Brain Food: Crash course in ... Multi-channel marketing

You've just launched an e-commerce site, and the hits are mounting fast. But your field sales team worry that it will put them out of a job, and most customers seem to browse online then call the call centre to complete the sale. Time you got this multi-channel thing under control.

by Alexander Garrett
Last Updated: 31 Aug 2010

Multi, not multiple. 'Adding multiple channels just adds costs,' says Rod Street, head of customer management at IBM's business consulting arm.

'A multi-channel approach is about integrating channels in some way so that you can move and share customers between channels.'

Channels are a weapon. 'Once, companies took for granted their route to market and competed on things like products and price,' says Dr Hugh Wilson, head of the multi-channel marketing club at Cranfield School of Management. 'But firms like Compaq and Dell showed that your choice of route to market can be a competitive battleground in itself.' If you don't offer the optimum route for customers to deal with you, your competition soon will.

Think combinations. Customers often choose different channels for different stages of the buying process, says Wilson. The key is to create a chain that matches the channel used to the customer's needs at each stage, without offering disproportionate service for the cost incurred.

Encourage customer DIY. If customers can help themselves via low-cost channels such as automated call systems or the web, they are often more satisfied. 'Use the web to answer simple customer queries and keep expensive sales managers free to sell,' says Wilson. Complaints and the more complex interactions may still need to be handled through one-to-one dialogue.

Stamp on conflict. 'If you simply reward everyone on sales, they'll compete with each other, they won't refer leads, and they won't do what's best for the customer,' says Street. 'You need to reward people for their part in the process or find a more rounded set of performance measures, such as customer satisfaction and customer feedback.'

Design from the top. 'Multi-channel strategy needs to be defined at a high, cross-functional level,' says Wilson, 'not delegated to a channel baron with their own vested interests.' Better to organise around customers than in channel silos.

But think people. An IBM study showed that in customer management, the biggest differentiator between success and failure is people, rather than technology issues. 'Educate and train people about what you are trying to achieve,' advises Street.

Measure it. Take a holistic approach, says Wilson. Measure the effectiveness of channel combinations, not just individual paths.

Do say: 'Our website, call centre, sales force and resellers are all working seamlessly together to create maximum customer value.'

Don't say: 'The winner is the channel that gets the most sales.'

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