Executive Forum: Make the Most of Every Channel

A promotion in one channel catalog, Website, or retail may spur sales in another

U.S. Cavalry’s stores feature free catalogs, kiosks with Internet access, and signage promoting the company’s Website.

Managing a multichannel business in today’s competitive environment can be a tremendous challenge. While additional channels provide more opportunities for generating sales, they also incur additional expenses. Thus, we face a double-edged sword: We have multiple channels, but we now have to decide where to allocate our marketing dollars.

To get the greatest return from our marketing investments at U.S. Cavalry, we found it essential to concurrently market within and across every available channel. For example, we recently promoted our overstock (which is pooled from all three channels) within each channel through retail advertising, catalog mailings featuring dot whacks, and banner ads advertising the sale.

As a result, we cleared out most of the stock within 30 days, and all of it within 90 days. If we had promoted the sale in only one channel, it could have taken us years to get rid of it all. Consequently, while we do not allocate a certain percentage or dollar amount to each channel (since promotional costs vary widely by channel), we strive to carry all of our major promotions across channels.

If you are unable to market in every channel simultaneously, select the channel or channels that will service you the best and ensure you are getting the most response for your investment. For example, if you have a tight time frame, it is often quicker and more efficient to do a promotion online and skip the promotion in the retail venue. Or the timing may make it impossible to make print-run changes in your catalog.

Also, particular product categories may work better in certain channels than others. Clothing sells better for us online, while bootwear works best in the catalog. So we would tailor our promotions accordingly. For example, if our goal is to boost sales of boots, we may want to devote more resources to the print promotion of bootwear.

The important thing to remember is that whether you are flush with marketing dollars or operating on a shoestring budget, there are affordable channels at your disposal.

For example, a flush retailer might use expensive lighted signs for a promotion, but a retailer on a budget may opt to use an inexpensive marquee or instore fliers. A big-budget cataloger may allocate several pages to a special promotion, but a mailer on a budget may simply add a dot whack to the cover to promote the item. A large Web cataloger may liberally use banner ads on a variety of links, while a company on a shoestring would take advantage of links it has already purchased.

Our Internet history

As is the case with most other multichannel companies, the Internet is our most recent distribution avenue. We first went online in 1995 with a simple informational Website. Visitors could click through and look at a few of the newest products, such as boots, paint-ball guns, insulated gloves, and watches from several of our most popular categories. At the beginning, we offered only six products online. (Today, we have more than 6,000 products available in our online database.) If interested, the visitor could fill out a simple form to request a print catalog. The response started out decently at several hundred requests a month and grew rapidly each month thereafter.

We launched a new Website in 1997, as soon as the technology to secure customer data emerged. On the site, we placed thousands of products, providing search capabilities to make it simpler for visitors to find what they wanted by keyword or by category. Sales started coming in with surprisingly good numbers several dozen orders a day.

Although our entire product catalog was available online, many still preferred to use our Website to request a copy of our print catalog. Before the year ended, we were receiving more than 5,000 catalog requests a month. Despite the cost of mailing print catalogs to online requesters, who could conceivably find whatever they wanted on our site and buy it online, we continued to do it.

We soon realized that not only were we a multichannel company, but we had multichannel customers as well. Researching our customers’ buying patterns showed that a significant number bought from our Website, through our call center, and from our stores. We can study the shopping behavior of both online and direct mail customers as they carry over in both channels, but we currently do not have any way of tracking how many retail customers shop in our other venues.

Obviously, customer retention and loyalty is an essential part of our marketing strategy. Regardless of the channel, good customer service is the key to turning a prospect into a customer, then into a repeat customer.

New marketplace, same rules

Internet growth has given us new ways to reach our customers, but the Web also provides more resources and information, along with new possible suppliers. Most direct marketers have now accepted the challenge of selling their products and services online to gain competitive advantage, to grow, or just to survive.

