Multichannel Marketing: Channibalism?

  |  May 15, 2003   |  Comments

Fear one channel will steal business from another? You may be a channibalism victim.

Next week, ClickZ is hosting its second annual E-Mail Strategies conference in New York. At last year's event, I talked about how email itself is only a small part of the email marketing landscape. This year, the folks at ClickZ said I could broaden my topic a bit. So I'm excited that, this year, I'll discuss multichannel marketing and where email fits into such a marketing strategy. As an accompaniment to the talk, today's column will present one of the "golden rules" of multichannel marketing. (If you're at the conference in New York, please stop and say hi!)

What Is Channibalism?

"Channibalism" is a basic fear felt by many executives and managers that one channel, or line of business, will steal business away from another. There are two facets to this fear: one tied to fears of consumer confusion and loyalty and one tied to managerial salary structures. The way a company organizes itself is way, way out of the scope of this column, but I'll touch on it while talking about the first fear: customer confusion and loyalty.

Customer Loyalty Over Multiple Channels: Channels as Products

Users who interact with your company over multiple channels are more loyal than single-channel customers. To be a multichannel company, you first need to provide users with the channels to use. Then, you must encourage users to use two or more channels. You'll find over time your most loyal users are those who use at least two channels. Think about the types of users who use each channel and what channel combinations would be natural for them.

The next step is to think about your channels as if they were products. Apply the same marketing techniques you'd use to sell products, including acquisition, retention, and share of wallet. When you use these techniques on channels, they assume the higher purpose of making users more loyal by encouraging customer interaction over multiple channels.

Channel Acquisition

How do you reinvent traditional marketing techniques to work for channel marketing? It's easier than you think. I'll talk about channel acquisition strategies now and leave retention and share for another column.

To create a channel acquisition strategy, use the same scoring techniques you currently use to figure out which customers would be most likely to buy a new product you market. Score them according to their most likely "next channel." Once you've identified these new "channel-ready" segments, use your marketing knowledge to sell the channel as if it were a product.

It's critical to think about these campaigns' goals as encouraging people to add channels, not to migrate to a different channel. The point is not to replace a user's preferred channel but to convert that single-channel user into a multichannel user. If you execute these campaigns successfully, you'll alert people like me to your new wireless channel and avoid sending my grandmother a note about your new Web site. She doesn't know what the Internet is and doesn't own a computer.

Similarly, understand what channels (and channel combinations) a user currently uses. The last thing you want to do is introduce a user to a channel that's less cost effective. Actually, the last thing you want to do is create a channel that's less cost effective than existing ones. Still, the climate sometimes calls for loss-leader channels that reach a new audience and will pay off in the future.

Thinking Like a Multichannel Company

Customers won't think of your company as multichannel if you don't. If your channels are siloed, you're not acting like a multichannel company. If your channels don't converge into a unified user experience; unified functionality; and a unified voice, look, and feel, you're not acting like a multichannel company. You are instead acting like a consortium of single-channel companies.

A multichannel company must rethink how it compensates employees. One of my clients is a bank in England. The company is beginning to create a multichannel strategy but has a (common) problem: The sales staff is not empowered over multiple channels. A sale is attributed only to one salesperson. If a user learns of a mortgage through channel X, conducts more research on channel Y, and talks to the broker on channel Z to make the sale, only the last sales person will get a commission, regardless of how much time other sales staff spent helping that user through the cycle.

In this respect, that company is organized and compensated in a way that encourages competition between channels. This kind of company can never put on a multichannel "face" for its customers because its people don't believe in it. They fear it. Salespeople should be user-centric and not care which channel the customer uses. This means all salespeople need to be aligned by customer segments they can handle, not by the channels to which they're assigned. That way, salespeople are empowered to handle customers over multiple channels.

Multichannel: A Way of Life, Not a Buzzword

Unless your company actually believes in a multichannel customer experience and internally structures itself this way, a multichannel campaign will fail.

This is only the begining of a larger discussion on multichannel marketing. Watch for more columns on this topic in the future.

Until next time...

Jack

Meet Jack at ClickZ E-Mail Strategies in New York City on May 19 and 20.

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ABOUT THE AUTHOR

Jack Aaronson

Jack Aaronson, CEO of The Aaronson Group and corporate lecturer, is a sought-after expert on enhanced user experiences, customer conversion, retention, and loyalty. If only a small percentage of people who arrive at your home page transact with your company (and even fewer return to transact again), Jack and his company can help. He also publishes a newsletter about multichannel marketing, personalization, user experience, and other related issues. He has keynoted most major marketing conferences around the world and regularly speaks at Shop.org and other major industry shows. You can learn more about Jack through his LinkedIn profile.

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