Understanding the Multichannel Customer

It seems everyone is talking about multichannel marketing. But what are businesses really doing? Is it simply that companies have three or four additional customer marketing channels--or is something more significant happening? Here's what we see: There's plenty of multichannel buying going on, and lots of marketing going on in all channels, but there's not a lot of integrated multichannel marketing. In other words, just because multiple channels are being used doesn't mean they are being used effectively in building larger, longer-lasting customer relationships. The hype (or promise) of multichannel marketing is outstripping the reality. Most companies know instinctively that buying-behavior patterns are changing--that customers and prospects are integrating the Web into their product research and buying patterns--but the same firms are also not really sure how to manage their customer relationships in this changing world. We see two major problem areas facing marketers in this multichannel world. The first is that their customer data is not integrated across channels; they know that customers are using channels in various browse-and-buy patterns, but they can't see the patterns clearly. The second problem area is that marketers' data on their customers is not tightly linked to the customer touch points. Both of these problem areas inhibit marketers' ability to identify specific customer preferences and to eliminate marketing waste by matching communications to preferences. The proliferation of channels (particularly the e-channel) and the CRM phenomenon have caused companies to focus on operational and marketing issues within each channel, just to get things functioning properly. Thus, integrating across channels has not been a priority to date. For example, the e-channel is undergoing tremendous growth as a purchase channel and a marketing channel. This is encouraging, but too many marketers are still struggling with mastering the dynamics of that channel: improving search results, improving site navigation, Web analytics, and email applications. What little multichannel integration has been achieved has come in the form of integrating the brand across channels, which is marketing-speak for "let's get all our pictures and words to look and sound the same." This is a worthwhile exercise, of course, but cannot really be considered as data driven, customer-focused marketing. Marketers know in general that more than 65 percent of consumers are browsing and buying in various cross-channel combinations, but the majority is unable to analyze this behavior for their own customers. In fact, according to a retail industry survey, 74 percent of companies list their biggest measurement challenges as "integrating data from multiple sources" and "understanding user behavior." It appears that the rapid growth in the e-channel is fueling a need to understand customers' channel preferences and buying patterns to more effectively manage customer relationships. There remains a major opportunity for companies that can address this problem rapidly and effectively by creating an integrated marketing database that can support all marketing efforts, regardless of channel--and can provide real insight into cross-channel behavior and the ability to apply new, integrated strategies. Only then will reality live up to the hype of multichannel marketing. About the Author Andy Cutler is Chief Strategy Officer of BeNOW, a database marketing services firm. Cutler heads up BeNOW's Multichannel retail group. He has 24 years of experience in database marketing and is particularly skilled at helping companies evolve from a product-focused to a customer-focused marketing and sales approach. He has worked with such companies as IKEA, Four Seasons, Hammacher-Schlemmer, and Rhodes Furniture. Contact him at Andy.Cutler@benow.com