What Is Omni-Channel Marketing?
Thursday, November 17, 2022
So you will have undoubtedly heard a lot of noise around Omni-channel (or omnichannel, you choose!) this year, and in my opinion, rightly so.
It may feel like the latest in a whole host of broader ‘Digital Transformation’ initiatives being undertaken by brands to elevate their performance. Whilst it’s not something wholly new, like many things in the digital landscape, its presence and adoption has been expedited by the pandemic, the impact of global consumer data privacy regulations and third-party cookie deprecation.
As we’ve been speaking about this with a number of clients, I thought sharing a guide might be of value – so here goes…
What is Omni-channel Marketing?
Omni-channel marketing is at its core, a customer-first methodology; achieving a positive, personalised and seamless experience throughout all points of the customer journey, be that online (website, social media, app, email, SMS etc) or offline (physical retail outlets/stores, call centre, events).
It is intrinsically linked to integrated and centralised data – primarily customer, product, sales and marketing related analytics. In essence, each interaction, and across every channel touchpoint a customer has with your brand, should be a continuation or development of the previous one.
The intention is to create an appealing, value-added, cohesive shopping experience for customers no matter their path to purchase. We all know from our own buying experiences how many different routes we take across the inspiration to consideration and comparison phases of a purchase. That may be seeing an ad on social media on your phone, to Googling the brand on your laptop, comparing reviews, and then visiting the store before purchasing.
Our shopping behaviours blur on and offline more frequently than ever before. With so many channels in which to interact with brands, it is impossible to map an ‘average purchase path’. Whilst brand loyalty is at an all-time low, those businesses who can engage customers effectively and truly add value through a personalised and relevant experience can build brand advocates which ultimately lead to repeat custom and notably improved average order and lifetime values.
The above is just one example of a buying journey. I also really like Google’s explanation of this in their ‘Messy Middle’ writing (find more here).
My point is that an omni-channel approach stitches together all these interactions, whilst a more traditional multi-channel approach treats the customer independently on a channel by channel level without cohesion in messaging. In each channel you are almost a new customer (for the most part) and brands aren’t utilising your behaviours to influence what products, messaging, creative, promotions or offers you see in a cross-channel capacity.
The omni-channel principle is built upon the automatic updating of underlying data in a single customer view based upon interactions across channels, then using this to tailor marketing and communications to your preferences, actions and needs. Essentially, breaking down the silos to maximise relevancy.
It is also important to highlight that omnichannel isn’t just a marketing play, but a much deeper and more involved solution across customer services, who can also share and utilise the insight in their customer interactions.
The difference between Multi-channel & Omni-channel?
To begin, I would stress that there is absolutely no issue with using a multi-channel marketing approach. Currently, it is the most utilised strategy and serves many businesses well. It is when we begin to look further into the future with both recent and impending changes in the digital marketing landscape, that we can view flaws that will begin to become more apparent and impactful.
It is equally important to note that the shift represents no small implementation and management feat, such is the level of technology required and the internal reach it must have across a business’s systems, processes and data.
There is often confusion about the difference between an omni-channel experience and a multi-channel experience, which can be distinguished simply as the level of, or lack of, integration between the channels, platform and data a business uses.
Ultimately, all omni-channel experiences will use multiple channels, but not all multi-channel experiences are omni-channel. Make sense? Maybe it’s easier to visualise it…
Or if you’re more of a fan of tables:
In a multi-channel environment, a user has available access to a variety of communication options and platforms that aren’t necessarily connected or in sync. Within an omni-channel experience, however, consumers can move through channels seamlessly.
This doesn’t mean that in a multi-channel approach you can’t have fantastic user experiences, engaging campaigns or effective activity, it simply doesn’t have all the dots linked. A multi-channel strategy enables customers to access a brand through the maximum number of channels, using these channels to increase engagement. And through this approach, the more engagement, generally the better.
An omnichannel strategy on the other hand, is absolutely focused on the customer as an individual. The system, process, data and approach favours strengthening customer relationships holistically, linking its channels in a way that unifies, and genuinely personalises each customer’s experience.
Without true integration, a multichannel approach can sometimes lead to inconsistencies and customer frustration as they aim to move across channels and internal departments. Often it feels like restarting a level, or taking steps back. We’ve all been that loyal customer that calls customer services to find they don’t know a thing about us, or been served an advert or sent an email after already taking an action, encouraging us to immediately do the same (no thank you brand X, I don’t need another case of beers after just buying one from you!)
Why it matters?
Immediately, I would hone in on how effective an omni-channel methodology is at building familiarity, trust and loyalty among customers. We’ve all heard the old adage that the cost of acquiring a new customer can be five times more than retaining one. Some valid reports show that increasing customer retention by just 5% can boost profits three or four-fold.
