## December 11, 2012

### Omnichannel

I get a fair amount of feedback about my stance against anything that is "omnichannel".

I'm not against omnichannel strategies.  I simply struggle with the defense of "omnichannel" on the basis of lizard logic like this ... "omnichannel customers are 294 times more valuable than other customers".

The logic is largely hokum.  Maybe even bunkum.

I recently ran a simulation, evaluating four segments within my algorithm:
• 2x Buyers Last Year, Single Channel = \$236 demand value next twelve months.
• 2x Buyers Last Year, Omnichannel = \$242 demand value next twelve months.
• 3x Buyers Last Year, Single Channel = \$367 demand value next twelve months.
• 3x Buyers Last Year, Omnichannel = \$379 demand value next twelve months.
In fact, across the four simulations, omnichannel customers were only 3% more valuable.

You probably don't need a simulation to see this ... just run a query, freezing customers at the end of 2011, equalizing them by RFM factors, then measuring the difference in 2012 spend between omnichannel customers and all other customers (after equalization).

Being "omnichannel" isn't the solution.  Focus on products that customers crave (yes, I realize that's hard to do).

Run the query above, or run your own simulation ... let us know what you learn!

1. Benoit1:37 PM

Great post. Question, how would you go about equalizing by RFM factors? Thanks in advance

2. No need to over-complicate things ... simply picking 12 month buyers who had exactly 2 or exactly 3 purchases last year gets you to the outcome I illustrate above.