7 Steps to Multichannel Mastery

Editor’s Note: This is the first article of a three-part series on becoming more proficient and adapting to the multichannel world. Parts two and three will appear in our June and September issues.

Can you imagine a catalog/multichannel company not striving to become more efficient and effective in each selling channel in which it operates? Certainly not.

This article focuses on the key issues and trends impacting multichannel selling today. It examines how you can improve your bottom line in each channel, cuts to the chase and identifies seven issues that smart direct sellers need to focus on this year. (You can also find another three issues in a Web-exclusive article on CatalogSuccess.com.)

Beyond P&G
1. Define and reinforce your brand across all channels. Years before true multichannel marketing evolved to its current state, catalogers only thought of niche and positioning. Brand was a concept Procter & Gamble specialized in; it seemed irrelevant to direct selling. As multichannel marketing has become more ensconced in the fabric of direct marketing, though, brand has become a powerful way to provide the same message to customers in a catalog, on the Internet and at retail.

The challenge is to project a consistent brand image across all selling channels while securing customers’ “top-of-mind” recognition. Without a doubt, branding is one of the most important underpinnings of successful multichannel marketing.

2. Grow and refine your merchandise concept across all channels. Nothing is more important to the growth of a successful catalog, Internet or retail business — and to gaining repeat business from loyal customers — than a strong, focused merchandise assortment and presentation. A number of questions need to be addressed:

● Should all products be offered in all selling channels?
● Should there be parity in pricing throughout all selling channels?
● How should special merchandise offers, specials and markdowns be handled?

The traditional roles of catalog and retail stores are changing. Direct marketing is becoming the driver of Internet and retail activity. Instead of offering all products in all categories, catalogs and direct mail are attention-getters, guiding customers to the Web or a nearby retail store, where a much wider assortment can be offered.

Mastering these merchandise challenges and keeping a fresh, updated assortment will keep customers coming back.

Capturing New Names
3. Improve new customer acquisition, especially in a higher, more restrictive postal and mailing environment. Let’s face it, postal rates will probably never go down. We’ll be fortunate if increases in mailing costs can be controlled at the level of inflation.

Multichannel practitioners have a distinct advantage over any of the pure-play alternatives. Besides using traditional list-, space- and mail-related media for new customer acquisition, multichannel marketers can espouse Web technology to let customers find them — and can be very proactive about capturing customer names through their retail stores.

One advantage a company gains from a successful multichannel business is better value from its advertising dollars, which makes new customer acquisition more efficient. The goal for every multichannel marketer is to improve the advertising-to-sales ratio. Integration of new customer efforts across mail, Internet and retail leads to notable efficiency and the all-important growth of your housefile.

4. Work your customer list harder. Getting greater return from your existing customer list is always a challenge. In a true multichannel environment, an integrated customer database with transaction histories from all selling channels is critical. A recent survey by Modalis Research Technologies indicated the following:

● 90 percent of customers don’t want to be asked the same database questions through different channels;
● 73 percent of customers expect company agents (phone reps, retail sales clerks or Web correspondents) to know everything about them, especially their previous transaction history; and
● 72 percent will stop doing business with a company that demonstrates poor customer service.

The multichannel database has a much broader responsibility than it had in single-channel selling. Not only must you capture every sales transaction from every channel, but you also need to track and measure all results by promotional effort.

In essence, the database drives customer marketing and a totally integrated buyer communications plan by channel. Our experience is most companies undercommunicate with customers or treat all customers alike.

5. Comprehend and apply metrics and analytics to every phase of the business across all channels. Successful multichannel merchants understand that numbers and analysis drive the business. First, your company should understand the key metrics that impact the business.

Second, apply analytical techniques in managing the business. Each selling channel has numerous key metrics to track and adminster marketing, merchandising and financial aspects of the business. Keep up with industry studies and research on how to apply these metrics.

A 2006 British Royal Mail study on the impact of catalogs and direct mail flyers on Web sales, which was modeled after one done by the USPS, showed catalogs drive Web sales, both in annual purchase frequency (up 76 percent) and amount spent annually (up 72 percent).

6. Seek out and use all aspects of the Internet to greater advantage. Each year the Internet has a bigger impact on the buying habits and patterns of consumers, and 2008 certainly won’t be an exception. Unless you’re selling exclusively to septuagenarians who have little interest in browsing or buying from that “new-fangled Internet,” the Web can be a major driver of store traffic, enhance catalog sales and be a huge selling channel on its own.

Smart multichannel marketers aggressively use tricks like search engine optimization, pay per click, e-mail campaigns and highly navigable Web sites to seek and find new customers, drive Web and retail traffic, and boost overall results from existing customers.

A recent 2007 study, for example, found consumers (especially those under 50 years of age) prefer to go online rather than to stores or shopping malls for their Christmas shopping. This is a significant change from 2006. The Web trend is not a passing fancy or fad. The trick for multichannel sellers is to embrace all of the online technology.

Differentiate Creative
7. Differentiate your creative effort. Directly tied to branding, establish a unique or differentiated brand and carry it through in all its selling channels: catalogs, direct mail, in-store signage, Web site, e-mail campaigns and space and public relations efforts.

Setting your business apart from the competition (differentiation) is critical in today’s cutthroat selling world. Try this three-step approach:

● Define the brand point of difference (e.g., look, color palette, design, photo style, copy style, etc.);
● apply that brand personality to each selling channel; and
● be consistent in all advertising and promotions.

Many smart direct marketers haven’t a clue how to do the above and should seek help in establishing their brand and creative presentation.

Conclusion
Becoming a true (and profitable) multichannel practitioner is no easy task. In this article, we’ve reviewed seven key issues and core competencies that winning multichannel merchants must consider to prepare themselves for the future.

Our next article, coming in the June issue of Catalog Success, will focus on multichannel culture. We’ll discuss the challenges of creating a company ethos that supports and encourages multichannel sales. In the September issue, we’ll look at two more key elements of multichannel selling when we hone in on branding and merchandising efforts to reach customers with changing buying habits.

Brent Niemuth is creative director and brand evangelist, and George Hague is senior marketing strategist at J. Schmid & Assoc. You can reach them at (913) 236-8988 or BrentN@JSchmid.com or GeorgeH@JSchmid.com.

For three more key points, go to this story on CatalogSuccess.com, then click on “Three Key Multichannel Trends and Issues” under Related Content.