There is a level of personalisation that can only really be achieved by omni-channel marketing, and the more relevancy you can provide, the better customers respond to it. They are more likely to purchase more and return more frequently, maximising their lifetime value.
In a cookieless future world, first party data will never be more important, particularly as ads giants continue to push the increased use of automation and AI in their platforms. So not only is it hugely beneficial for customer retention, but also increasingly important to the success of customer acquisition activity.
Without a doubt, it has a competitive edge over multi-channel in most instances. A recent article from econsultancy highlighted how omni-channel retail is bringing online expectations into offline settings. Expectations of consumers are at an all time high, so delivering a differentiated experience will always hold an advantage.
Research by omnisend outlined that engagement rates for omni-channel retailers were three times higher than in multi-channel counterparts, with order rates close to five-fold higher in associated campaigns. The insight also reported a 90% higher retention rate than those using single-channel campaigns.
A summary of some of the ‘why’s’ are below:
Addresses the continually complex ‘messy middle’ of the buying journey head on
Enables a genuine ‘customer-first’ philosophy – a differentiator & now expectation
Expedites the consumer data learning to action timeline
Allows brands to move with more agility & speed, more intuitively & automated
It makes new testing smarter, less risky, and more scalable across key aspects of the business (not just marketing)
Allows a brand to be more relevant & offer personalised customer experiences
Gives a unified view of customer interaction across customer experience, marketing/brand, ecommerce, data/analytics and product teams
What are the benefits?
So what are the real advantages, other than what has been highlighted above? Well, at a basic level, these could be grouped into:
Increased profits – more places & opportunities for customers to buy, who spend more, more frequently and are more loyal (and even do some of the marketing for you)
Increased ROI – in a more friction free environment, people are more likely to buy, simple.
Increased visibility – through maximising the channels it uses cohesively
Development of new target groups– with a greater footprint and a data-centric approach new target markets can be identified and tested quickly and cost effectively
Greater customer satisfaction – enabling deeper and more satisfying connections with your brand
Improved data and integrated marketing analytics – with more connected data sources, the customer view is much more 360, which can be utilised in marketing activity to drive performance metrics
Improves efficiencies & cross-team comms – saving brands time and money
Is it right for my brand?
A major misconception of omni-channel is that it is a retail only game.
In fact, I’d argue some of the best omni channel marketers don’t sit within that category – ok, so you’re thinking Amazon, and that can’t be argued with, nor can the case for Starbucks being leaders in this field.
Tesco too are also a great example, which has enabled them to easily and confidently diversify their offering across non-retail arms, due to the use of advanced data and the predictability of their customer behaviours. A longstanding friend of mine has been on Tesco mobile for about 20-25 years because his first mobile, purchased by his mum at the time who trusted the brand and took advantage of a clubcard offer. Through the website, clubcard app and his mobile contract they have a detailed and holistic picture of his shopping behaviours and can use this data to email, post and text him relevant and timely offers at times he is most likely to buy, and also offer him insurance and all at competitive prices because they understand the value of him as a customer. Essentially giving him no reason to leave.
In my own experience, I find hotel chains can be great omni-channel strategists. Through a loyalty scheme I am able to collect points through an app based upon night-stays. The same experience is carried across the website and when I go to check-in, the receptionist is exposed to my file, thanks me for my loyalty and offers upgrades to my room based upon my preferences. I can access my room or workspaces and check-out via an app, whilst also getting tailored update push notifications and relevant email offers which even differentiate between my business and personal travel. As a result, 90% of my bookings are directly through this company, despite it being a heavily competitive market. When I do research across aggregators, they simply can’t compete on price or relevance, as the hotel chain measure my lifetime value, not a single transaction.
The most exciting brands effectively using omni-channel are those returning to bricks-and-mortar stores, whilst many leave such spaces due to increasing costs. They focus on being more relaxed and experiential over a hard sell as they understand the wider benefit and overarching value this holds for new and existing customers.
Back to the point in hand though, the main challenge for adoption of a fully-fledged omnichannel strategy is usually data, and more specifically the systems that power this which are often siloed in individual sections of a business (eg, IT, Customer Services, Ops, Finance) or in the case of marketing are often lost to internet giants or tech vendors. This makes it almost impossible for brands to drive things forward.
The most notable challenges are:
It is a challenge to sustain (and maintain)
The need for a fully integrated advanced tech stack & the effective implementation of this
It doesn’t come cheap
It usually requires a change to organisational structure
Even with the above in mind, for most brands it’s something we’d advise investigating to maintain the innovation needed in the more complex future digital landscape.