Multi-Channel Customers, Part 3

The October 8 and November 5, 2007 e-Letters questioned the conventional wisdom that companies should focus on converting single-channel customers to multi-channel status. The problem with the conventional wisdom is "the multi-buyer effect." Multi-channel customers are, by definition, multi-buyers. The same is not true of single-channel customers. Therefore, this multi-buyer status plays a dramatic role in the superior performance of multi-channel customers.

The November 5 e-Letter summarized an analysis we did for a client, where we found no compelling evidence of multi-channel superiority. This prompted our recommendation that, instead of spending time and money to convert single-channel customers to multi-channel status, the client should focus on: 1) providing customers with ample reason to make additional purchases, regardless of channel, 2) making it as easy as possible to do so by improving the accessibility and efficiency of each channel, and 3) publicizing whenever possible the existence of multiple channels.

A great thing about The Database Marketing e-Letter is the responses I get from readers. One such reader works for a company that sells plus-sized women's clothing through the catalog, e-commerce and retail channels. He says that his firm finds it very beneficial to get e-commerce buyers into one of their stores. The famous British economist John Maynard Keynes once said, "When the facts change, I change my mind. What do you do, sir?" In other words, I found the reader's logic compelling for his company's circumstances:

"Fit" is a key consideration when buying women's plus-sized clothing, which is a problem for the reader's company because it does not carry many national brands. The Website provides fit charts, but they cannot accommodate every type of figure. This results in a significant barrier to purchase.

However, an e-commerce customer who tries on clothing at a retail store gains invaluable knowledge about the company's merchandise "fit." This "fit insight" has a synergistic effect on follow-up Web activity. Once a woman has tried on merchandise, she is better able to make informed e-commerce purchases going forward. Thus, a significant barrier to purchase has been eliminated.

Nevertheless, the October and November e-Letters remain valid. Coercing single-channel customers to order from a second channel will not necessarily transform them into better customers. If the nature of your business is such that one channel has a synergistic effect on another, then by all means develop cost-effective ways to encourage customers to try out that channel. If this is not the case, then multi-channel activity will not be the magic bullet that many consultants claim.