Channel Shifting: How to Optimize Your Marketing Investment

Jun 21, 2012 1:57 AM  By

Channel shifting is an old concept which is re-emerging with the advent of new technologies consumers use to interact with a brand. Today’s consumers are leveraging these communities and technologies to interact with brands. This behavior suggests that merchants must be proactive in their efforts to create a unified brand presence that transcends channels, platforms, and technologies.

The key value behind channel shifting is to drive consumers from more expensive channels (e.g. contact centers) to less expensive channels (online purchasing or social assets). Organizations should target the ‘right customer’ to the ‘right channel’ to shorten the path to purchase.

By using channel shifting as a level, merchants can identify methods to increase their volume, size-of-purchase, and top-line growth while continuing to reduce the cost to service its customers. This service not only includes the purchase cycle, but also post-purchase support.

Before allocating investment dollars to a channel-shifting project, merchants should consider a two-part evaluation exercise comprising an internal examination of brand, product and channel, along with a customer behavior investigation to determine the “right channel” mix to maximize top-line revenue. Here’s how to optimize your marketing investment.

Evaluate – Internal: Starting with an inward focus, the firm must consider whether channel-shifting is the appropriate approach to drive revenue growth.

  • Understand the brand qualities that should be present in the customer experience (e.g. a luxury brand may pride itself on high-touch customer service and therefore may want to direct customers to retail outlets).
  • Review products that may be a good fit for different channels (i.e. a b-to-b software company has certain products focused on individual purchasers which can be sold online vs. other enterprise-grade products that may need require interaction with a salesperson).
  • Reflect on channel utilization to ensure that potential channel conflicts and cannibalization issues are addressed.

Evaluate – Customer Behavior: To determine the appropriate investment in channel-shifting initiatives, a firm must review and analyze customer behavior across all channels in consideration (e.g. online, offline, social).

  • Understand your customer’s purchase journey (Are your customers utilizing social or online channels to examine products and interact with other customers? Are there purchase barriers?
  • Examine historical customer data in order understand revenue attribution (Can you assign some portion of the revenue obtained to an influencing channel, such as social?).
  • Dissect your customers based on data patterns (Can you group customers into ‘types’ based on the path they take within and across channels? Are you able to identify customer motivations based on the interaction they have with the brand and/or other customers?).

Based on an evaluation of customer behavior and through the use of analytical tools, organizations can start to create target segments that are ripe for channel shifting. These customers can be primary candidates for marketing promotion testing (remember to utilize experimental design techniques to associate causality).

As is the case with all behavior modification, channel shifting requires successive attempts to encourage customers to shift to a less expensive channel while taking care to minimize customer churn. Through this iterative process of testing and retesting marketing promotions, the firm will gain wisdom regarding its customers and channels.

Shamez S. Dharamsi is an associate principal in the sales and marketing services division for data management, middle and back office operational support, and analytics provider eClerx.