A three-step program to help consumers make their own way across your sales channels.
We've looked previously at ways to understand multichannel user behavior and about Web-to-store and store-to-Web analysis. Today, we'll step back and look more generally at the methodology needed to really understand multichannel behavior. I call it "embrace it, then trace it."
To understand the philosophy, I'll use a folklore tale of an architect. (I believe the story is true; if you know the source, please tell me.) According to the story, an architect was hired to design a college campus. He put up the buildings but created no sidewalks. When the head of the school asked him where the sidewalks were, he replied, "The students will create the sidewalks." Sure enough, a year later the architect visited the school and built paved sidewalks where the students had created well-worn paths in the grass.
I love the images and inspiration this story conjures. It's truly customer-centric (needs-based) design. We can learn from this story as we create a methodology for modeling multichannel behavior. You're most likely aware of how your users act within a channel. You know how to create the best brick-and-mortar experience, catalog, Web site, kiosk, call center, sales office, Web 2.0 widget, and the like. In the story of the architect, these channels are the buildings. They run fairly well on their own. But how do users move between them? What paths do they create? And, most important, how can we analyze the paths' success and value?
Here are the three steps to the "embrace it, then trace it" methodology:
Embracing multichannel behavior is like paving the sidewalks between the buildings. First, you must spend time watching user behavior. Then you can understand what pathways the users are creating. Some pathways we've seen created in the last few years include:
While we have seen these behaviors before, your users might be creating paths unique to your industry or unique to their needs.
The problem is most companies don't know how to track this behavior. That's because there are no pathways that make this behavior traceable. Once you understand what these paths are (or at least some of them), it's time to pave the sidewalks. Create functionality that not only enables the behavior but also makes it easy for the user to take these paths.
I've given store/Web examples in previously. In a nutshell, here are some ways people create pathways between channels:
All of these ideas create paths and encourage the behavior by making it simpler.
You can't track behavior and understand its value until you enable it. Once the sidewalks are paved, it's time to track who's using which ones. Analytic packages like Coremetrics and Omniture are making great strides in multichannel analytics. With integrated point of sale systems, online and Web 2.0 metrics, and the like, work with vendors to install tracking systems on each pathway. Once the analytics are in place, you can understand the value of not only each path but channel permutations. In other words, what type of multichannel user is more profitable? Those who use channels X and Y, or those who use channels Y and Z? What about those who use X, Y, and Z together?
The last piece of the puzzle has to do with credit. Who gets credit for a sale that starts on the Web and finishes in the store? Does the catalog get credit for a purchase that began there? Business rules must be put in place to assign value to the paths. Not only does the value have a path, it's split between the path's endpoints. Perhaps a path from the catalog to the store is credited X percent to the catalog and Y percent to the store for the first purchase. Subsequent online purchases by the same customer might be attributed differently. The catalog was responsible for the beginning of the relationship and should be credited to some degree for subsequent purchases, up to a certain amount.
Each business is different, so this is the most vague and mystical part of the process. An accounting structure must be put in place that all channels agree upon. That will encourage multichannel users, which is what we want. By splitting the credit for each path and letting each channel retain some percentage after the first sale, the fear of channibalism is lessoned.
People fear what they can't control or understand. A lot of the concern around the multichannel user experience is simply that companies haven't figured out how to capture the data. Once the data is captured, it's a matter of creating business rules to understand credit and value.
The first step is understanding the paths people are taking between your buildings and why. Once you create the sidewalks that let them do this easily, everything else will follow suit. The technology exists to track these sidewalks, attribute value to them, and credit the channels appropriately.
Questions, thoughts, comments? Let me know.
Until next time...
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