Converting Single-Channel Buyers Into Multis May Prove Costly

Sep 08, 2008 10:46 PM  By

We know through statistics and stories that multichannel customers are far superior to those who have only ordered from a single channel.

But it’s a waste of time and money to encourage single-channel customers to order from additional channels, to try to turn them into multichannel buyers. Instead, the focus should be on inducing repeat purchases regardless of channel, while ensuring all available channels are well publicized and operating smoothly and efficiently.

The conventional wisdom that single-channel customers should be encouraged to order from additional channels is flawed. This is because the superiority of multichannel customers is driven by their inherent differences compared from their single-channel brethren.

There are several reasons for this, the most important of which is that multichannel customers—by definition—are multibuyers. After all, it is impossible to have ordered from multiple channels without having ordered at least twice. The same cannot be said for single-channel customers.

As every marketer knows, multibuyers generally are much better customers than single-buyers. Multibuyers tend to be more loyal, with higher average order sizes, and by extension, larger long-term values.

Because only a portion of single-channel customers are multibuyers, they will not in general match the subsequent overall purchase volumes of multichannel customers. And, there are no CRM strategies or tactics that will change this reality. Therefore, by extension, it is naïve to think prodding single-channel customers to order from additional channels will increase their intrinsic interest in your company’s products or services.

Jim Wheatonis a co-founder of Daystar Wheaton Group.