Online Meets Offline
By Hallie Mummert
Get your best results ever with channel-integrated campaigns.
In a study of more than 130 retailers conducted earlier this year by Forrester Research for Shop.org, multichannel (catalog, store and Web) retailers reported more than 46 percent of their customers who typically buy online also make purchases offline, and 17 percent of their customers who primarily shop offline also make online purchases.
What's more, 15 percent of offline purchases are influenced by information gathered on the retailer's Web site, according to the study.
This kind of cross-channel information-gathering and purchasing behavior adds a new dimension to direct marketing. Companies are no longer able to consider print, broadcast or retail campaigns as being independent of the Web—or each other, really. Instead, direct marketers are finding that it takes a blend of media to reach their target audience and influence sales, as well as to provide these consumers with multiple avenues for making purchases.
While multichannel marketing requires a good deal of organization to coordinate the timing and content of marketing messages across channels, says John Ganis, president of list management at Edith Roman Associates, the upside is that it tends to produce higher response rates.
According to a 2001 study by J.C. Williams and BizRate.com for Shop.org, people who are more likely to shop through a company's catalog, Web site and store purchase four times more frequently from that company's site than the average online shopper. They also purchase more than twice as frequently from that company's catalog than the average catalog shopper.
A key to successful multichannel marketing is finding the most cost-effective combination and sequence of media.
Ganis, who works with B-to-B companies, notes that many of his clients use a contact sequence of e-mail followed by direct mail. Depending on the product or service being offered—such as a conference registration—e-mail followed by telemarketing is the preferred contact strategy for B-to-B marketers, he explains.
Ganis adds that clients have found optimal results when the two touchpoints are scheduled no more than four weeks apart. However, there's no set rule when it comes to the timing of your follow-up contacts, since the sales cycle for each company and product type can be unique.
Take, for example, Players Vacation Club Inc.: The San Diego-based parent company of Players Vacation Club, My Computer Club and eclubUSA may nurture customer leads for less than a day or more than a year. The clubs allow members to finance purchases on products and services: Players Vacation Club deals in travel packages; My Computer Club sells computers and accessories; and eclubUSA offers a mixture of travel, computers, jewelry, electronics and more.
Leonard Durow, vice president of Players Vacation Club (PVC) Inc., explains that the Web sites of the company's three clubs pull 500,000 unique non-member visitors a day. In 2000, the company was capturing contact information on roughly 60 percent of its sites' visitors, but saw that number drop to about 24 percent over the past few years. Durow suspects that consumers were loathe to provide their personal information out of fear they would be inundated with e-mail marketing pitches from the club.
To work harder at gathering leads from its Web sites, the company decided to use exit pop-under ads that offer visitors who are leaving a site the option to provide their name and a call-back phone number; the club also promotes its toll-free phone number in the ad, so that people who want to talk to a sales representative immediately may do so.
By more actively promoting its customer service call center, Durow says that PVC Inc. has been able to secure contact information on another 1.5 percent of its sites' visitors. Depending on the channel preference of the lead, PVC Inc. will use direct mail or e-mail for future conversion efforts.
The real success of the exit pop-under can be seen in the effectiveness of the outbound call program: Call center representatives are able to convert 35 percent to 40 percent of these leads to club members. In contrast, the e-mail contact option provided to visitors on the site brings in maybe 200 to 300 e-mails a day, Durow adds—but they don't convert as well.
When it comes to PVC Inc.'s direct mail efforts and space advertisements in magazines and newspapers, cross-channel activity continues, but it is harder to track the cross-over from print campaigns to Web response than it is from print to phone response, says Durow. PVC Inc. does not use unique landing pages for its different print efforts, and capturing source codes is difficult; as best Durow can tell, prospects respond to print efforts with phone calls versus Web site visits at a ratio of 4-to-1. Interestingly enough, Durow notes that call center reports indicate prospects tell call center representatives they visited a particular club's Web site for more information before picking up the phone.
Message Consistency is Important
With prospects and customers shuttling back and forth across channels, it's important to carefully control your promotional messages. And marketers are finding that you often have to choose between your need to test and your need to track response.
Since PVC Inc. relies heavily on its current member base for new customer referrals, Durow says the company uses the same promotion across all channels for acquisition, retention and referral campaigns. While it will change its offer from time to time, it does not run different promotions in different channels so as not to confuse channel-hopping prospects or anger current members who see a better deal being made to referrals than they received for joining.
If you keep your offer consistent across channels, it's pretty difficult to test, observes Gary Hennerberg, founder of direct marketing consultancy Hennerberg Group Inc. Even with the use of promotion-specific URLs to drive prospects and customers to landing pages, you still run the risk of people simply bringing up your home page and viewing a different offer.
That's the experience of Rob Carter, vice president of marketing at Soundview Executive Book Summaries, which publishes business book summaries in a variety of media—print, audiocassette, CD and online. He finds that people are getting more sophisticated in their understanding of direct marketing, and realize that they can visit a marketer's home page to get more of a broad overview of the products and services offered. By asking the question "Where did you hear of us?" on its online order form, Soundview Executive Book Summaries sometimes learns that a direct mail effort drove the prospect online.
A good solution to this testing conundrum remains elusive to marketers and consultants alike. The best you can probably do, Hennerberg advises, is to spell out in your e-mail and direct mail campaigns that the offer can be accepted only via the response channels noted in the direct marketing effort—and then let the chips fall where they may.
Track as Much as You Can
As you might have guessed, online response to offline efforts can pose some serious tracking challenges for marketers. If campaign recipients cannot be counted on to consistently use targeted URLs or enter promotion source codes on Web order forms, then calculating the impact of offline efforts on online orders can be mightily skewed.
Durow concurs with this assessment, noting that it's easy for PVC Inc. to track phone response to offline campaigns via unique toll-free phone numbers, and online response to e-mail efforts via targeted URLs (people tend to click through on these links because they're so accessible). But the offline-to-online response pattern remains more of a mystery.
Since you have to allocate your "mystery sales" to some kind of promotional activity, Hennerberg advises marketers to take a weighted average of their unallocated business and apply it across the board to all of their promotional efforts. For example, if 90 percent of your trackable orders for the year came from customers, be sure to allocate 90 percent of the unassigned orders to your customer promotion efforts; the remaining 10 percent can be assigned to your prospecting activities.
While marketers may not be able to account for all of their cross-channel response, Hennerberg's opinion is that marketers cannot rely on any one channel to bring in all of their business.