What is multichannel marketing?
Multichannel marketing refers to the practice by which companies interact with customers via multiple channels, both direct and indirect, to sell them goods and services. Companies use direct channels, ones in which the company proactively reaches the customer -- such as physical stores, catalogs and direct mail -- or indirect ones in which they push content via websites or social media, also known as inbound marketing.
Other means of reaching customers with multichannel marketing include mobile devices, text messaging, email, company websites, social media, search engine optimization or GPS to track customers' proximity to goods and services. Multichannel marketing combines the practices of inbound and outbound marketing with the goal of reaching customers on the channel of their choice. In this way, the buying process is more controlled by the customer than the marketer.
Multichannel marketing is based on the fact that customers have more choices than ever in terms of getting information on products. The spread of available channels, including the growth of email, social media and mobile, has caused marketing departments to increase their presence on these channels in order to develop their customer relationship management (CRM) efforts.
The old ways of marketing, such as using print sources, telemarketing and broadcasting on radio and TV are no longer the sole focus of marketing departments. These methods are still present, but they are part of a bigger strategy that includes new media. Marketing strategies evolve along with changing customer tastes and communication preferences.
How to build a successful multichannel marketing strategy
Multichannel strategies are long-term plans meant to establish brand awareness and maintain relationships with prospective and existing customers. The following steps can ensure a successful multichannel strategy:
- Develop analytics. Organizations should use customer data platforms to collect customer data from many sources and perform analysis on it. Analytics enables companies to use customer behaviors and demographic information to determine which customers get which marketing messages. Creating a personalized marketing strategy increases the likelihood of customer engagement and a good customer experience.
- Understand channel preferences. The best approach is to aim to understand which channel a customer prefers. This enables companies to target the right audience with the right content.
- Be consistent across channels. Businesses should devise marketing and other digital marketing campaigns that span multiple channels. Expecting customers to adapt to the company's preferred channel is unrealistic. Companies should also coordinate the online and offline channels they use. For example, keyword testing from online marketing can inform the effectiveness of certain campaigns before they are made into print ads or other advertisements. Coordinating in-store experience with digital channels is also a good approach.
- Measure attribution. Once a multichannel campaign is completed, a company must evaluate performance. This helps companies know which channels were successful and which had the most influence on other channels. Businesses can choose from several marketing attribution models to do this. Knowing which campaigns on which channels lead to the most sales lets businesses determine the effectiveness of their efforts and measure the return on investment of their presence on each respective channel.
- Choose the right platform. The multichannel marketing platform an organization chooses will help it achieve the above objectives. It should provide campaign management capabilities, predictive analytics and marketing attribution analysis.
What are the benefits of multichannel marketing?
The benefits of multichannel marketing include the following:
- 360-degree view of the customer. Feedback from customers helps companies understand what customers expect and how to improve product and service offerings. Companies can adjust marketing efforts and identify which channels work best for certain customer segments and how to target the needs of specific groups. Having a 360-degree view of the customer creates more marketing opportunities and a more personalized experience for customers.
- Competitive advantage. A multichannel approach lets companies identify gaps in competitors' strategies and focus on channels that others do not.
- Better sales management. Companies promote their message through as many channels as possible to collect feedback from different customer segments. Multichannel marketing encourages the use of crowdsourced information, which can help companies assess and improve their performance. This approach ensures resources are used efficiently and can reduce operational costs.
- Greater visibility and more sales. The more visible a message is, the more potential customers a company can attract. Marketing on a single channel reduces the potential to reach the most prospective customers. Companies can use their presences on various channels to mold a personalized image, build a customer following and boost retention and customer loyalty.
Multichannel marketing challenges
Despite the benefits, there are several challenges inherent in multichannel marketing. They include the following:
- Inconsistency. Each channel is unique and has its own requirements for marketing. This can make it difficult to have a consistent message across all channels, departments and brands. Some information may be repeated or lost when there are information silos that isolate channels.
- Uncoordinated technology. Different channels can have different technology requirements and different assets available to them. This can make it difficult to coordinate technology among channels and get proper IT staff and support for all channels. For example, one channel may primarily provide qualitative data, which can be harder to interpret using the same technology that is used for quantitative data.
- Measurement issues. It can be difficult to measure some aspects of the marketing message across multiple channels, such as brand reach, consistency or engagement levels. It can also be difficult to know which channel or customer touch point triggered a response.
Channels used in multichannel marketing
Examples of channels used in a multichannel campaign include the following:
- Email. This is an older multichannel marketing channel. Marketers can coordinate emails with other channels. For example, they can send a follow-up text message to a customer shortly after they have opened an email.
- Physical storefronts. Depending on the industry, physical storefronts can play an important role in customer connection and satisfaction. They can also determine the approach other channels will take to match the customer experience at the physical storefront.
- Push notifications. These are often displayed on a webpage or in a mobile app. For example, push notifications are used to offer rewards for purchasing something in a specific time frame.
- SMS messages. Companies can send customers SMS or text messages that advertise deals or updates on something they previously indicated interest in on another channel.
- Podcasts. Podcasts are a way to extend advertising to an audio format, similar to traditional radio ads.
- Social media. Listening tools that track what people are saying about a brand or product on social media can be used to aggregate customer feedback and integrate it with a CRM platform. Sentiment analysis can also be used to derive insights from customer input on social platforms.
Multichannel marketing examples
What follows are two real world examples of multichannel marketing.
This company's application enables short-term vacation rentals. Vrbo tailors its website and application experience to work on multiple devices and meet customers where they are. It distributes user generated content -- like pictures and reviews of vacations booked using the app -- across social media platforms to appeal to prospective users and raise brand awareness.
Vrbo serves social media users targeted advertisements using search query information carried across platforms. If someone searches for vacation information on one platform, Vrbo can use insights from that search to serve an advertisement at another time. Doing this increases brand reach and improves customer retention, reengagement and brand loyalty.
CVS aims to replicate the in-store pharmacy experience through its web and mobile applications. Customers can check and fill prescriptions, register for COVID-19 services and handle other shopping needs on the platform. The application has an online chat function that lets customers speak to a pharmacist. Customers can also receive in-app notifications and text notifications about their prescriptions. By coordinating digital channels with the physical customer experience, CVS increases brand reach, makes messaging consistent and increases convenience for customers.
Multichannel marketing vs. omnichannel marketing
The following are some key ways multichannel and omnichannel marketing differ.
In multichannel marketing, each channel exists in a silo. Some information is restricted to that channel, and there are boundaries between channels. This creates information silos and inconsistencies across channels. It can force customers to have to repeatedly provide or view the same information. Customers are then left with the impression that the organization has a limited understanding of the customer journey.
Omnichannel marketing is an evolution of multichannel marketing. It removes barriers between channels and eliminates information silos. It does this by carrying information about the customer -- and for the customer -- between channels, so that the same information is available on every channel. As a result, there is more consistency across channels in terms of the information provided, the branding and the feel of the experience.
Omnichannel marketing also reduces repetition across channels. The omnichannel environment retains customer behavior across channels and along the customer journey. If a customer starts in one channel, they do not have to repeat steps or view redundant information as they switch channels. All the channels are equally aware of customer behavior and provide a coordinated, seamless experience. This information sharing also gives organizations a better understanding of how customers behave and their preferences.
Learn about four best practices for customer data collection that satisfy both business and customer needs.