Richard van Hooijdonk

Optimize your channels

During the purchasing process, consumers seldomly limit themselves to using just one channel. They get their information online or from stores, they search comparison sites and check out your competition before deciding where to buy. The product is then delivered by mail, clients receive further instructions through e-mail or telephone. Accessories are bought online or at the store, people browse through mail order catalogues and then browse online to find more information. Orders come in through coupon, online forms, telephone; returning items is done by mail; complaints are expressed by phone. Even the average carpenter faces channel innovation. Returning customers place orders by phone or online. Interested prospects check out the website after viewing an online campaign, which included a zip code application to help them find the nearest store location. Any complaints are returned to the carpenter by phone, personally handled by the service department.

These examples show how many different channels can be used during a purchasing process. Your company attracts clients, informs and advises, places transactions, offers support and generally builds upon the relationship with the client. Consumers don't limit themselves to specific channels, so why should you?

To prevent disappointing your clients, it's important to ensure your channel output complies with customer expectations. Walk through your channels and find out which needs and desires are the most important per channel. Analyzing and optimising your channels and purchasing process phases can lead to significant cost reductions and improvements on return.

'Socialize' your brand, 'connect'!

I predict an end to mass media. For years, I've had the honor of spending millions on television, advertising, door-to-door newspapers, radio and online campaigns. Since 2000 however, many mass media results have begun to display cracks in their armor. We're reading fewer newspapers and magazines, we're watching less television. We spend more time watching and reading what others are doing and writing, we're deciding what
we do and don't want to see, and we've come to trust what other people tell us about brands, products and services. In fact, their opinions have become so important to us, we often base our purchasing decisions on what others say. It's the rise of the social consumers' organisation, placing the power in the hands of consumers. We now have to create a dialogue with each individual consumer: we have to put an effort into building a relationship and we have to become an honest, transparent partner. The client has to believe our brand is accessible, co-operative and listening. The brand and client have to become friends. Afterall, friends are popular: friends are people you'd gladly introduce to your neighbours, family and friends or colleagues. And that's exactly where we want to be.

The structure of 'social branding' submits there must first be a connection between the brand/product and the client. Then, it's up to us to facilitate the relationship between the client and his own network: we provide the tools that allow him to socially share our product or service with the people around him.

Thirdly, we ensure that the network our clients have created can also carry our own 'buzz', such as through virals, communities or consumer generated content.

Fourth, we develop the right tools to allow news and information to spread through the network. Basically, what I describe here is the process of old-fashioned word of mouth advertising. Only now it's automated, optimally using the speed of new media.

Popular tools here are viral concepts based on video or games, but there are more interactive ways to reach large crowds when we also use the loyalty among customers, prospects and fans. Research shows that conversion is a lot higher in these cases, as the sender is now a trusted familiar person. 'Social branding' and 'social marketing' are growing phenomena with impressive results. Kentucky Fried Chicken's first viral, five years ago, reached 193 million viewers and pushed turnover by 6%. Dutch political party SP sent comical videos to 40.000 of its members; a year later, close to the national elections, more than one million people had seen the political videos.

The marketing organisation's DNA will have to be tuned to these important new developments. If over the next five to ten years mass media is virtually replaced by consumers' personal 'content channels', we'll need new techniques and new methods to reach out and touch consumers. Right now, 'social marketing' can already give us excellent results, so long as you keep your clients and fans happy.

Philip Kotler to marketers: 'Don't overlook new media!'

“Reserve at least 10% of your budget to experiment with new media.” Professor in International Marketing, Philip Kotler means business. In the Dutch magazine 'Tijdschrift voor Marketing' (Journal of Marketing), he outlined his personal vision on marketing: “Accountability is becoming more and more important. Marketers don't have to turn into accountants by any means, but they do have to collaborate more closely with sales and finance departments.”

 

Kotler also spoke on the subject of commercials: “While I don't expect them to disappear entirely, television commercials do have a serious problem.” Last but not least, Kotler observed that “people want to contribute: they want to do their part for a better world and the community they live in.”

Website strengthens newspaper experience

TNS Nipo recently conducted a study for Cebuco, the branche organization for Dutch newspapers. The study's goal was to determine how readers experience newspapers' websites. When the newspaper is delivered daily already, what's the website's added value?

 

The study concludes that readers find their newspapers to be up-to-date, informative and pleasant to read. These findings should strike as odd, considering websites are kept up-to-date 24 hours a day instead of just once a day, and reading online is also found to be relaxing, just like reading the newspaper.

