May 12, 2008

Secret #36: Channel Compromise Reduces Total Profitability

From Hillstrom's Multichannel Secrets, here's Secret #36:
  • Channel Compromise Reduces Total Profitability
Assume you are going to go to lunch with three of your co-workers. Thomas wants to enjoy an all-you-can-eat salad bar. Betty wants a nice, sit-down meal at a local bistro. Marge likes the deli down the street.

You decide to compromise. After listening to the opinion of the group, you go to an Italian restaurant, because everybody likes Italian.

Now it is quite possible that you'll have a pleasant lunch. It is possible that everybody enjoys their meal.

But unless the combined interaction between the four lunch attendees is highly stimulating, the overall meal experience will not be as good for each individual.

In no way am I saying you shouldn't try integrated advertising campaigns. The end result of these integrated campaigns and channels should be increased customer retention, increased customer acquisition, increased frequency, increased spend per order, and increased profit, right? If you're not accomplishing this, go back to maximizing each channel while continuing to experiment.

In 2008, more often than not, channel compromise reduces total profitability. Someday, this fact might change.

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