April 07, 2008

Micro-Channels

In an increasing number of Multichannel Forensics projects, the concept of micro-channels is becoming important.

Definition: A micro-channel is the combination of advertising channels and physical channels that are attributed to an order placed by a customer.

As you might surmise, most brands have a customer base using a diverse array of micro-channels. Micro-channels are ultimately driven by the customer, making them difficult to manage in a traditional marketing sense. Let's consider a series of micro-channels, for illustrative purposes:
  • Customer orders on a website using the key code from the back of the catalog.
  • Customer orders on a website after clicking on a paid search term. Customer received an e-mail campaign earlier that week, and received a catalog two weeks ago.
  • Customer visits website on Monday, then purchases merchandise in a store on Wednesday.
  • Customer sees a clearance item advertised on Twitter, visits website, purchases item.
  • Customer sees an item advertised on a popular apparel blog, visits website, purchases the item.
  • Customer receives a direct mail piece on Monday, visits website on Tuesday, buys merchandise in a store on Wednesday.
Our industry has an intense desire to parse mixed orders to the advertising channel responsible for generating the order. Once parsed, profit and loss statements are run for each advertising campaign within each advertising channel. This activity, while necessary, strips your database of a rich set of consumer behavior vital to the evolution of your brand.

My Multichannel Forensics projects suggest that micro-channels are highly predictive of future behavior, and help the brand go a long way toward determining when/if the customer should be advertised to.

Equally important is the concept of creating a micro-channel dashboard. In other words, rolling twelve month files can be created for each micro-channel. The dashboard illustrates the micro-channels that are growing, and shrinking.

In lieu of working with your favorite Multichannel Forensics expert, your matchback analytics vendor should be able to provide you with micro-channel reporting, especially if the vendor houses your customer database.