Many new methods of doing business and getting sales have been tried and tested. For example, in our catalog or retail venue we often test an A/B split mailing in which customer A receives one type of offer (for example, a certain percentage off a purchase) while customer B gets another offer (say, $1 off a purchase). Then we determine which offer was more effective. For our stores, we might color-code coupons according to where the catalogs or direct mail pieces are distributed to see which locations are more effective.

Regardless of how we reach our customers, the basic rules of marketing have not changed. The consumers are still in charge. They will choose not only what they buy, but also from whom they buy it. In addition, it is important to realize that they choose how to do business with you via telephone, mail order, or the Internet.

We strive to maximize market penetration by using every channel to promote our products and services to our target market: 91% are men, most between the ages of 18 and 54, with an active outdoor adventure lifestyle. The majority have either an interest in or affiliation with the military. Here are just a few examples of how we market to them via our various channels:

PRINT CATALOG: Now in its 28th year, our print catalog has been instrumental in building international brand awareness. We know the catalog is a strong marketing tool with a long shelf life, typically more than one year in fact, customers often call us to order an item from a five-year old catalog. Also, customers will often walk into one of our retail stores looking for an item they had seen in the catalog.

Consequently, it is important to understand that the catalog is a sales tool and not simply an isolated sales channel; it can be the ultimate call to action in any of the channels. We experience a big surge in phone calls and Internet orders shortly after the catalog is dropped. So we need to make the print catalog easy for our customers to shop from.

For example, every front cover clearly displays our toll-free order number and Web address. Inside, the president’s letter highlights our newest products and services and announces the newest features on our Website. To avoid making the customer search for contact information, each spread has a footer that carries our toll-free order number, our customer service number, or our mailing and Web addresses.

STORES: We use the signage in our stores to promote our catalog, Website, and contract sales division. In one of our stores in Radcliff, KY, which is next to a busy intersection, we have a uscav.com sign in the window facing the stopped traffic. We also have an Internet kiosk in each store, allowing customers to order from the additional online inventory without leaving the store. As an incentive, we offer free standard shipping on all kiosk orders.

Customers can also pick up a free catalog and sign up for our mailing list, or even sign up for opt-in promotional e-mails. Throughout the year, we use printed fliers as handouts and bag stuffers to promote upcoming sales and special events at the stores.

WEBSITE: Since we are not restricted online by a limited number of pages as with a print catalog, we offer a much larger selection of products on our Website. We use promotional gift with purchase items typically products that retail for $15-$29 as incentives to encourage online ordering as well as to increase the order size. (Customers need to spend a minimum amount to get the gift.)

The Website has also added many features to make online shopping experiences quick and easy. For example, our Catalog QuickShop feature allows a customer to go online, enter the item number, and add it to his cart in just two clicks. On the site, we also provide maps to our stores with their hours and telephone numbers. Customers can join our opt-in e-mail list and be among the first to learn of new products and special offers, and receive exclusive promotions. They can also request a free print catalog, buy overstocks, search for gifts by price, and join our affiliate program.

Don’t go it alone

Multichannel marketing is still a brave new world for many companies, so it’s important to seek help and support in managing the newer channels or the operation as a whole. Hiring consultants or agencies can help, but you can also learn from talking to people from other companies who are in the same boat. Interacting with other marketers can save you valuable time and resources because they may share information that helps you avoid repeating their mistakes.

Joining professional organizations and industry trade groups can also help you navigate multichannel challenges. For example, U.S. Cavalry is a charter member of Shop.org, an Internet retailing trade group for both virtual and conventional retailers, catalogers, manufacturers, and companies providing products and services for online retailers. One benefit of Shop.org is a member survey by Boston Consulting Group, which compiles sales and growth rates trends for the group while keeping individual members’ data confidential. If this information can help me understand how it affects us as a group, then I can determine what worked and what didn’t and where to spend my money the next time.

For the most up-to-date industry news, check out Catalog Age online at www.CatalogAgemag.com.

You can also register online to receive Catalog Age Weekly delivered to your desktop every Thursday morning.

Sam J. Young is senior vice president of marketing for Radcliff, KY-based U.S. Cavalry, a multichannel marketer of law enforcement, military, and outdoor adventure gear.

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