Multichannel Prospecting: Changing Channels
Whether you want to grow your business or maintain your database size as customers age out, prospecting is a challenge every successful cross-channel retailer needs to master. For some, buying lists and using paid search are the beginning and end of their prospecting efforts. But many eventually realize that to grow their businesses — and combat limited list universes and increasingly competitive paid search pricing — they need to look at expanding further into multichannel prospecting.
How do you determine which direction to go? With so many choices offline — inserts, space ads, solo mailings, DRTV, radio, etc. — and online — web ads, Amazon.com and eBay, affiliates, retargeting, etc. — it's easy to be overwhelmed. By focusing first on identifying goals before selecting media and tactics, you'll make better choices and avoid mismatches between your brand and specific options. "If you don't know where you're going, any road will get you there," is as true of customer prospecting as it is of Lewis Carroll's Alice finding Wonderland.
= Risk Reduction
Multichannel prospecting reduces risks through diversification. Financial managers reduce investment risk by diversifying a portfolio with stocks in different sectors. The same concept applies to customer acquisition: If you only rent lists, you're highly vulnerable to postal increases, deterioration of list rental universes, etc.
Adding paid search gives you one hedge against those risks. The more numerous and varied your prospecting techniques, the less external environments will impact you because you have options. Your prospecting business is able to weather the storms that hit any one media.
Diverse prospecting also leaves you less vulnerable to competitors because it puts more acquisition arrows in your prospecting quiver. But don't ignore competitors' efforts — study your competitors as well as related businesses trying to reach the same audience. Which media types do they use repeatedly? Repeat ads in the same medium by one or more competitors means you should consider that medium as well.