October 15, 2006

Who Drives A Multichannel Strategy?

Last week's parable of multichannel marketing wrankled many of you. Good!

It is important to consider who is telling you that you must be "multichannel". Is your customer telling you what they want to see, or are vendors who provide solutions telling you how you should implement "multichannel" strategies?

The latter can be troubling. There are many vendors who genuinely want to do what is best for your business. There are other vendors that want you to purchase expensive products, services and solutions that provide multichannel functionality, including:
  • Integrating inventory systems across all channels.
  • Same product available in all channels at the same price.
  • Integrated advertising/marketing across all channels, advertising/marketing with the same look and feel.
  • Integrating ROI measurement across all channels.
  • Vendors providing services from evolving industries like compiled lists, paper, television, magazines and newspaper, who want to maintain market share.
Frequently, vendors use phrases like "multichannel customers spend 'x' times more than single-channel customers", or "your customers demand to purchase what they want, where they want", or "Circuit City does a great job of allowing buy-online and pickup in stores". Quotes from Forrester Research or McKinsey about customer behavior are included as ways to justify the tools they are selling.

I am not saying that we shouldn't implement any/all multichannel strategies.

We should, however, pay close attention to what our customers really want, and how much it costs to serve our customers. We shouldn't do something because a vendor tells us that our customers demand it, or because a research company who makes money via consulting or the sale of research reports weaves a compelling story.

Look at all of the multichannel marketing opportunities that exist, then pick and choose the things your customer demands, or pick strategies you perceive your customers will demand but aren't educated about yet. Base your strategies around your business model and customer interests, not around a pundit telling you what you should do. All too often, the latter is happening. I perceive there are too few success stories to justify what we are hearing.

Lastly, think for a few moments about your experiences as a customer. On an annual basis, how often would you truly order an item online, then invest the time to drive twenty miles to a store, and pick up the merchandise? Would you do that with an $1,800 television? Would you do that with a $19 t-shirt? How often do you truly watch a television commercial, then see the same brand advertise with a catalog, then advertise via e-mail, then maintain the look-and-feel on the website, and say "wow, that's great integrated marketing, I'm getting in the car to go to the store to buy that product?" We need to do a better job of thinking like the customers we are when we aren't at work.

Lastly, we need to understand customer behavior before doing the next "flavor of the week" multichannel strategy. Circuit City customers might see the website as a compliment to the retail channel. The Territory Ahead might see the website and stores as a compliment of their catalog channel. Knowing how customers migrate across channels, and are retained by channel, determine what the appropriate multichannel strategy is. We spend too much time on the tactics, and not enough time understanding the customer behavior that drives the tactics.

These are the reasons why the parable was written.

Ok, time for your opinion. I want to hear it. We should all be able to agree with points, and disagree with other comments, and be able to share our thoughts here.

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