Welcome to our newest series, “Cracking the multichannel code.” The multichannel code — the Holy Grail of multichannel marketing success — is something that every cataloger, e-tailer, and retailer should be trying to crack. Many successful multichannel merchants already understand the importance of cross-channel integration, branding, creative, and analytics, but now it’s time to move past the conceptual phase and solve the mysteries involved in putting the ideas into action. This series from the experts at J. Schmid & Associates will offer proven methods for cracking the code and reaping the benefits.
In a multichannel environment, concepts take on multiple meanings. Perhaps no concept is as important to overall multichannel success as that of integration.
In its highest-level form, integration is the bringing together of the major core competencies of your business: marketing, creative, and merchandising. At this level the goal of the integration process is to prepare a strategic marketing plan based on all the available data.
At another level, integration is a marketing function, the untangling and reconstructing of data and transactions to understand what drives sales, how customers are ordering, and where they’re coming from, and then using the information to classify customers in a meaningful way so that you can market to each segment by the most compelling means possible.
Finally, and maybe most important to the health of your customer file over time, is the integration of the customer experience: the positioning of the brand, the way the customer feels about the transaction process, the visuals, the content, all of your company’s touch points. Integrating the customer experience is one of the most difficult aspects of multichannel marketing to manage, but it’s also one of the most important for cracking the multichannel code.
We’ll cover all of these issues in this series throughout the year; today we’ll start with preparing the strategic marketing plan.
Integrating the core competencies
Multichannel merchants have historically built their businesses around silos that had marketing employees constructing the mail plan, the creative team designing the catalog, and the merchants picking the products and guiding the pagination. Finance would build a sales goal; so would marketing, and so would merchandising. They probably didn’t agree.
The culmination of this process was a series of catalog mailings with a deluge of e-mail campaigns thrown in. If you had an e-mail address, you sent an e-mail message to it. Pay-per-click (PPC) programs and search engine optimization (SEO) were concepts that only a few folks really understood. Maybe your optimized keywords weren’t quite right, but still you were in the search game. It was simple, if not completely effective.
The integrated multichannel merchant, however, builds its programs by working in teams to make sure the right number of e-mail campaigns supports the right number of catalog mailings featuring the right product assortment in the right number of pages at the right time to the right audience. It ensures that the messages conveyed in PPC programs are consistent with the brand overall and that retail efforts mirror catalog efforts.
The integrated multichannel merchant flights its marketing communications to get the greatest response and drive maximum sales while producing the minimum required profits. The integrated multichannel merchant has a Website that makes order conversion top priority by making the shopping experience quick and painless and by building on the key branding elements of the parent business. And the integrated multichannel merchant makes every effort to capture source codes from every channel.
Getting there isn’t impossible. It starts with a meeting of the minds: creative, merchandising, and marketing. All must come together to discuss the business, the goals for the coming year, issues facing the company, and opportunities that are ready to be seized. These teams should arrive ready to decipher what has happened and how to improve on the results.
From a functional standpoint, the teams should come prepared to discuss and make recommendations on creative execution, marketing strategies, merchandising selection, and overall branding.
The creative team should come to the strategy meeting ready for a comprehensive critique of the catalog, the Website, the e-mail campaigns, the PPC ads, the in-store marketing materials, and any other marketing vehicles that were used during the campaign period. It’s important to address several key questions, including:
- Are the pieces brand relevant and customer relevant?
- Is the creative presentation consistent across channels, supporting a customer experience that is also consistent and builds across channels?
- Are the customers’ questions being answered by way of the creative presentation across channels?
- Does the creative do a good job of presenting the benefits of the company and its product assortment?
- Do the various channels support one another?
- Where can we make improvements?
The marketing department takes the brunt of the analytical onus. This team should come to the table with a comprehensive marketing review of what happened during the season or campaign and why, across all activities including catalog mailings, e-mail campaigns, customer acquisition, and customer retention efforts.
Through its efforts, marketing should be prepared to address the following questions:
- How did the segmentation perform?
- Could the file have been mailed deeper? More often?
- How did segments receiving e-mail campaigns perform vs. those that received catalogs only?
- What was the cumulative effect of the marketing program by segment? Given all of the marketing efforts, was overall response up or down? Was overall customer retention up or down?
- What were the retention and acquisition results? Did you keep and acquire more customers than you lost during the season?
- What offers and promotions worked, and how might they be shifted to create greater lift in the future?
- How did channel performance shift, and what are the implications?
- Did any customer acquisition efforts shift the composition of the buyer file? Has the profile of your typical customer changed?
The merchandising team should come with a full square-inch analysis of all the products shown in the catalog, as well as of those shown online only and featured in e-mail campaigns. While it’s difficult to untangle some of the data points surrounding what drove a sale, you can conduct some top-line analyses. In the merchandise review, the merchant team should speak to and make recommendations based on the following questions:
- What were the best and worst sellers?
- What were the strongest and weakest product categories?
- How did price-point shifts affect results? Orders? Average order value? And what were the strongest price points?
- Was the page count optimized for maximum sales and minimum profits? How many pages should the catalog have?
- Based on product sales, what new items are planned for the assortment? Any new merchandise categories or line extensions that the marketing department can use for list rentals and the creative team can use for the catalog’s visual presentation?
- Which products, categories, and price points performed best within promotional e-mail campaigns?
- Which items generated the greatest number of initial returns?
- Which products led to the greatest number of nontransactional exits from the Website?
Every company should have a brand champion — a director or a manager with influence to protect the brand and what it stands for. At the same time, each and every employee of the multichannel business should be a brand advocate, owning and fostering the brand identity through product, message, creative presentation, offers, and a unifying customer experience. All members of the creative, marketing, and merchandising teams should come to the strategy meeting prepared to discuss and address the following questions:
- Who is the customer?
- How does the customer interact with the company’s brand?
- How should the brand evolve over time to make accommodations for changes in customer attitudes?
- How would the brand’s evolution affect marketing decisions, the catalog’s creative presentation, and the overall merchandise assortment?
|All together now|
By bringing the core competency teams together, you address the broader issues and give everyone the tools needed to create sustainable change. And this can have a profound effect on your business.
When merchants know how marketing is shifting the acquisition plan, for instance, they can make adjustments in price points sold. When the creative team knows how the merchants are expanding on high-margin product lines, they can make adjustments in presentation techniques to address higher-order benefits. When marketing understands how the brand is evolving it can build acquisition programs from the point of view of a customer coming to know the brand for the first time.
The integration of all the core competencies is one aspect that makes leading multichannel merchants such as outdoor apparel and home goods legend L.L. Bean and food gifts and horticultural products purveyor Harry & David so good. And it’s the integration of the core competencies that make up the first step to cracking the multichannel code.
Steve Trollinger is executive vice president of J. Schmid & Associates, a Mission, KS-based catalog agency and consultancy.