Mind the Channel

Recent years have witnessed new interaction channels popping up with increased frequency. According to the latest research from Pew Internet, 58 percent of American adults use text messaging (SMS) and 31 percent do so on a regular basis. In another report, Pew warned, "email may be at the beginning of a slow decline as online teens begin to express a preference for instant messaging." Facebook, among others, continues to explode and the shift toward communication through social networks among teens and college students is well documented.

I am a Pew Internet fan, but their mission is to "provide information on the issues, attitudes, and trends shaping America and the world," not marketing research. Nevertheless, this information is often used to imply marketers need to develop strategies for communicating through emerging channels. A 2008 Channel Preference Survey, showed clear differences between consumers' preferred personal communication channels and their preferred marketing channels, and gathered information on which channels should be used in which circumstances.

Direct mail and email have more influence on getting customers to make a purchase than any other channels. This is true not only for older consumers, but for teens and college students. Consumers 15 to 24 years old are influenced to purchase through email more than they are through text messaging, social networks, and IM combined, and direct mail's familiarity as a marketing channel makes it a preferred channel for marketers to communicate with these tech-savvy consumers.

What channels are appropriate, and when?

• Direct mail (85 percent of American online consumers have provided at least one company with permission): Direct mail is universally seen as the most appropriate channel for marketers to communicate with American online consumers. The majority of consumers are receptive both to permission and unsolicited messages through this channel, making it the direct marketing channel for acquisition. Direct mail gives consumers time to review messages at their leisure, which gives them the sense that they are in control of the relationship. It also provides people with written documentation of transactions, which is a source of comfort for some (especially older) consumers. The delay associated with delivery of direct mail makes it less than ideal for customer service issues, especially those requiring immediate notification.

• Email (95 percent have provided permission): Email is also used universally among online consumers and is widely accepted as a direct marketing channel. That said, issues with spam have rendered this channel acceptable only for permission-based communication. Consumers' negative views of unsolicited email can cause them to turn against even reputable brands if they perceive email communications to be spam, making relevance critical. Online consumers expect confirmation of online transactions and customer service calls through email.

• Text messaging (7 percent have provided permission): Text messaging is growing in popularity as a channel for communicating with friends and family, but it is largely off-limits to marketers for promotional marketing. Targeting consumers as they drive past your retail location is still too "Big Brother" for the vast majority. Only those that have all-inclusive data plans are receptive to text marketing, but even then they are likely to prefer direct mail or email promotions. Consumers feel customer service notifications, such as travel or financial alerts, are the most appropriate uses of corporate text messaging. Even then, it is still a matter of personal preference.

• Social networks (4 percent have provided permission): Social networks have not evolved into a welcome place for marketers-at least when it comes to direct marketing messages. Consumers understand the ad-supported model and don't mind general ads in this environment, but this does not translate into receptivity to direct messages from marketers.

• Telephone (37 percent have provided permission): While unsolicited telemarketing is universally viewed with contempt, calls related to the status of a current account or alerts related to travel or potential fraud are viewed very favorably.

Minding customer preferences

It takes time for consumers to welcome marketing communication through new channels, but some are starting to do so. For marketers, the challenge is determining which ones. Imagine your personal relationships-do you communicate with all your friends and family the same way? Similarly, each consumer is different, making the inclusion of channel preferences in your CRM strategy imperative. For example, consider financial institutions that offer a choice of paper or online statements. Start there and move onto offering customer service notifications through email, phone, or text. Once you have those in place, it is time to start experimenting with your promotional messaging. Honoring customer preferences not only opens up new opportunities, but it can become a loyalty driver as well.

About the Author

Morgan Stewart (mstewart@exacttarget.com) is director of research and strategy for ExactTarget, a provider of on-demand email and one-to-one marketing solutions. For more information on ExactTarget or the 2008 Channel Preference Survey, go to www.exacttarget.com.

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

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