Multichannel Marketing

What is Multi-Channel Marketing?

Multi-Channel Marketing on the Internet is achieved by utilizing at least two “sales channels,” also referred to as touch-points, across the World Wide Web. As with Internet marketing basics, so too with Multi-Channel marketing, our experts will share their knowledge for free. This article includes an explanation of multi-channel marketing along with anecdotes, as well as the key points to creating a multi-channel marketing approach.

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This may not be brain surgery, but by adding more Sales Channels in an effective manner you will increase sales.

Multi-Channel Marketing is the single most important topic relating to increasing sales for any business. It may sound obvious, but it is so true, by adding more sales channels in an effective manner you will increase your sales. This may not be brain surgery, yet it requires a keen understanding of marketing across multiple channels as well as how to correlate these channels into a cohesive and comprehensive effort to maximize your online profitability.

Research Regarding Multi-Channel Marketing

Multi-Channel marketing on the Internet began in earnest in the late 1990’s through the early 2000’s, with much emphasis on this approach within certain circles starting around 2002 as the results of various studies became published. For instance, Double Click’s 2002 holiday shopping survey of 1,000 retailers reported that multi-channel shoppers spent 39 percent more (on average) than single-channel buyers, and more than half of the multi-channel buyers utilized catalog or e-mail promotional codes when they shopped online. The point was becoming clear as far back as 2002 that by using multiple sales channels, retailers could increase their sales by 39% per customer. Multiple touch points drove the marketing message home to these customers.

That same year an online retail study from Shop.org and the Boston Consulting Group also indicated that Multi-channel retailers were experiencing solid growth with lower customer acquisition costs. The data was coming in to prove what a few intuitive online marketers had already anticipated and pushed their companies into, being a multi-channel marketing approach. The push for utilizing multiple sales channels across the Internet proved itself by decreasing costs and increasing profits for many online retailers. Multi-channel retailers grew 44 percent in 2002 alone. In addition, the cost to acquire customers for these multi-channel retailers fell 64 percent from 1999 to 2001.

Over the past several years since 2002 the multi-channel method has continued, expanded, and matured. Yet many businesses still have no notion of what this approach truly means and how to best use it. The reason for not using this method is most likely because what seems so obvious and simple to the experienced Internet marketer may seem very convoluted and even overwhelming to the uninitiated. Let’s look at some multiple channel marketing basics with a few simple anecdotes, after first reviewing more recent statistics.

According to JupiterResearch in 2006, retail customers purchasing from a store by utilizing multiple sales channels to arrive at that store will spend an average 14 percent more per year than those using just a single channel. McKinsey & Company have published recent studies showing that among retail banks, multi-channel customers are 25 to 50 percent more profitable than their single-channel counterparts.

However, the JupiterResearch study also concluded that multi-channel customers are 26 percent more likely to claim that store coupons were the deciding factor for their continued patronage at a specific online retailer. The indication here is the increasing need to advertise across multiple sales channels to draw the customers in, while also providing cash incentives to get the customers to purchase. The “coupon game” for most successful online retailers began many years ago by using coupon websites and email marketing messages to provide weekly specials.

The large successful eRetailers know that they may need to utilize a Pay-Per-Click ad on Google (being one channel) to get the potential customer onto their targeted landing page, but then to generate an order from this customer they may need to sweeten the deal via another channel such as email marketing. These successful online retailers recognize that they need to provide multiple touch points (being these sales channels) along the way, because if the first channel does not generate an order then the second or even the third channel has an increasing chance of doing so.

There are tricks to getting the potential customer to actually spend their money with your company even from the first touch point, such as the Chase Cap & Trap method that this author promotes. However this specific methodology won’t be included here in this article as it is beyond the intended scope. Keep reading our articles though, as there is much more to come in the next few weeks and months along these lines (including the Chase Cap & Trap method).

The Key Elements of Multi-Channel Marketing

Here are a few key points to ponder regarding the Multi-Channel marketing approach:

Customer Preference or Propensity. Does your customer prefer to shop via a catalog (being printed media and a call center), online (being done over the Internet), or in-person (at a brick & mortar establishment)? For many reading this, online is the only method within the scope of what you are considering right now, and that is ok. However, within the realm of online shopping there are multiple sales channels that need to be considered. (See below for a list of the various online marketing sales channels.)

Consistency. If your company is already using, or plans to utilize a direct marketing approach such as traditional print media, broadcast media, and/or Internet advertising, then you should plan for consistency across these multiple sales channels. By using a similar design or layout including the use of the same colors and fonts, by using a specific slogan or motto, as well as having a consistent product description the customer will recognize the uniformity. This consistent or uniform imagery and message will create a feeling of trust and comfort. Humans are comfortable with what they know, so you need to compose a consistent feel, look, and message in order for the potential customers to recognize it. This is a facet of branding.

Repetition. Repetition is a vital component of an effective multi-channel marketing campaign. The purpose of repetition is to generate top-of-mind awareness regarding your marketing message. Some feel that this may cause an undue annoyance with potential consumers, but this is not generally true, as in our modern world we are marketed to no less than 247 times per day and some say as high as 600 times per day. The point is, with so many marketing messages bombarding your potential customers, it is important to have your message repeated to a targeted audience of interested individuals.

