marketing.

Integrating Your Multi-Channel Marketing Approach

As marketers, it is vital to utilize all of the paths to the customer to get the word out about your products and services. Today, it is easier than ever to reach the customer due to the “connectedness” of both businesses and consumers. There are a myriad of channel options available to us, from traditional print and broadcast media, to direct marketing, to e-marketing, to event marketing—our choices are endless.

The challenge, then, is fourfold:

1. Find the right balance of communication

2. Identify the way in which your customers want to be contacted

3. Ensure that all of your messages are efficiently tied together to create the strongest impression of your company

4. Maximize your investment in each individual program.

The solution to this complex business challenge is to effectively build and deploy a Multi-Channel Integrated Marketing Strategy.

While the concept is straightforward, the execution can be tricky. Unfortunately, when a multi-channel marketing program isn’t well integrated, it’s very easy to upset your customers and your prospective customers. Some examples of a non-integrated approach:

• A loyal customer is presented with a less attractive offer than a brand new prospect (this happens quite frequently in the telecommunications industry). Now that customer is no longer so loyal…

• A customer happily purchases an item through a company’s retail channel, only to find the same product cheaper on their website. They now feel taken advantage of and question the product value.

• A prospect is presented with conflicting offers—one offer through the direct sales channel, another through an authorized retailer and one more through an e-mail marketing message (we see this a lot in electronics/computer retailing). The buyer is confused and suspicious. He definitely won’t make the purchase.

The above real-world examples clearly illustrate the importance of getting multi-channel marketing RIGHT. This White Paper provides practical advice and methodologies to help you successfully implement Multi-Channel Integrated Marketing.

Why is Multi-Channel Integrated Marketing so important?

The tide is turning away from product-centered marketing, mostly because product marketing is no longer effective. Multi-Channel Integrated Marketing is a customer-focused strategy that effectively assimilates and coordinates customer interaction across all of your company’s important customer touch points.

There are two key benefits:

1. Increased Overall Profitability

It’s key to integrate all of your marketing efforts in order to maximize the marketing investment. When done correctly, a multi-channel integrated marketing approach will reap more profits than the sum of the programs deployed alone. And, when you encourage your clients to conduct business with you across multiple channels, you are more than likely to get a larger share of their dollars for your product or service category. For those companies that have embraced this concept of multi-channel integrated marketing, the rewards have been improved marketing ROI and overall better bottom line results.

2. Increased Customer Retention

The old adage, “It’s cheaper to keep a customer than to get a new one” can also be applied to Multi-Channel marketing. Users who interact with your company over multiple channels are more loyal than single-channel customers. Obviously, in order to create this loyalty, you must first create the multiple channels for your customers to utilize. Think about what makes the most sense to your client base, and also to the products and services that you offer. Think about the types of users who are currently conducting business with you, the channels that they are currently using, and what the next most natural channel would be or the combination of channels that may be most compelling for each user group.

And, even if you do not create new channels, you probably already are using a variety of methods to communicate to your customers and prospects. Perhaps you have an outside sales-force that serves your largest customers. This sales channel is probably complemented with inside sales, essentially a group of ‘order takers’ who respond to requests and place orders. You may also advertise in targeted publications, or even implement national mass media campaigns. Depending on your business, you may drive traffic to retail locations or you offer other direct ways to buy from you. You most certainly have a website (one which may or may not be working as hard as it could). This is all good news! You have the infrastructure in place—now you just need to make it all work together.

Making it Work – Implementing a Multi-Channel Integrated Marketing Program

1. Understand the correct communications ‘path’. It’s critical to get the order and mix of your communications correct. For example, should you send a direct mail piece, followed up with a phone call? Should you also e-mail? And, how do you control for the other offers out there in print or on TV? In our experience, the only way to determine the best path for your particular offering is to test the various combinations until you’ve determined what’s most effective. It’s important to test each combination of communications vehicles available to you. Start with the basics—send a direct mail piece, followed up with an outbound phone call or an e-mail. See if the direct mail response rate improves with the addition of the second contact. It will take time (and considerable effort) to test all of the various combinations, but it will soon become apparent which communications mix works best for you.

Of course, responsiveness needs to be balanced with an understanding of costs. In other words, even if the most effective path is determined to be: “Mail catalog, follow-up with sales rep call, follow-up with another letter containing more info and then send an e-mail to close the deal”, this particular mix may be cost-prohibitive. If this is the case, you may want to identify a more streamlined approach that will net you with increased response and conversion rates at a more reasonable cost.

You need to continue to test communications combinations as the market changes, as your firm adds new sales or communications channels and as your offers/products evolve. This is an ongoing discipline that works best if it is constantly monitored. Look at your options creatively; look for opportunities to maximize your message and remember to implement an organized and disciplined tracking system.

2. Understand channel preferences. Our industry talks about this a lot—we all understand the concept that we need to speak to our clients and prospects through the channel they want to hear from us. Unfortunately, understanding the concept and making it a reality can be complex. How do you understand your customers’ communications preferences? There are some practical approaches.

