May 15, 2017

Multiple Online Channels Have To Be Good, Right? (Please Say Yes)

Probably not.

Let's compare two customers. The first customer spent $200 weighted historical dollars online. You remember her future profile, right?
  • Call Center = $4.40
  • Online = $60.83
  • Email = $6.29
  • Search = $9.85
  • Retail = $12.84
  • Total = $94.20
Let's say that we instead get this customer to spend $200 weighted historical dollars via email and search ... a hundred dollars each. What does the future profile look like now?

  • Call Center = $2.00
  • Online = $12.63
  • Email = $34.29
  • Search = $32.25
  • Retail = $10.84
  • Total = $92.00.
Look at that! Three things happen.
  1. Once the customer is hooked on channels, the customer doesn't spend much money online ... the "channels" have to exist for the customer to purchase. Without email and without Google, the customer isn't buying. Hint - Google likes that!
  2. Total spend doesn't really change - channels actually cause a drop in spend of about 2%.
  3. Retail spend drops by more than 20%. Hooking the customer on online channels diverts some spend away from stores. Omnichannel!!
These things are all happening at a macro level, and they are contributing to the slow drain of the retail channel and the slow drain of loyal online buyers who buy because they love your brand.

Worse - the email dynamic is frequently fueled by zealous marketers who offer the biggest discounts/promotions to shop via email marketing - we convert a customer to the email channel because of low prices and 40% off. 

You are running these models and you fully understand how your channels interact with each other, right?

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