The progression from single channel to multichannel and Omnichannel approaches to marketing demonstrates the increasing sophistication of marketing over time that finally puts the customer at the center of all interactions.
Single-Channel Marketing Campaigns
In the beginning, there were single-channel marketing campaigns. The effectiveness of early forms of TV and print advertising were difficult, at best, to measure and improve. This led merchant Jon Wanamaker to declare:
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half”.
The emergence of direct mail and direct response TV and cable TV, however, heralded an era of greater marketing sophistication, providing greater opportunities for marketers to measure and improve results over time. Direct mail, for instance, enables marketers to segment their audience and send targeted postal mail to each segment. By coding the communications, moreover, they were able to see the types of direct mail pieces that produced the best results for each segment. Direct response TV affords advertisers to immediately see how an ad is performing and make improvements in the ads over time. Call center reps became able to access information about a given customer based upon the phone number used to call in. And cable TV provides an opportunity to test concepts in local markets before rolling them out to larger audiences nationally. A/B testing, moreover, has almost always been a key tactic to making improvements in marketing performance.
But of course it wasn’t until the emergence of online marketing channels–including paid and organic search, display advertising, email, social media, web chat, chatbots, mobile messages and notifications–and associated analytics that enabled marketers to rapidly understand and continuously improve marketing effectiveness and ROI.
Multichannel Marketing Campaigns
As marketers pieced different channels together, they developed Multichannel Marketing Campaigns. While a major improvement over single-channel marketing, they had their own limitations. While each channel has visibility into their own analytics and is able to make improvements, they usually have no idea as to what is happening in the other channels. Do customers have channel preferences that should be observed? Was the offer made in the one channel also made in other channels? Were the distinct offers consistent? Did the customer actually accept an offer from another channel? Readers can easily see how this can provide a confusing customer experience that translates into poor marketing performance.
Omnichannel Marketing Campaigns
Since most customer journeys include interactions with our brands via multiple online and offline channels, its important to be able to meet our customers with up-to-date offers and other forms of content through any and all of these touch points. The following example, provided by Elliott Batiste, depicts one such journey throughout the purchase process and full customer lifecycle.
Developing a company-wide Omnichannel marketing and sales approach is extremely difficult. In most large businesses, uncoordinated marketing campaigns are handled by people in different functional organizations or business units. Sometimes, there is even competition as to which organization can outperform the others, so cooperation and collaboration are extremely hard to obtain. Even when there is an attempt to collaborate, the fact that customer and marketing data almost always resides in silos, represents an even larger challenge. How can one business unit try to cross-sell to a customer who has purchased something from another BU without having information about what was purchased from the other BU? How can a call center representatives understand the context of a customer’s call if they don’t know where they may be struggling on the business’ website?
So how can we get each channel to understand what is occurring in each of the other channels? The first challenge is to have unique identifiers for each customer that marry up their respective cookies, phone numbers, clickstreams, email ids, social media handles, survey responses and so on. This is required for each channel to understand the specific customer with whom they are interacting. The second challenge is to integrate the customer data that each channel possesses to provide a 360 degree view of the customer.
Data Integration Approaches
There are two primary ways to integrate data from diverse databases.
- Build a Customer Data Mart. This approach requires a great deal of data manipulation to extract data from individual databases, translate them into a common data schema and load them into the common data mart. Ongoing maintenance of a customer data mart is also quite difficult, as new channels are added, new business units get involved, and new KPIs become measurable and useful.
- Leverage Big Data. Instead of trying to maintain customer data in a data mart, this approach lets the data remain in their original databases. When decisions need to be made about providing the right offer to the right customer at the right time, via the right communications channel, for instance, the relevant data is brought together and analyzed in computer memory, enabling a decision to be made in real-time.
Omnichannel Marketing and Commerce
Adding commerce to the mix makes Omnichannel approaches even more attractive. In this context, we need to distinguish between communications channels and distribution channels. While communications channels obviously refer to the means through which we interact with our customers, distribution channels refer to the way our products and services are made available to our customers, either directly or via distributers and other resellers. A simple example is the ability for customers to buy something online and pick it up in a retail store. Conversely, once in a retail store, a customer can scan an item’s bar code on his mobile phone, enabling him to learn more information about the product, purchase the product online and/or obtain an online coupon to be redeemed for an immediate discount in the store.
The pressure to provide instant gratification to e-commerce shoppers has led to additional ways to quickly fulfill products for them. The trend has moved from shipping products from centralized warehouses to shipping from geographically localized distribution centers, picking products up at local vending machines as well as delivery by local stores, ride-share drivers and, eventually, drones and self-driving vehicles