Are Multichannel Customers Truly the Best Customers?
Dear Dr. pROfIt: My CEO recently asked me to run an analysis of our dollars per channel metric, one that measures how much our customers spend across catalogs, email marketing, affiliates, paid search, mobile, social media, banner ads and retargeting programs. The metric looks awful: Five years ago, customers spent about $100.00 per channel; today, customers are spending $65 per channel. I always read that “multichannel customers are the best customers,” yet my data doesn’t demonstrate this known truth. Help!
Dr. pROfIt: In the past decade, the number of channels available for consumers to interact with a brand has grown exponentially. However, retention rates and spend per customer — two of the most important metrics analyzed by businesses today — haven't improved.
This means that consumers are now spreading out across channels. Some shop via catalogs and email campaigns, others via mobile and search. And now some consumers even shop via social media. All consumers are choosing the channels that are most congruent with their lifestyles.
This doesn't mean that additional channels cause an increase in spend, however. More channels equate to more choices, not necessarily more spend!
The secret to all of this isn't to send more advertising across more channels. Instead, predict the channels that each consumer is likely to reside in, then market to consumers within those channels. A customer who remits payment via a personal check isn't likely to participate in social media, so focus on classic direct marketing, mail-based strategies with this customer. A shopper who visits your website after a search via a mobile device isn't as likely to be impacted by classic marketing techniques, so speak the language that's native to that consumer.
Modern marketing has evolved from the style of marketing practiced five years or 10 years ago. Customers aren't multichannel in the traditional sense. Instead, they pick and choose where they want to interact with brands, so you have a responsibility to filter out the marketing channels that they no longer prefer. All of this has to be done at the customer level, not at a strategic level.