Fact: Customers who engage with a marketer through multiple channels have higher response rates, increased average order values (AOVs) and better lifetime values (LTV).
That cross-channel relationship should begin during acquisition. The most effective acquisition contact strategies not only reach prospects through their preferred media or channels, they also engage them at each point of contact.
Just as marketers must balance overall acquisition and retention efforts to maximize total sales volume and profitability, it’s critical to achieve the optimal blend of engagement-enhancing sales channels, strategies and tactics within the acquisition or front-end marketing budget.
This is true for all multichannel merchants, but those that began as catalog-only marketers, in particular, may need to focus on creating an optimally effective, cost-efficient master contact plan in the acquisition realm.
The building blocks are ongoing testing, meaningful, long-term measurement; and marketing coordination. Here are some key strategic points relating to these foundational elements.
- Testing: There’s no better investment
Having sufficient testing history is always a major strategic advantage — and never more so than when the economy goes sour and we have to trim acquisition marketing budgets and focus on the tactics proven to be most productive. If your organization could use improvement in this area, carpe diem, and you’ll be in a better position by this time next year.
Scrimping on testing budgets is a false economy. Most successful marketers allocate roughly 15% to testing.
You might ask, 15% of what? Good question. Depending on what the tests are addressing, it might be 15% of total circulation,15% of total marketing spend or 15% of acquisition spend.
Be sure to “normalize” testing expenditures — that is, anticipate and calculate the new-customer revenue and costs that would come into play in a rollout scenario. Testing needs to be continuous and thorough. Are you testing seasonality, mail-drop timing, offers, types of contacts, frequency of mailing, multiple channel contacts, QR codes and social marketing?
Testing timing and frequency within channels and in combination is particularly critical. Nearly all marketers have seasonal patterns, and for businesses that rely heavily on success during the holiday season or specific holidays, having the testing history to plan the optimal strategy for factors such as national elections, late Thanksgivings, early Hanukkahs and weekend Christmas days can be a make-or-break.
Going further, there’s much to be gained by using testing to determine “cadence” — meaning what marketing contact frequencies (daily, weekly, biweekly, etc.) yield the best results by segment, time of year and channel/cross-channel efforts.
If converting catalog inquiries or gift recipients is crucial to your acquisition program, you certainly need test history in these areas to identify and concentrate on tactics with proven success records.
- Measure and manage
Multichannel marketing has changed acquisition (and retention) strategies radically, but it’s also made benchmarking and applying metrics analysis to all that we do more essential than ever.
Today, a given marketer is likely to be using more than just mailing lists, cooperative lists and space advertising. It will also use email marketing, web marketing (meaning developing the brand site as a real marketing channel through search engine optimization vs. treating it as an ordering vehicle for catalog recipients), online advertising, social marketing (including Groupon and all of the group-deal clones), mobile marketing, affiliate programs and more.
Since each of these channels has different performance metrics, the only way to optimize the marketing strategy is to establish a culture in which those in charge are making acquisition and other marketing spending decisions based on hard analytics.
One of today’s biggest challenges is determining whether emerging channels within the increasingly fragmented array of options, such as Facebook and Foursquare, are currently worth the investment, or are just drains on the marketing budget and the marketing team’s time.
At minimum, for each channel, you must analyze average cost per new customer, contribution rates, repeat purchase/retention rates, referral potential, channel migration and lifetime value. Also be sure to measure web incentive efforts and other levels of engagement within the entire lifecycle of the newly acquired customer.
In other words, metrics for newer channels must be intelligently adapted and expanded to build on the classic method of calculating the cost of acquiring a new customer. Do this by taking the combined front-end cost of sales and dividing it by the number of new customers acquired during the designated period.
(Some companies include marketing salaries and related general and administrative expenses in costs, but it’s also useful to look at acquisition without overhead costs.)
To realize the true benefits of measure and manage — that is, to measure overall, blended customer acquisition costs — you will need external software support or some heavy-duty data analytics from your team.
One option: Investigate available software packages that can assist with measuring/analyzing the sales/profitability contributions of digital acquisition channels, including social media, search-engine and pay-per-click marketing, and website performance.
- Sync your marketing messages, offers and timing
Testing and measuring acquisition efforts are key, but the coordination of the content and timing of contacts across channels is the linchpin of successful blended strategies.
Regular meetings that include management and all key team members who are contacting prospects through various channels (mail, web, email, search, social, mobile, etc.) enable explaining and reinforcing the importance of leveraging multiple engagement points in a coordinated fashion. Achieving understanding and consensus among management and the marketing teams about channel and selling-point emphases and interaction will result in a stronger acquisition program.
Given that a growing number of acquisition emails are being read on mobile devices, it’s particularly important to involve the mobile marketing team in the process. Smartphones — expected to represent 55% of total new phones purchased this year — are changing how potential customers read marketing messages.
Keep in mind that the mobile channel gives recipients new options for controlling where and how they engage with email and text messages — which alters all of the acquisition engagement “rules.” For this reason, you need to view mobile quite differently from other channels, and monitor and measure it carefully.
Bottom line: Marketing as we know it is changing fast. So you need to focus on the right blend of customer acquisition strategies and tactics to boost engagement and results for your channels to succeed in today’s multichannel marketing environment.
Ken Lane (firstname.lastname@example.org) is senior marketing consultant at multichannel marketing/creative agency J. Schmid & Associates.
For more from Ken Lane on cross-channel customer relationships — and other MCM videos — visit our YouTube channel at http://www.youtube.com/MultichannelMerchant