The recession has increased the importance of effective cross-channel marketing.
Published by 1to1 Media
Written by Mila D'Antonio
The shift in marketing budgets from traditional channels to digital channels will continue to rise this year, according to a recent report from ExactTarget called "2010 Marketing Spend." In fact, 66 percent of marketers surveyed reported that they will increase their digital marketing budgets
The report is among a mounting list of evidence that multichannel marketing is moving to the forefront in organizations. Fueled by the recession and the rise of social media, companies are increasing their budgets and shifting their resources to focus on multichannel, with the goal of delivering a consistent experience to customers.
Mark Fodor, CEO of CrossView, explains that if companies don't obtain a single view of their customers, they cannot effectively market to them. "A lot of retailers are disappearing," Fodor says. "The recession has forced consumers like you and I to be more selective. If we are not getting a good experience, we are looking elsewhere for that good experience."
Unfortunately, the same challenges that plagued organizations during the past decade and kept them from achieving true multichannel integration still loom today. Data silos, organizational misalignment, and ailing infrastructures are the typical culprits in blocking channel integration.
"With the rapid acceleration of channels, what is perceived as an opportunity on one hand is frustration on the other hand," says Jeff Chamberlain, vice president of product marketing at Aprimo. "The pressure on the marketing department has intensified to prove ROI, and it continues to be a big challenge to manage that with all the new channels."
CrossView's Fodor advises companies not to integrate all channels at once, but instead take a phased approach to a cross-channel strategy, integrating one touchpoint at a time into a marketing platform. "Cross-collaboration needs to exist," he says. "At the end of the day, you can have the same promotion, but if the customer starts in one channel and then gets something else in the store, it's a fragmented experience."
Vineyard Vines gets a cross-channel view of customers
Vineyard Vines, a specialty apparel retailer, started to address its cross-channel challenges in 2007 when its nine retail stores, catalogs, contact center, and Internet operations grew so rapidly that company executives realized they needed a platform to manage it all. In addition, they needed a way to analyze and leverage the data flooding in from the channels. "We wanted [customers'] preferences in one place to make shopping easier, and so we can have a clear picture of our customers," says Dave Ruback, director of IT.
In 2007, Vineyard Vines deployed CrossView's cross-channel solution. Then in a phased approach, starting in July 2008, the retailer integrated the contact center and then the website in September 2009. "Quite simply, we rolled out this system in phases because it made the most sense strategically based on our available resources," says Lindsey Worster, director of brand communications. The last channel—the POS systems—will be integrated this summer.
Ruback says the marketing team concentrates on consolidating customer information across channels and sending communications with offers that match customers' preferences and shopping history. One of the goals is to encourage customers to use different channels. "We feel there's value in turning customers into cross-channel customers so we can target them a multitude of ways," Ruback says.
For example, online shoppers are presented with in-store offers and retail store shoppers receive coupons to shop online. While Vineyard Vines has yet to calculate ROI, the retailer expects these changes, as well as improvements to the Web store will increase customer satisfaction and sales, as well as accelerate time to market. "From a loyalty perspective, as we grow, we definitely want to make sure they're getting a great experience that is consistent," Ruback says.
TNA Wrestling relies on multichannel as a differentiator
TNA Wrestling, which launched in 2002, wanted to deliver a consistent experience for its customers from day one, and needed to stand out from its competitor WWE. At the start, TNA was focused primarily on building its database and employed a few vendors that sent out SMS and email blasts to promote its events to its opt-in customers.
Soon after, however, TNA increased its promotions to include corporate initiatives, television air times, pay-per-view specials, and live events via Twitter, Facebook, emails, text messages, its website, and television ads.
Dan Stevenson, director of marketing at TNA Wrestling, says the database quickly grew beyond what the vendors could handle. In addition, he says, the company wanted to bring all marketing outreach under one roof and start using geo-targeting to reach the right customers for communications like invitations to attend live events. "It's a lot of different communications points to hit our consumers and we looked for a way to control it and bring it in-house," Stevenson says.
A year ago the company began using Knotice on-demand software to power a direct digital marketing strategy that spans email, mobile, and Web channels. Today the company markets to 80,000 customers in its email database and 100,000 in its text database, and the messaging is consistent across channels and targeted based on geographies. "We're seeing a lot of results like knowing who the fans are versus a broad stroke that radio and TV gives," he says.
Stevenson reports an increase in the attendance at live events and a jump in television ratings, as well as a rise in website traffic, since improving its multichannel marketing efforts. He says the company's growth strategy will focus on sending customers the right messaging. As a result, he plans to see even greater attendance, an increase in pay-per-view buys, more merchandise sales, and higher Web traffic in the near future.
Grupo Posadas tracks 5 million records across channels
With more than 100 properties in South America under seven brands Grupo Posadas amassed five million customer records, but had no way to analyze or leverage all the data.
David Rebolledo, loyalty program and CRM manager at Grupo Posadas, says that during the past four years the company has evolved from a product-focused organization to a customer-focused one. That transformation required new tools that would help leverage its customer data to improve the customer experience. In addition, when Grupo Posadas sent various marketing communications to customers, the company didn't know which was the most effective in driving revenue. As a result, it was becoming difficult to encourage repeat bookings. "The thing that we had to solve was 'how we can use the data to improve the customer experience in our communications and hotel…in every single point of contact with them,'" Rebolledo says.
With the help of Neolane, the hotelier now automates its email campaigns, personalizes the messages to a variety of segments (e.g. high-value customers, most recent visitors), and tracks the results across channels. Grupo Posadas can track whether customers who receive the email offer book the trip through another channel like a travel agency, because the platform integrates all its interaction channels. Customers receive up to four email campaigns per month, which include offers based on preferences indicated in ongoing customer surveys.
In addition, the direct mail campaigns feed off the same integrated data as does email. As a result, marketing now sends the most relevant information to customers, such as special offers for customers' preferred accommodations. Marketing also can track how customers respond to offers via direct mail. The next piece of the strategy includes adopting mobile in the second quarter to send customer surveys.
The benefits so far have been clear: Increased profits in bookings and reservations and a 3 percent increase in customer satisfaction. In the past, email marketing deliverability was 85 percent. Now it's 96 percent. In addition, open rates were 12 percent and now they're 22 percent; click-rates grew from .9 percent to 5 percent; and most important, conversion rates jumped from .1 percent to 1.7 percent. That means for every 100 customers, 1.5 books through an offer.
"We had a bunch of data, but we weren't using it," Rebolledo says. "Now that we are using it correctly we have great results."