Take a 360-degree customer view
With high investment costs and not-so-simple database integration strategies, it can be tough for retailers get started in multichannel marketing. Four experts share their best tips.
Sometimes we make multichannel marketing harder than it has to be. Granted, it isn't easy or cheap to align inventory systems across channels. Nor is it easy to integrate customer information databases. Still, there are things we can do to get a view of customers across channels that will let us market to multichannel customers more effectively.
Pay attention to the logical progression that many multichannel customers go through. Catalogs create demand and interest, boosting customer acquisition. These customers migrate online, then use the Web site to research merchandise that will eventually be purchased in a store. Each marketing channel — catalog, e-mail, Web site, store — plays a different role. By capitalizing on the life cycle of the customer, we can conserve marketing dollars.
Something every company can do is ZIP code profiling. Each ZIP code is classified on the basis of urban, suburban and rural characteristics, as well as distance from a store. The marketing strategy for a customer is different based on his or her ZIP code. Rural ZIP codes, for instance, have customers loyal to catalog marketing, so they can often support increased page counts and increased mailing frequency. Suburban ZIP codes are hotbeds for online customers. A different version of a catalog with fewer pages featuring your best product can work well with this audience. Finally, the urban customer uses e-mail and your Web site to research merchandise that is often purchased in stores. Don't worry so much about online conversion rates or e-mail click-through rates with these customers.
In multichannel marketing, price points matter. Big ticket items are often purchased in stores or over the telephone. Commodity items occasionally sell best online. Multichannel marketing doesn't have to be complicated. Focus on simple strategies, measuring annual changes in repurchase rates and spend across channels.
ZIP code profiling is a strategy any company can use
Customer demands for a seamless shopping experience across all retail sales channels, including e-commerce and bricks-and-mortar stores, are forcing retailers to move away from a channel-centric view of their business to a customer-centric view. A key challenge for small and midsize retailers (SMRs) is consolidation of disparate retail management systems into one customer-focused system. While big-box retailers have the expertise and resources to custom integrate their best-in-breed solutions, the typical SMR does not.
So, how can SMRs compete at the same level as the big-box retailers? It's all in how they integrate.
SMRs typically work longer and harder manually moving information back and forth between many individual systems. The first step is recognizing the need to do something before customer relations and sales are affected.
Most SMRs started out with a single channel — typically bricks-and-mortar — and, over time, added telesales, an e-commerce storefront and other online channels, such as eBay. With each channel came another management system and another set of customer, product, sales and inventory data. These must become a single comprehensive system to achieve the 360-degree customer view.
Finding the right solution is the final step. The legacy systems offered by vendors often provide stop-gap solutions that can synchronize some, but typically not all, of their systems — and not in real-time. Many SMRs are discovering that on-demand solutions can provide a big-box retail class solution at a price that fits the SMR budget. These retail management software solutions wrap point of sale, multichannel e-commerce, CRM and back office operations software around a centralized customer and inventory database, giving SMRs a real-time view of their customers and business.
On-demand data integration can help smaller retailers compete
President and CEO, Marketsmith Inc.
Creating a 360-degree customer experience contains inherent contradictions. While we want to have a comprehensive view of our customers, we also want to deliver relevant content efficiently; that is, ultimately delivering fewer messages and generating greater return for our marketing spend.
So how do we understand our customers completely and interact with them only when the outcome is likely to be positive? The answer lies in knowing when and how to use our marketing databases across all channels.
The goal of 360-degree marketing is that the merchant and the customer are on the same path, using services and information which facilitate a favorable outcome for the customer. For this to happen, it's necessary to capture all transactions, interactions and communications with customers. All employees with the potential to touch customers or customer data must also be trained to understand the merchant's product/services, their value to customers and the customer service ethic. Then you can create processes by which customer service personnel and customers themselves can access customer history in-store, on the Web and over the phone.
Finally, make sure you understand the responsibility as a guardian of customer data. Is a 360-degree customer view bordering on privacy issues? The implications are very different for a financial services company, for example, than for an apparel company.
The 360-degree customer view is just a reminder that technology, data and analytical intelligence are not enough for multichannelers to thrive. What we need is an end-to-end view of the experience, then to fix any spot that does not deliver great customer service and value with customer-friendly policies. As you chase to fix what's broken, you will inevitably see your customers because you will be on the same path. Then you can do one better, creating an experience that surpasses their expectations.
Capture all interactions and communications with customers
VP, cross-industry business solutions, Teradata Corp.
Designing customer experiences requires intellectual comprehensiveness as well as powerful analytical intelligence capabilities at the marketer or servicer desktop. Customers must be understood through detailed behavioral analysis. Individual experiences, which drive the customer's strategic value to the business, can then be differentiated. With this in mind, here are some imperatives.
Marketers must have analytical technology tools to create precise panoramic and detailed views of customer behavior over time and across channels. Customer treatments and messages must be informed and tailorable or adaptable to adjust to circumstances in personal lives and the dynamic marketplace. And, customer experiences must be consistent across communication channels so each customer feels known by the business.
Personalization is key. With each experience, customers should perceive an individualized treatment that is meant explicitly and uniquely for them.
The CRM systems used by marketers must provide the necessary tools for appropriate allocation of resources to maintain the balance between the customer's projected lifetime value and each customer treatment.
Marketing, sales and services accountability is necessary to gain knowledge of the best investments that may be made in each customer.
Marketing programs must be collaborative across departments and business units to ensure continuous positive interactions, reinforcements and ROI.
Finally, the customer experience, at every interaction, affects future revenue and profit. Marketers must ensure that customer experiences reinforce the organization's basic brand value proposition and differentiate its business.
A holistic customer view helps retailers create personalized experiences