get a confirmation that, due to system inconsistency between MADE.COM and their delivery partners, holding the item for delivery with all the other pieces in the order, is flagged as being held for pick up. To make things worse, they could not stop the daily text and email reminders, and had to get IT involved to stop them.

This raises a very important question: why is it that a relatively young, pure play business is relying on systems that seem from a bygone era, and that are not connected with each other? While smaller companies may not have the resources to have their own distribution networks and have to rely on partners for product delivery, in an age where system integration is a given, MADE.COM should have ensured full integration with their delivery partners’ system to provide customers with clear updates on their order status no matter which partner in the delivery chain they talked to.

One may wonder though whether the delivery partners’ systems are at fault, in which case MADE.COM should have shopped around harder to find one able to deliver a 21st century digital era experience. An experience where they automatically coordinate the end to end order delivery for their customers, instead of expecting the customer to have to coordinate it with the various partners.

 

Policy Miscommunication

Compliance is a topic that is becoming more mainstream within the marketing ecosystem, as companies devise policies to manage pretty much every aspect of customer interactions. This is a massive endeavour for a company of any size, especially if these policies have to include customer interactions with external partners and vendors.

In the MADE.COM case, the delivery information on their site clearly stated that all items will be delivered to my door, and that the larger ones will be opened up and assembled by the delivery staff. Reality was quite different as each delivery partner had their own policies: for the medium items, they were dropped off on the ground floor and I had to struggle to get them up to the 3rd floor; and for the larger items, it turns out that they do not assemble pieces that require a screw driver.

But the policy issue was not only from a delivery standpoint. We all know how important it is to have a customer list that the brand can remarket to. Having worked in email marketing since 2000 and having been involved in developing email marketing software with features that help a brand be compliant, it still amazes me how brands automatically add your details to a marketing list, simply because you purchased a product from them; they do so without even informing you of what they are doing, and without giving you the option to opt-out. The worst in this case is that they added my contact details to both the email list and the direct mail list, and they did not offer a simple way to unsubscribe. I had to make 2 separate requests to be removed from all marketing lists.

I would expect such difficulties from a traditional business that is struggling to move to the digital era, in an organization riddled with silos, and where the digital team may be setting up processes and business practices without necessarily involving the right stakeholder. For a pure play business that should have covered all such data protection policies pro-actively, this was quite shocking.

 

Customer Support

Last but not least, the experience with customer support was what you would expect. There was quite a bit of push back and several interactions to solve an issue through the call centre and, to an extent, through email. The Social Media team however was much quicker to solve problems, probably because they were conscious of the impact bad publicity would have. This is another avenue where silos are running deep, and where it is essential to bring all these customer care resources to operate in a similar fashion and to help customers address issues promptly and satisfactorily.

 

Silos are a reality of any business: traditional, pure play or start ups

While pure play businesses like Google, Amazon and eBay seem to have the right structure in place and an environment that thrives on collaboration across a tightly integrated organization, not all pure play businesses are like that.

Many pure play and start up businesses may have been developed based on a great idea to take advantage of the opportunity that digital provided however they have been built by well intentioned teams whose experience is more driven by brick and mortar practices. Instead of introducing customer-centric ways for operating the business, they seem to have carried with them the same practices they have used with their old employers, thus creating silos that run deep in the organization and that could turn them into unprofitable businesses.

 

What can these businesses do to create a more integrated organization and to drive a seamless cross-channel customer experience?

Here are some basic best practices that businesses can apply, both internally and across their customer interactions:

  1. Put the customer at the centre and design a customer experience that incorporates all steps in the product purchase through to delivery, including full awareness across the organization (core business and partners) into how to manage customer expectations at every touchpoint in that journey.
  1. Provide customers with full clarity on what experience to expect during the journey. This information has to be presented in it entirety at all touchpoints and not in bits and pieces, like a drip, desperately trying to delay the inconvenient truth from being communicated to the customer.
  1. Establish a content hub where all content provided to customers, including delivery information, policies and other fine detail, is stored in one central location and accessed by the brand and their partners for use in all communications and management of support inquiries. This ensures consistency of information across touchpoints and channels.
  1. Develop and implement an integrated operating model that all departments, stakeholders, and partners are part of, bridging the gap between people, process and technology, to ultimately deliver a seamless customer experience.
  1. Ensure full integration with partners involved in delivering the customer experience, by bringing them into the operating model, and ensuring full system integration with automated real time updates to minimize customer disappointment.
  1. Align policies with partners and vendors that are interfacing with a brand’s customers. Regardless of the company size, and even though it may require a sizeable budget, getting your legal counsel involved is a wise investment to ensure consistency in policies and how these are communicated.
  1. Provide consistent customer support across all support channels, and not only in social media. The call centre and email / online support teams must catch up quickly and deliver to the same standard as the social medial channels.

By following these basic best practices, brands can remain competitive and provide their customers with the best experience they can.

Thank you for reading; please do share your experiences with start up and pure play brands, both that have silos deep in their organizations, and those that have applied best practices that make them stand out as great brands.

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February 2, 2016 by Adele Ghantous

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