While many small- to mid-sized retailers are using multiple channels to interact with customers, only a few of them have developed an integrated multichannel marketing strategy. It is not uncommon that the retail side of a business doesn’t know what the Web side is doing.
Most marketers understand that they must correlate customer interactions across multiple channels to gain a better understanding of customer behavior and preferences.
However, the task of integrating data to create a 360-degree view of customers has proven to be very challenging, indeed. For small- and mid-sized retailers, the biggest difficulty is often money because many marketing initiatives are competing for the same limited resources. The bad news is that oftentimes data integration doesn’t seem to be so urgent in the eyes of CEOs.
The following three tactics have worked very well at Golfsmith, a specialty retailer of golf equipment.
- Pass customer voices to top management. Failing to integrate data from multiple channels can result in bad customer experiences and lost revenue opportunities. If a customer makes a purchase in a retail store, but the very next day he receives a “We Miss You” email from the Web team, the customer will not be happy because he feels that your business doesn’t know him. Such situations are unavoidable if channels are disconnected. Customers don’t view your business in silos. With the proliferation of social media, one customer’s bad experience can quickly be multiplied on Facebook and Twitter. Pass customers’ voices along to your top management, and they will listen.
- Use customer lifetime value (LTV). Customer lifetime value is another powerful tool in a marketer’s arsenal. Since customer data is stored in disconnected places, it is impossible to calculate the true LTV for multichannel customers. A customer’s LTV might be average in both retail and Web channels, but when combined, the LTV of this customer could rank fairly high. Without knowing the true lifetime value, how can you identify and retain your best customers?
- Start with a small budget. Ask for a small budget. This will give you a greater chance at getting the project started. Integrate only key data variables first. When you have a bigger budget later on, consider adding more information to the database, such as customer-level Web analytics and social media data.
Mu Hu is the director of CRM at Golfsmith International.