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Multi-Channel Marketing: Channibalism?

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Posted May 21, 2003 By Jack Aaronson     Feedback

Fear one channel will steal business from another? You may be a channibalism victim.

What Is Channibalism?

"Channibalism" is a basic fear felt by many executives and managers that one channel, or line of business, will steal business away from another. There are two facets to this fear: one tied to fears of consumer confusion and loyalty and one tied to managerial salary structures. The way a company organizes itself is way, way out of the scope of this column, but I'll touch on it while talking about the first fear: customer confusion and loyalty.

Customer Loyalty Over Multiple Channels: Channels as Products

Users who interact with your company over multiple channels are more loyal than single-channel customers. To be a multi-channel company, you first need to provide users with the channels to use. Then, you must encourage users to use two or more channels. You'll find over time your most loyal users are those who use at least two channels. Think about the types of users who use each channel and what channel combinations would be natural for them.

The next step is to think about your channels as if they were products. Apply the same marketing techniques you'd use to sell products, including acquisition, retention, and share of wallet. When you use these techniques on channels, they assume the higher purpose of making users more loyal by encouraging customer interaction over multiple channels.

Channel Acquisition

How do you reinvent traditional marketing techniques to work for channel marketing? It's easier than you think. I'll talk about channel acquisition strategies now and leave retention and share for another column.

To create a channel acquisition strategy, use the same scoring techniques you currently use to figure out which customers would be most likely to buy a new product you market. Score them according to their most likely "next channel." Once you've identified these new "channel-ready" segments, use your marketing knowledge to sell the channel as if it were a product.

It's critical to think about these campaigns' goals as encouraging people to add channels, not to migrate to a different channel. The point is not to replace a user's preferred channel but to convert that single-channel user into a multi-channel user. If you execute these campaigns successfully, you'll alert people like me to your new wireless channel and avoid sending my grandmother a note about your new Web site. She doesn't know what the Internet is and doesn't own a computer.

Similarly, understand what channels (and channel combinations) a user currently uses. The last thing you want to do is introduce a user to a channel that's less cost effective. Actually, the last thing you want to do is create a channel that's less cost effective than existing ones. Still, the climate sometimes calls for loss-leader channels that reach a new audience and will pay off in the future.

Thinking Like a Multi-Channel Company

Customers won't think of your company as multi-channel if you don't. If your channels are siloed, you're not acting like a multi-channel company. If your channels don't converge into a unified user experience; unified functionality; and a unified voice, look, and feel, you're not acting like a multi-channel company. You are instead acting like a consortium of single-channel companies.

A multi-channel company must rethink how it compensates employees. One of my clients is a bank in England. The company is beginning to create a multi-channel strategy but has a (common) problem: The sales staff is not empowered over multiple channels. A sale is attributed only to one salesperson. If a user learns of a mortgage through channel X, conducts more research on channel Y, and talks to the broker on channel Z to make the sale, only the last sales person will get a commission, regardless of how much time other sales staff spent helping that user through the cycle.

In this respect, that company is organized and compensated in a way that encourages competition between channels. This kind of company can never put on a multi-channel "face" for its customers because its people don't believe in it. They fear it. Salespeople should be user-centric and not care which channel the customer uses. This means all salespeople need to be aligned by customer segments they can handle, not by the channels to which they're assigned. That way, salespeople are empowered to handle customers over multiple channels.

Multi-Channel: A Way of Life, Not a Buzzword

Unless your company actually believes in a multi-channel customer experience and internally structures itself this way, a multi-channel campaign will fail.

This is only the beginning of a larger discussion on multi-channel marketing. Watch for more columns on this topic in the future.

Until next time...


Jack Aaronson is the CEO of the Aaronson Group as well as a corporate lecturer. The Aaronson Group works with companies to increase the loyalty and satisfaction among their customers, increasing their profitability. Focusing on multi-channel user experiences, Jack and his team makes sure that your users have a fulfilling and enjoyable user experience across all of your touchpoints. As a corporate lecturer, Jack also travels around the world teaching companies how to effectively implement personalization, loyalty programs and multi-channel CRM. He also publishes a newsletter about Personalization, User Experience and other related issues.

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