 

Besides the latest news, the main reasons for readers to visit their newspaper's website are the news archives, video and sound and the ability to respond to articles. Readers barely replace the newspaper with its online equivalent to save money: in fact, 78% finds that the two add value to eachother and that the combination of online and offline news strenghtens their newspaper experience.

QVC profits soar through business / consumer dialogue

QVC is one of the world's leading direct sellers, reporting a turnover of more than a billion dollars in 2007 and having netted huge profits in previous years as well. One of the secrets behind QVC's success lies in their multichannel approach. Not only does the company use television and telephone channels to create sales, it's also very well-represented through the online website. Among other things, the website serves as an extension for the television shows, allowing shoppers to watch online reruns of shows that previously aired.

 

Another factor in QVC's success is their remarkable use of co-creation. Customers can communicate with the television show's producers and hosts directly through weblogs and chat sessions. The feedback and suggestions that arise from these dialogues are adopted by QVC and turned into specific improvements, for instance on the website itself.

Viewers can call into live broadcasts and ask questions about products on display, or leave product reviews online. A month after the latter option was introduced, QVC's website contained 80,000 customer reviews: a testament to how eager customers are to share their opinions and how well the company's implemented the feature.

 

Even offline retailers benefit from QVC's rampant success. Whenever QVC shows a particular product in its television broadcasts, offline retailers note a product sales spike as well.

Door-to-door newspapers valuable for trustworthy image

In a media landscape with almost endless ways to reach consumers, it's important for advertisers to know which channels to use to communicate with the market. Since consumers are constantly bombarded with commercial advertisements, it is becoming increasingly difficult for advertisers to distinguish themselves from others.

 

One medium that's fallen out of grace among all the high tech advancements, is the traditional door-to-door newspaper. These newspapers lack the glossy look of magazines and lack the modern image of digital media. To make matters worse door-to-door newspapers are usually printed in black and white and delivered only once a week. However, the door-to-door system guarantees excellent penetration within the area of delivery: every house gets one! Publisher Wegener asked Synovate/Interview NSS to interview 24,000 respondents and gain insights into how they experience door-to-door newspapers.

 

For many people, door-to-door newspapers are a useful source of information. Advertisers would do well to realize that the newspapers are seen as credible and trustworthy: they can jump in and use this to create a more trustworthy image for themselves. Also, the local nature of door-to-door newspapers can help advertisers look more involved with local target groups. So maybe this seemingly outdated medium deserves a second chance...

New life for Interrail

Interrail, the train ticket for all of Europe, is expanding to new channels. Interrail originally dates from the 70s of the previous century but now railroad companies are trying to modernize the concept.

 

An online game on InterRailNet.com called RailDance Express lets players travel Europe digitally. In a playful manner, the game informs potential customers how the Interrail system works. Also, Interrail has launched on multimedia platform Europocket.tv with a show centering on continental travel. Europocket.tv viewers follow two reporters travelling Europe with their Interrail tickets.

Creating a multichannel organisation

In order to reach more consumers, many businesses are rearranging their internal processes to better facilitate multichannel strategies. With multichannel strategies, different channels are being used simultaneously to communicate with consumers. The seperate channels are used parrallel to eachother.

The first step towards a successful multichannel business is to properly set up internal processes. It is important to recognize the distinction between a multichannel organisation and a multiple channel organisation. The latter uses multiple channels just like the former, but it doesn't create synergy between different channels. Without proper alignment, communication towards the consumer may vary and it becomes difficult for the company to organize its strategy.

 

To clearly seperate the two organisation styles, one could also refer to multichannel organisations as cross channel organisations. To set up such an organisation, it's important to keep these three steps in mind:

 

·          Analyze the status quo and identify strengths and weaknesses per channel. Use this information to decide how performance should be measured. Create a balanced score card for internal use.

·          Try to establish added value through the use of multiple channels. Have channels add content to eachother instead of repeating the same message across the board. For instance, if a client requests a post order catalogue, send an e-mail to confirm the request. Obviously, the trick is to communicate the right bits of content through the right channels.

·          Analyze consumer behavior and try to benefit from that information by adapting your use of channels.

Centralized management: the key to a successful multichannel strategy

Multichannel strategies are particularly successful when seperate channels are managed as part of one bigger operation. A good example is outdoor products retailer REI. REI uses both online and offline channels to reach consumers. When REI started selling products online, in-store sales rose. Consumers could order their products online and pick them up at a REI store in their area, without paying any additional fees for transport.

 

Often, sales goals don't match up between different departments within an organisation. Companies find it difficult to keep track of products shipped to clients or to seperate stores. In order to keep a functional overview of internal processes and financial data, REI's sales are credited to both online and offline channels. For REI, this approach was key to their multichannel success.