[For a concise listing of various related statistics in regard to how many times we are “marketed to per day” see this entry on Yahoo Answers – http://answers.yahoo.com/question/index?qid=20090523155508AAd3zfr]

Measurement / Statistics. You need to know what sales channels or touch-points will effectively drive home or deliver your marketing message and thus generate orders. The only way to know for sure which online sales channels are working and which channels are not performing as desired, is to have a good online website statistics package installed (also known as web analytics).

Many businesses start out by using Google Analytics, which is a free SaaS service provided by Google.com (http://www.google.com/analytics/). Though AWStats is also a popular free open-source statistics package that can be installed on just about any website (http://awstats.sourceforge.net/). However, larger corporations either grow into, or decide it is in their best interest to use the services of one of the large online statistic companies such as Omniture or CoreMetrics. These large web analytics companies are costly, but can provide some very interesting and actionable information from your website’s usage statistics (though some argue that Google Analytics can provide all the same capability for free, especially when used in conjunction with Google’s Webmaster Tools – http://www.google.com/webmasters/).

Online Marketing Sales Channels

Online sales channel marketing includes:

Email or e-newsletter marketing (opt-in email marketing is the only way to go, as well as being legally required)

Search engine organic or natural marketing (known as SEO, is considered being “well listed” or “highly ranked” within the major search engines)
Search engine sponsored results marketing (referred to as SEM, includes Pay-Per-Click ads known as PPC, though referred to as Cost Per Click or CPC by Google and others)

Comparison shopping engine marketing (abbreviated as CSE which is sometimes referred to as shopping comparison sites or SCS, this includes websites that aggregate many online stores’ products so that consumers can sort by the best price)

Affiliate marketing (usually done on a Cost Per Acquisition or CPA basis, which is also referred to as Cost Per Sale or CPS, this is a revenue-sharing model in which other business people market your products and services for a cut of the profits)

Content marketing (being a targeted approach that is seen on websites using Google’s AdSense, this is also called context-sensitive advertising)
Plus there are other online sales channels such as the newly evolving mobile marketing channel

Additionally, due to effective branding, there can also be a large number of “direct-traffic” customers, being customers who know your website’s URL, also known as the domain name, and thus they come directly to your website without going through one of these listed channels (albeit though these other online channels most likely influenced the direct traffic visit)

Don’t Miss the Point of Multi-Channel Marketing, which is the Lifetime Value of the Customer

Many companies are missing the point of a comprehensive and cohesive multi-channel campaign by using a “multiple channel” approach, but yet keeping each channel in a separate silo so to speak. This would involve adding a sales channel like a website, yet operating it completely independent of the other marketing efforts or channels. As it is said, “the left hand doesn’t know what the right hand is doing,” and this will decrease the effectiveness of a multi-channel approach.

To reap all the benefits of multi-channel marketing, you must fully integrate all the sales channels within your company so that each touch-point or component supports one another. To dramatically increase overall conversion rates and thus your bottom-line, you must create a consistent message and image to the potential customer.

The lifetime value of a customer must be the preeminent thought when approaching marketing from this multi-channel view. Each touch-point has its associated costs, but the total sum of all the touch-points that generate a loyal, lifetime customer must be recognized and valued.

One channel or touch-point might have a low conversion rate. However, that low converting channel may have been a necessary touch-point, or the push, that your potential customer required when they finally decided to make the purchase from your company. However, they may have arrived to make the purchase later that day by coming from a different sales channel. All the channels must work together for the outcome of items being purchased from your company.

Think of the multiple sales channels as legs of a table, atop which are your items to be purchased.

Think of the multiple sales channels as legs of a table, atop which are your item(s) to be purchased. Each leg is somewhat independent, yet each has a consistent look and all four legs are required to support the tabletop. This does not mean you specifically need four sales channels, but rather this is an anecdote for the multi-channel mindset.

An Example of Multiple Channels Working Together

An example would be a customer who searches for a special widget online, say using Google.com. This potential customer finds your website organically listed on the first page and clicks through to view your widget, which exactly matches their need. They have their first impression of your marketing message coming through this product’s display page.

However, being the savvy Internet shopper that they are, this potential customer proceeds to click back to the search engine and decides to go to Microsoft’s new “decision engine” known as Bing. They search for the same phrase or maybe a slightly different wording and they notice your company’s PPC ad in the sponsored results area on Bing.com. This potential customer clicks through and arrives at your landing page, which is a little different than the product page that they first visited via Google. However, the colors and the feel of this landing page appear similar to your product page that they already visited, thus creating a sense of trust because this is something that they recognize.

Nevertheless, this customer wants to know if your widget is priced competitively, so they go to the comparison shopping engine NexTag.com and again enter the search phrase for a third time. NexTag brings up your product, and even though it is listed toward the bottom of the page, the consumer notices again the same phrasing in the title and description of the product. Thus again due to the consistent message causing a recognition by the consumer, as well as the price being somewhat similar to the other widgets listed (within an acceptable margin), the potential customer clicks through and then becomes an actual customer.

This same thing may hold true for an existing customer who is shopping around. By seeing your website and your product coming up again and again within multiple channels, they believe your product to be good and decide to stay with you. Email or Newsletter marketing can also increase the likelihood of customer loyalty by creating a sense of personalization and constant contact.

Simply stated, multiple channel marketing works. In fact, without multi-channel marketing you are at a deficit because many of your competitors are already using this approach (or soon will be using it). This is not a new approach to marketing, but rather this technique has been around on the Internet since the mid-1990’s. It has become fairly complex at this time, but we hope it is now understandable even to the point of actionable with your reading of this article.

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