Saturday, November 24, 2007

Multi-Channel Marketing: A Single View of the Company

Five years old, but still relevant

Reprint from The Catalog Council Newsletter, 2002
Multi-Channel Marketing: Giving Customers A Single View Of The Company:
By Carolyn Gould and Kirk Kirkpatrick

The trade press abounds with statistics citing the value of multi-channel customers-those cherished souls whose loyalty to your company extends from store, to catalog, to Web. Or maybe just catalog to Web. Studies have shown these customers can be up to twice as valuable as single channel customers.

A Jupiter Research study done in March, however, maintains that multi-channel buyers are not what they are cracked up to be, indicating that only 10 percent of the 52 percent of U.S. consumers surveyed who have internet connections "have conducted online transactions across multiple channels through the same marketer."
The problem may lie, we believe, in what constitutes multi-channel behavior. If a catalog drives a buyer to your Web site, where a purchase is made, is that customer a multi-channel customer? An April 2002 study by indicates that 68 percent of all online customers who receive a catalog first shopped the catalog, then bought online.
Customers do not differentiate your brand by channel. You're the same company in print, on television, on the Web, on the phone, or in the store. Given the perceived value of these customers, why, then, is it that so many companies seem to be doing their level best to frustrate one of their most valuable assets-the multi-channel browsers and buyers-by not giving them a single view of the company?

Here are ten obstacles-presented David Letterman-style-that we believe may be preventing you from maximizing your multi-channel opportunities:
10. Overlooking obvious, low-tech solutions. You really don't need a CRM application to recognize and reward multi-channel customers. Just segment them by channel, analyze their behavior against single channel customers and start recognizing their value by treating them differently.

9. "Building" your brand at the expense of serving your customers efficiently in whatever channel they choose to shop or communicate with you. On the Web, sophisticated graphics can help build your brand but may stand in the way of communicating and selling effectively. You need to recognize that each channel has its own limitations and advantages. Trying to make the Web, for example, look exactly like your catalog may result in spending more money on design rather than making sales on product.

8. Not using your catalog/retail merchandising expertise and knowledge on the Web. Copy, merchandising and check out (or shopping cart) are three areas where many catalogers have consistently neglected to use their direct marketing expertise to close sales. Over the past six months, some improvements have been made, but just take a look at many Web sites to see that this is true. Many still present product lists in product categories, with little regard to merchandising the offers. Would you do that in your catalog? One exception among a few is Newport News, which was cited in July as one of the Top 25 Online Retailers by comScore Networks. Its success, as indicated by George Ittner, the company's chief executive, is due mostly to presenting fashion by themes and lifestyle trends, not strictly by product categories, which it also includes on the site.

7. Not empowering your CSRs or Sales Associates to make decisions affecting the customer, such as honoring the lowest price regardless of channel, and not giving them access to your Web site. Here is one place where customers can get angry fast. If a customer has seen a blouse on sale in the store, but doesn't have time to shop for it (probably because there are no sales associates available during her lunch hour), then why drive her crazy when she sees the product at full price at home on the Web? What do you do, when she calls up to find out why? Does your CSR automatically give her the lower price? She deserves it. After all, she cared enough about you to check out that blouse in three channels, even though she has yet to make a purchase.

6. Putting customers in "buckets" and not following up across channels to help build loyalty. All catalog customers are multi-channel customers. They, however, may not be your multi-channel customers. Obviously, everyone shops in a store, but maybe not in your store. Maybe they shop in your competitor's store or from their catalog and buy from you via the Web? Or perhaps, they buy only clothing from your Web site, but buy shoes from your store? Perhaps they might add a new channel if given the right offer?

Understanding customer behavior drives sales. There are an increasing number of new data products available that allow you to analyze customer behavior across channels, across product lines, across different types of businesses, and against direct competitors.
After all, there's only so much discretionary income available for all offers. What are you doing to maximize the possibility that your customers will continue to spend with you? What are you doing to ensure that prospects will find your offer compelling enough to change their established buying patterns?

5. Inadequately tracking customers across channels-and then cutting catalog circulation or Web spending based on "inadequate" information. Most tracking problems seem to stem from channel marketers believing that they "own" customers who shop from their channel - a Web customer, a catalog customer or a retail customer. We saw this turf war before when catalogers first went into retail in the eighties. Now we're seeing it again. Most turf wars stem from inadequate research-silo-ing the customer as it were-and from the Web and retails channels not wanting to bear some of the high cost of the catalog or the Web site. This practice, we believe, has to stop.

4. Not taking full advantage of the synergistic customer-focused opportunities that multi-channel marketing affords-such as catalog quick order on the Web site. Catalogers have made improvements here over the past several months, but more opportunities await than catalog quick order and putting your URL on your catalog or on in-store signage. Why not thank your customer via e-mail for their order placed by catalog? Shipping confirmations are yet another opportunity to communicate. Don't make them look like an order form. Why not upsell by embedding a product locator for a complementary product in the thank you message? Why not use the shipping confirmation for a quick survey or a coupon?

3. Letting your "techies" or systems drive the customer - and business - experience. Your customer - unless you're selling high tech products to engineers - probably does not approach shopping like your "techies" do. So, why do you let them design the customer interface? Your catalog savvy can match any usability study anytime. Having said that, however, conducting usability studies can expand your knowledge about how your customers and prospects maneuver through your Web site. It's an invaluable experience.

2. Not aligning your policies across all channels to present a cohesive view of your company; for example, not allowing your customers to purchase and/or return across all channels. We know from years of experience selling in both the retail and catalog environments that certain types of merchandise sell better in one channel than another. Retail presents an assortment; catalogs and the Internet are item-driven. You might promote these products differently in each channel - showcasing item-driven products on the Web and in the catalog - but you should, at least, give customers access to your entire inventory somewhere. Put your Web site and your catalog in the store. Backlist your store's inventory on the Web. Or, at least, tell them where they can make an in-store retail purchase conveniently. And if you have a lot of stores, like Sears or Circuit City, why not offer delivery from the retail store for orders placed by phone or Web?

1. Organizing in silos, which can result in losing the focus on your customer. The number-one challenge facing multi-channel retailers, we believe, is organizational. Organizing in silos hampers communication, creates turf wars over customers and dollars, and puts products over customers. Customer-centric marketing or CRM applications are not possible when the customer is being divided up. If you have separate retail, catalog, and Internet divisions, at least form a customer-focused task force that works to ensure that products, policy, pricing and brand remain consistent across all channels. Your aim should be not just to achieve a single view of the customer, but also to present to that customer a single view of the company.
This article is adapted from a presentation given at the Annual Catalog and Multi-Channel Marketing Conference Spring 2002.