September 21, 2008

Multichannel Marketing: A Weekend In Wisconsin

When you spend a morning in rural Wisconsin, you understand how messed-up multichannel marketing has become.

The interstate highway system transformed many small towns. In Wisconsin, I-43 was built along the old US-141.

Think about US-141 as the old school world of catalog marketing.

Think about I-43 as e-commerce.

Today, I drove along the old US-141. Here, we see a dramatically different world than we see along I-43, even though I-43 is just a third of a mile to the east. We see small towns. There are handmade signs for accountants, for bakers, for the Friday Fish Fry at the local tavern, for the farm implement. The buildings are old. Social Media doesn't exist here, though walking through the reception line after church is technically a high-octane version of Social Media!

Every mile or so, there is a blue sign pointing travelers to the Interstate Highway. This is like the best practice of e-mail marketing, or of using the catalog to direct the customer to a larger merchandise assortment online. I think there is irony in that the signs are blue --- blue representing a colder, more efficient form of travel.

Eventually, I-43 replaces the old US-141. Now I'm forced on to the Interstate Highway. This is like e-commerce at its finest. Everything moves fast. If you're not interested in a Friday Fish Fry, don't worry, you won't be pointed to one. There are big blue signs preceding every exit --- offering big brand choices for Gas, Food and Lodging This is a lot like paid search, you buy your way onto these signs, and by doing so, you gain a competitive advantage over the fools that cannot afford to advertise on the big blue signs.

There are few signs of life along I-43 --- the job of I-43 is to quickly transport you between Green Bay and Milwaukee without interruption, sort of like the role Google plays online. If you want to find somebody to bake a cake, you'll need to get off the freeway.

In the past thirty years, these two roads, the old US-141 and the newer I-43, evolved differently.

Along the freeway, commerce congregated near exits, creating a big box version of paradise suitable for any individual who needs to stay at a Super 8 motel, get gas at Shell, and eat lunch at Burger King.

Along the old highway, localized commerce thrives. And as expected, most of the signs point to I-43. Sure, there are signs on the freeway that point to the towns on the old road. But the real purpose of the freeway signs is to point you to the brands that are now between the freeway and the old road.

So here is where multichannel marketing is all messed up. If I-43 and the old US-141 followed multichannel best practices, we'd have a complete mess. All of the businesses along each highway would have to be the same. Travelers would be encouraged to spend equal time on each road, right? And those travelers would be the most valuable travelers. Everybody would want those travelers to spend equal time on each road, buying from local business and the brands along the freeway. Heck, we'd set up roadblocks on the local road (though not on the freeway, we don't do that with e-commerce), forcing travelers on the freeway so that they could support the brands along the exits.

We'd give these travelers incentives, like ten cents off a gallon of gas if the customer simply drove from the local road to the freeway to fill up. We would purposely build a church along an exit, then offer incentives for folks to visit the new church. We'd obsess about measuring the cars migrating from the old road to the new road, questioning each individual about the exact reason they got off the old road, trying to match back the localized activity that drove the traveler to the freeway.

In the real world, it doesn't work like this, does it? Nope, the freeway was built, local businesses died, brands saturated the exits, and a seismic shift in the makeup of the businesses along the local road was needed to allow the old US-141 to survive.

So why do the pundits continually force us into a box on multichannel business models? Why can't we let all of our micro-channel evolve in a manner best suited for each micro-channel --- well, not for each micro-channel, but for the way the customer wishes to use the micro-channel?

Listen to the pundits, because they have valid insights.

But move beyond the insights. Have vision. Consider how each of our micro-channels might best serve a customer. Leverage the strengths of each micro-channel, minimize customer exposure to the weaknesses of each micro-channel.

For catalogers, there are many weaknesses. The catalog is no longer relevant to a third of the audience it used to be relevant to. We keep mailing them, however, hoping for results to improve, and this is killing the profitability of our brands. E-mail is nothing short of a pointless disaster for so many of us --- driving a nickel or dime of revenue per e-mail. This has more to do with template-based best-practice design, redundant offers and promotions, and a scorched-Earth saturation of similar messages within and across brands (Up To 40% Off, LIMITED TIME ONLY) than it has to do with e-mail marketing as a micro-channel.

And then we have Social Media. Social Media micro-channels can be used to warm up the cold, efficient, Google-dominated world of e-commerce. But the pundits are ruining Social Media, too. Blogs are dead, conversations now happen on 140 character micro-blogging applications that have almost no business relevance whatsoever (unless you are a fan of customer service, then micro-blogging platforms are invaluable --- hint hint!). We were told businesses had to go down this path --- and once we became convinced we had to do this, the Social Media pundits all left to have their own tiny little discussions in the world of micro-blogging.

Maybe we should stop listening to all of these pundits, stop trying to prove the effectiveness of Social Media, and simply use Social Media to warm up the cold, lifeless world of e-commerce --- making it more like the old US-141 in Eastern Wisconsin. Maybe that's the best way to serve a customer.

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