To begin, you need to begin asking your customers how they’d prefer to hear from you. This needs to happen consistently—each and every time customer contact is made. If a customer visits a retail outlet, have the salesperson simply ask them how they’d like to be contacted with future offers. If appropriate, collect their e-mail address at that time. Likewise, if a customer calls in with a question or to place an order, make sure that the rep’s script always includes questions around how the customer would like to hear from you. And, once you’ve collected the info, make sure you use it! If a customer has told you that she prefers e-mail, add her to your monthly newsletter, and then, remember not to send her direct mail offers. This customer has told you that she likes e-mail. Listen to her and you’re more likely to improve overall satisfaction, build loyalty and get more sales.

The next approach is to learn from prior transactions. On a customer-level basis, perform analysis that shows how the individual customer has purchased from you in the past. If they tend to buy online (responding to your e-marketing efforts), perhaps you should increase the frequency of your e-mail contacts and decrease the frequency of other communications. You can learn a great deal, and market much more effectively, by simply taking a deep look into historical transactions.

A third way to build an understanding of channel preferences is to use statistical analysis to predict which channel an individual is likely to prefer. This approach works especially well in a prospecting environment, where you do not have the luxury to collect preferences or to use historical information to derive preferences. Employ data modeling techniques to predict how an individual would prefer to hear from your firm. For example, if you can isolate a group of customers that are highly direct mail responsive, you can build a model that identifies demographic traits of these customers. Apply the model to your outside list, and mail high-scoring names your direct mail piece. There are also off-the-shelf channel preference models that are available from the leading data compilers. If you don’t have the internal analytical resources, or if channel preference data is not available, the off-the-shelf models are a good alternate source of modeled channel preference data.

3. A Marketing Database is a key component: It goes without saying that the only way that you can employ a Multi-Channel Integrated Marketing approach is if you have the correct infrastructure in place. Effective Multi-Channel Integrated Marketing is based on an analytical, test-and-learn approach. You need to be able to retain and access data on an individual customer level. You also need access to historical transaction information and campaign and response history. This can only be accomplished if your firm has deployed a robust marketing database, one with high performance and usability.

4. Industry Best Practices: There are several best practices that your company can use to make your approach successful.

First, convince all of your channels to focus on company high value customers, not channel high value customers. Not only does this allow you to concentrate on your true high value customers with your integrated approach, it allows you to build on those valuable relationships and further solidify your customer relationship management strategy.

Next, take advantage of the fact that multi-channel marketing can allow you to tailor your marketing mix to achieve the best marketing return on investment. Test various communications messages and your media mix with different groups of your customers. Then measure the resulting lift (or lack thereof) in sales that can be derived directly by successfully matching the right customer with the right channels. If there is no lift, test again and tweak until you are able to identify the right mix for the specific customer group. This best practice solidifies your marketing strategy, increases your profits, and creates satisfied customers.

A third best practice is ensuring that you have a leading-edge customer data integration and marketing database management strategy. Many companies are surprised to see that once they are able to integrate their customer data, their customers are much more multi-channel oriented than they may have first suspected. In a recent study of a major retailer, it was found that customers were much more likely to buy more when the retailer communicated through three different channels (retail, catalog and Internet) as opposed to just two (catalog and Internet). In fact, twice as many customers made purchases when approached by the three channels, as opposed to just the two channels. Being able to recognize and track this behavior through effective data integration and marketing database methodology is a key component to understanding the benefit of your multi-channel strategy (for more on Data Integration best practices, please see our website: www.rrwconsulting.com).

Finally, the best practice of efficiently collecting your customer data leads to higher sales across all channels, as well as an improved customer experience. In this age of increasing concern around consumer privacy, the customer will be more likely to see the benefit of contributing their data to a company who uses that data to tailor solutions to them or create more value for them. Again, an emphasis on accurate, complete customer data is usually the cornerstone of a solid multi-channel marketing strategy.

Pitfalls to Avoid:

Despite the best efforts of a company to embrace a multi-channel integrated marketing strategy, there are some barriers to success that marketers must be aware of and on the lookout for. If any of these pitfalls rear their ugly heads, they can hurt the chances of creating a successful multi-channel marketing strategy.

• Siloed Structure: In order to take advantage of a true multi-channel integrated strategy, you need to ensure that your company is not acting or organized in a “siloed” structure. If your marketing channels do not illustrate a common theme or stratified message, the experience for the client will not come across as unified . . . thus, they will be less likely to react to your multi-channeled message. In other words, unless your company actually believes in a multi-channel customer experience and internally structures itself in a way that demonstrates this belief, your multi-channel campaign efforts will be doomed.

• Channel Cannibalization: Squelch the idea amongst your channels that channel cannibalization will occur by the other channels. This perception is a known killer of solid multi-channel strategies, and can cause channels to feel threatened by their counterparts in other channels, thereby not promoting a true multi-channel strategy. Advertise the positive results that occur when customers are approached by more than one channel, and the benefits to all channels (and to the company) that occur from this. Encourage channels to work together by incenting partnering behavior to avoid this pitfall.

Summary

Whether you are attempting to strengthen or grow your relationships with existing customers or soliciting business from new prospects, Multi-Channel Integrated Marketing needs to be a key part of your overall marketing strategy. The bottom line is this: those companies that create a single view of the customer through effective data integration techniques, and then utilize that insight to effectively interact with customers across both online and offline channels in a manner that is personal, relevant and timely will experience a tremendous advantage over their competitors. They will satisfy their customers, build customer profitability, and build ROI for their marketing efforts. The companies that don't embrace this methodology will find it difficult — if not impossible — to compete with those who do.

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