April 28, 2009

Channel Hopping And Multichannel Forensics

This week, many of you are busy chatting about an article from Peter Merholz at Harvard Business Publishing, an article about "channel hopping" ... and over on Twitter there's a whole lot of re-tweeting going on about articles related to channel hopping. Channel hopping and Multichannel Forensics are like peanut butter and jelly!

You can literally see Multichannel Nation swelling with pride once again. Somebody from Harvard said that people channel-hop, and that companies that develop channels in isolation are doing a bad job. The article gives Apple as an example of a company with a good strategy.

I'm still waiting for somebody to show that, by having integrated channels, the profit and loss statement swelled to 10% EBIT from a 6% EBIT, with an accompanying growth in sales. Use the comments section to include your own success stories.

For instance, I recently spoke with an Executive who told me that the creation of a new channel resulted in lower profits and greater customer attrition ... customers liked the new channel, shifted behavior to the new channel, and generated less profit as a result. This was all done as part of a coordinated, planned, centralized multichannel strategy. We're seeing examples of this all over the place, as unprofitable emerging channels replace wildly profitable legacy channels.

And we're seeing examples of chaos that work ... Zappos has 30% of the employee base doing non-integrated, uncoordinated conversations via Twitter. You don't centralize and coordinate 400+ voices, do you?

Not surprisingly, Multichannel Nation fails to report on all of the examples of stories that go bad ... we like to share positive stories that align with our worldview. And there will never be a shortage of those stories.

Every one of the three dozen Multichannel Forensics projects I've completed suggest that channel hopping is an automatic and assumed part of the customer experience.

However, the projects only sometimes suggest that having a coordinated, integrated, centralized, strategic multichannel response results in increased sales and profit. Those who work in the trenches know that life isn't so cut-and-dried.

More often, strong and knowledgeable business leaders with accurate data (i.e. Multichannel Forensics) know which levers to pull. It's sometimes more wise to kill a channel than to integrate a channel. It's sometimes more wise to let a channel seek it's own potential rather than to hamstring it as part of a centralized strategy. And it is sometimes more appropriate to have a centralized, integrated, cohesive strategy, as advocated in the article.

It is always best to know how customers interact with channels ... nobody can argue that one!

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