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E-Marketing and Multi-Channel Marketing: Seamless or Seamy?


E-Marketing and Multi-Channel Marketing: Seamless or Seamy?

In Chapter 00, we considered whether opening up an e-channel for customers used to dealing with a company through branches, mail or call centres meant that the same experience should be offered through different channels, or that the experience should be in some way consistent (eg based on the same set of customer data).

As with all marketing questions, the answer is found through a combination of analysis of customer value, behaviour and needs (for example, how much value do customers have available, what products and services do customers need, how much are they prepared to pay for them, how does the availability of an additional channel change the picture?) with decisions about objectives, strategies and implementation (for example, which customers do you want to serve, how does using an additional channel change the picture, what do different channels cost to use, how can the approach of different channels be combined, what systems and data are required to underpin combining their use rather than using them separately, and what are the costs?).

These are serious questions, and you may really need consultants to help you answer them. However, we should heed the lessons of channel management before the e-age or from its early stages. In many industries, customers are already managed through many channels - for example, physical branches, mail order, telephone, field sales and/or service force. Channels can both complement and compete with each other. The 1980s saw the introduction of telemarketing to support and compete with many industrial sales forces. In most large industrial companies, a relatively stable state now exists, in which direct marketing media (mail, telephone) are used as the main channel of distribution for smaller customers, but also a valuable channel of communication for larger customers. There is often a zone of contention with mid-market customers, sometimes resolved by having specialist tele-coverage operations in which field sales people work closely with telemarketers, the former only visiting when the latter identify the need for face-to face calls.

Interestingly, the least integrated experience is usually that of the largest customers, where many decision makers and influencers are exposed to so many different supplier staff and marketing/sales initiatives that consistency is hard to achieve. However, this is not seen as catastrophic by either customer or supplier - customers realize that they have complex needs and that big suppliers can meet them in many ways. Insisting on an over-structured, seamless experience may lead to opportunities being missed on both sides, and also to customers feeling that they are being 'controlled' by the supplier. 'Why can't I just pick up the phone and talk to anyone in your company?' they might ask.

In consumer markets, the same arguments apply. Most major banks are so worried about branch costs that they are diverting all customer calls to call centres (sometimes dressed up as virtual branches). Customer surveys already show how much customers hate this approach. Despite the advent of branch based 'personal advisers', one of the results has been that wiser, higher value customers know that there is often little hope of talking to anybody sensible in the branch. So they take their most profitable business elsewhere, leaving the bank with the rump transaction business, often so managed by these wise customers as to be unprofitable for the bank (free in-credit accounts, any surplus funds whisked off to a high interest deposit account with a direct bank). If they are referred back to the branch by the call centre, it is often because the call centre can't answer a particular query, rather than because it makes sense (to either party) for the customer to be talking to someone in the branch.

Along come e-mail and the Web. Great, says the customer, at last I can e-mail someone in the branch. This means that I don't have to wait for them to answer, and they can answer my query at leisure - next day is usually fine. But what do customers in many (thankfully not all) banks discover? They can't e-mail some or any of the staff in their branch. Branch staff are often not trusted to e-mail, and they may not even have the systems to do it. For the bank, e = Web, so if customers want to talk to the bank electronically, they have to do it via the Web site, where their experience can be controlled. The branch has no Web site - the customer can only talk to the national Web site. The same is true of many other consumer service businesses.

Surely, however, one of the great strengths of e-mail as a channel is that it allows people to correspond in a controlled, non-invasive way. As government is discovering, text messaging and e-mail might be great channels for communicating with most of the population, as older media simply don't get through. Much better, therefore, to get each channel going in ways that suit the customer (of course cost-effectively), and let the customer show the supplier how they want to use each channel. Wise customers also learn to use the channels that give them the best experience. Of course, customers may occasionally complain about different experiences in different channels, but they already complain vociferously about lack of access. Perhaps marketers ought to be arguing for rich, seamy communication between suppliers and customers rather than a controlled, seamless, multi-channel experience?

Of course, marketers have always dreamt of integrated marketing communications. This used to refer just to outbound messages and targeting - marketers controlling the messages received by different customers through different channels - telephone, mail, broadcast media etc. However, customers pop up in many places through different contact media, and often want to control the dialogue, so even if companies managed to achieve this great consistency, it was of doubtful value to us or to our customers. The Internet brought this home to us, although this was not a new requirement - just one that many companies had allowed customers to express. The idea of the customer-managed relationship (CMR) was not just a consultant's play on acronyms, but represented a real customer need.

There are two new forces at work, however - customers' desire for convenience and our desire for effectiveness (whether pure efficiency or achieving more with less). Take convenience first. One reason for declining customer perceptions of service levels is higher expectations. Variety and speed of access is more important to customers than we thought - whether in the context of sales or service. There is a generation difference too - witness the success of text messaging with younger customers and its likely adoption by government as a prime channel for keeping citizens informed about, eg entitlement. In this world of higher expectations, even if customers concentrate their side of the dialogue into one main channel, they expect to be able to use other channels with equal ease, and to be handled as well in each channel that is open to them.

The implication is not necessarily to make everything available in every channel, which could be very expensive, but to make the best level of service available in those channels that most target customers want to use. This is where the second force - effectiveness - comes into play. For example, in banking, customers may want to use branches not for transactions but social and commercial interaction. However, banks cannot afford to make this available all the time through the branch. Could the same customer need be met by combining a branch Web site with telephone support? Technically, there is no barrier to this, as systems and software are available to support it. The issue is one of strategy, organization and processes.

All this requires a change to the campaign management mindset of direct marketers, who tend to influence decisions in this area. More can be achieved with less if customers experience relevant offers in each channel, and can choose or be helped to choose between them. If these offers come from different departments or product units, then rather than allocating a channel slot to each unit, it might be better to treat the whole multi-channel system as a 'client' for each unit, with the unit marketing to the multi-channel system, and the multi-channel system adjusting offers so as to achieve the company's profit objectives, taking into account customers' needs and propensities.

If this approach is to work, profit targeting rather than sales targeting is required, as this gives the multi-channel system a clear basis to prioritizing offers. Sales targeting tends to promote volume, lower profit and a lower quality customer base. For this reason, in the world of multi-channel customer management, measurement is absolutely critical, and this measurement must be based on profit or contribution, rather than just sales. Companies also need pretty sophisticated software to ensure that the right offers are made (in either the CRM or CMR situation) to the right customers at the right time. Interestingly, the measures must also include risk, and need to work not just overall but for individual branches.


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