For better marketing results, organizations need to optimize their channel strategies
The last few years have seen an explosion in the number of channels and touchpoints that both organizations and consumers interact with. Research suggests that today’s consumer interacts with a Brand across 10–20 touchpoints before making a purchase; this includes viewing social ads, browsing websites, visiting offline stores, and signing up for emails. These touchpoints range from the more established such as print, live TV, Facebook, Twitter, and YouTube, to the new such as TikTok, Instagram and WhatsApp through to the emerging such as Livestreaming and Metaverse.
Channels are also becoming increasingly inter-connected, for example, a consumer can be targeted with an ad on YouTube while they watch TV and have a link to the same product sent to their phone while they browse social media sites. Marketers are expected to contend with all channels and all their interconnections to deliver a seamless consumer experience whilst achieving their targets.
Complicating this further, marketing budgets continue to stagnate, if not shrink. Gartner estimates that marketing budgets have gone from approximately 11% of total revenue in 2020, to 8% in 2021 (Source: Gartner 2021). Marketers are faced with the challenge of delivering more with less.
Marketers are adopting various approaches to tackle this challenge; the two we see most frequently are:
· Some marketers are focusing on one or two channels — usually their proprietary channels in the belief that they have more control over these channels.
· Others are applying a blanket approach across all channels, investing in all channels equally, in the hope that more channels will translate into more conversions.
In our view, neither approach works because they both ignore how customers behave. Different customer segments will engage with channels in different ways. In the first scenario, it is likely that your current customers will see these messages repeatedly, but potential customers may not see them at all. Adopting the second approach is ineffective because cost of acquisition (CPA) for new customers will vary across channel types, as will the drivers for customers’ engagement. A ‘one-size-fits-all’ approach to marketing channel strategy is no longer effective.
Instead organizations need to adopt an omnichannel approach to optimize their marketing funnel, driving conversions and incremental revenue generation. It is advisable that most organizations especially the Consumer Goods sector, maintain a level of presence across all channels but over-index on delivering the right experiences on those that matter most to your funnel and drive conversions.
How can CMOs optimise their omnichannel marketing strategy? Here are 3 key stages to start building an effective marketing channel strategy.
1. Understand your customers and their engagement preferences
Before choosing the channels you want to focus on, a thorough understanding of your audience is critical. This means starting with your customer and going beyond simple demographic data, wants and needs, and price sensitivities. Dive deeper to understand customer preferences and behaviours.
Things we consider necessary, to build a comprehensive view of your customers’ journeys:
· Where are your customers and potential customers most likely to first encounter — your brand or your product?
· Which channels are they using to browse vs make a purchase?
· What devices are they using when they engage with you across each of these channels?
· What is the arrival time of your customers on your channels?
· What type of content are they consuming — both on your channels and elsewhere?
· What is the frequency and number of touchpoints your customers engage with before they convert?
· What is the lag time between each of the above interactions?
The answers to these questions will differ by customer segment and whether the customer is an existing customer. As such, the treatment of separate customer groups and channels may vary.
Optimising content to increase engagement and understanding device usage is critical into getting into the mindset of a customer. For example, there is some evidence that people tend to only use Instagram on their phones but will use YouTube across all devices.
Once you understand your customer’s core values and journey behaviour, you can start to highlight which channels matter to your audience and when.
2. Develop a tailored approach for priority channels but remain agile
A deeper understanding of your customers and their online behaviour allows you to identify which channels resonate most with your target audience. A tailored approach for each priority channel with clearly established business objectives and KPIs then needs to be developed to maximise ROI.
You need to set a clear purpose for each channel, being careful not to blindly track channel performance metrics (e.g., click-through-rate, cost-per-click, and cost per thousand impressions). For example, your website may be centred around ease and convenience, while social media promotes brand storytelling and physical stores are used for experiences and inspiration. Each of these provides a different opportunity to build a personal relationship between the Brand and the customer, and to gather unique data on how to improve that customer’s marketing experience.
Most channels consist of multiple mediums and tactics, and it is important to note that you should rarely have an entire channel dedicated solely to maximizing reach or conversions. Most channels will also contain elements that touch each stage of the marketing funnels, so KPIs should also be established at a campaign level.
Testing content and strategies across channels is a critical part of data collection that leads to richer insight. Being agile and tailoring your approach, based on customer data is the most effective way to target audiences and deliver tangible bottom-line results.
Analysing and understanding channel performance then allows you to iterate your strategy and will drive optimisation of the marketing budgets and provide greater value to the customer.
3. Optimize experiences by leveraging complementary channel strategies
Brands needs a cohesive channel marketing strategy that aims to amplify their messaging across all channels and enhance their funnels. But then this needs to be translated into specific channel experiences.
Each channel will play multiple roles at each stage of the marketing funnel because customers rarely remain within a single channel from their first interaction through to purchase. Hence optimizing across channels is about playing to each channels’ strengths and ensuring that the value chain collectively delivers the business results you need.
Often, we find that the focus is on optimizing individual channels using channel specific metrics and the focus is on outperforming other channels used by the business. They compete rather than complementing one another. When each channel is viewed and tracked in a silo, brands fail to capture the full value of each touchpoint and this can lead to a fragmented experience, which can dilute your brand.
We believe that channels should be optimized to work together and recommend that KPIs focus on each channel’s role in the funnel. For example, similar campaign content may be used on both Instagram and YouTube, but the KPIs for Instagram could be focused on D2C sales and engagement whereas for YouTube they are focused on brand awareness. Your channels strategy should focus on driving seamless channel-to-channel interactions. We find this creates greater customer buy-in, loyalty and advocacy.
Final Thoughts
To conquer the proliferation of channels, organizations need to have a voice that cuts through the noise and resonates with their target customers.
Optimizing marketing performance across channels is not a small side project that a few marketers can take on by themselves. It requires organizations to rethink their entire marketing mix and strategy and therefore must be driven from the C-Suite.
That said, a “big bang” approach is not the answer. Don’t try to change your entire marketing strategy all at once. We recommend starting small and scaling up: identify two or three use cases that would benefit from cross-channel optimization, set clear goals, and determine which metrics you’ll use to measure success. As you deliver these use-cases, ensure that your learnings permeate across all future activities.
