Multichannel vs. Omnichannel Marketing: Is There a Difference, and What Does It Mean to You?

By Lin Pophal

Originally posted on EContent.

Perhaps the only thing that changes more rapidly than technology in today’s amped-up digital environment is the terminology used to describe that technology and its impact on consumers–and marketers. One recent example is the advent of the term “omnichannel” marketing, which many struggle to differentiate from another relatively recent term–“multichannel” marketing.

Still, those who are most enmeshed in the field say there is a key distinction between the two, and it’s one that will have an impact on marketers as they continue to seek ways of having a meaningful impact on the consumers they hope to engage. And, importantly, it’s less about technology than it may seem.

WHAT’S THE DIFFERENCE?

Years ago, if a consumer wished to purchase a television, he would go to a local department store, view the various options, and buy a television. As the world evolved, that same person’s purchase decision became informed not just by others (word-of-mouth), but through channels such asConsumer Reports, a print publication that offers reviews of various products. Then came the internet, and suddenly, a whole new world of possibilities emerged. Consumers were no longer reliant on local businesses to meet their needs. The internet allowed them to browse, research, and purchase online.

But the evolution didn’t end there. Enter laptops, tablets, and smartphones. Consumers had multiple options to satisfy their shopping needs. They might choose to shop in-store, or they might shop via a desktop, laptop, smartphone, or smart TV. They might learn of a new product in an email or through a social media post, visit the website on their laptop to learn more, talk with some friends about their experiences with that product, and ultimately use their smartphone to make the purchase-or any number of possible combinations of these.

More options mean more opportunities for marketers to connect with and engage their markets. But it also means a great deal more complexity. Keeping interactions consistent across multiple channels and ensuring a seamless experience for consumers is the new challenge.

It’s the challenge of omnichannel marketing, and it looks more similar to a spiderweb than a racetrack. “The difference between multichannel and omnichannel really comes down to a company’s approach to digital channels,” says Stacy Schwartz, a digital marketing expert, consultant, and adjunct professor at Rutgers Business School. “Companies that focus on maximizing the performance of each channel-physical, phone, web, mobile-have a multichannel strategy. They likely structure their organization into ‘swim lanes’ focused on each channel, each with their own reporting structure and revenue goals.” The result, she says, is competition-which sometimes “serves the greater good and other times generates friction and misaligned incentives.”

That’s where an omnichannel approach comes in. “An omnichannel approach puts the customer, not corporate silos, at the center of its strategy,” Schwartz says. “It acknowledges that mobile and social have enabled customers to not only quickly switch between channels, but actually use channels simultaneously. For example, checking out product reviews on their mobile phone while evaluating a product on a physical retail store shelf.”

In essence, omnichannel marketing recognizes that customers engage with companies or brands in many different ways-across multiple platforms-and grasps the inherent challenge this creates in terms of ensuring consistent experiences. Darr Gerscovich is VP of marketing at Ensighten, a digital marketing agency headquartered in San Jose, Calif. He was recently named a winner of Direct Marketing News 2014 40 Under 40 Awards. “Interpersonal relationships are ingrained so deeply into our social fabric that a customer will view your entire brand as a singular relationship,” says Gerscovich. Omnichannel marketing, he says, “ensures that customers receive a personalized conversation with your brand.”

NEW TWIST ON AN OLD STANDARD

Brenna Holmes believes that the distinction between multichannel and omnichannel marketing is based on a tactical versus a strategic approach, with multichannel reflecting a more tactical effort. Holmes is VP of digital at Chapman Cubine Adams + Hussey (CCAH), a direct marketing agency with offices in Arlington (Va.) and San Francisco. Most marketers-particularly those CCAH serves in the nonprofit world-tend to still be primarily focused on tactical, multichannel initiatives, she says.

Many of her clients, says Holmes, “have a legacy direct mail program that’s integrating marketing communication elements, but they’re not quite at omnichannel yet. They’re just kind of baby stepping toward it.” The concept, she notes, is really not that far afield from the now common focus on “integrated marketing communications”-an attempt to ensure the messages that consum­­ers receive are consistent across all channels. “It’s just another way to get at the same core idea,” she says, noting that “integration is essen­tial for effective, results-based marketing no matter what it is and so some phrases just become more ‘hip’ than others.”

Gerscovich notes that most marketers currently tend to use “multichannel” and “omnichannel” interchangeably. But, he says, “I suspect that, in the coming year, people will be more deliberate” in their use of the terms. In his opinion, the distinctions between the two are significant.

“Multichannel is very much a kind of corporate, or brand, view of the world based on the various channels or touchpoints they’re focused on in engaging their customers,” he says. These might include social media, email, a website, and other traditional means of marketing. The difference, he says, is that while multichannel tends to be based on an inside-out approach, omnichannel is more outside in, a consideration of the customer experience from his perspective. “It’s how a customer would see the world,” he says, “including what they would do, potentially, in the brick-and-mortar space if there is a physical store, how they would engage with a call center, etc.-it brings all of these together; it’s really about connecting the dots.”

AN ‘OUTSIDE-IN’ APPROACH

That outside-in approach is how Tahzoo views omnichannel marketing, says Misia Tramp, EVP of insights and innovations for Tahzoo, a digital customer experience firm. The concept, she says, is really about “understanding how to eliminate effort from the customer experience.”

“That may sound very obvious, but I think it often gets missed,” Tramp says. There is a tendency to consider the many channels available today to connect with consumers as simply more options to be used. That’s more of a multichannel approach. Omnichannel, she says, involves “using data to understand where effort exists in the customer experience and how to remove-rather than add-effort.”

At the end of the day, Scott Houchin suggests that it really doesn’t matter what you call it, as long as your efforts serve to “create a fantastic customer experience.” Houchin is managing principal of eClerx, a knowledge process outsourcing company. It’s an organization of about 8,000 people, he says, and his time is spent in the digital practice working with CMOs and heads of marketing to help them determine how to spend their marketing dollars most effectively to connect with customers.

The idea is nothing new, he admits. “It’s really attaching a definition or a headline to something that world-class brands have been doing for some time.” But, he adds, not all have done this well. The emergence of the digital marketplace has complicated the process, with the challenge becoming one of ensuring a seamless experience across all environments.

OMNICHANNEL AND YOUR MARKETING STRATEGY

At the outset, marketers must have a thorough and accurate understanding of their customers, says Houchin. “It’s really trying to bring that integrated view of what a customer experience is with that particular company’s brand-all the way from how do we speak to them to get them interested in the product or service through how do we bring them to buy something and what was their delivery experience and post-purchase experience. That’s first and foremost.” But then the real work begins.

Importantly, effective omnichannel marketing requires not just the efforts of those in the traditional marketing silo within an organization. In fact, because of the scope of what true omnichannel marketing can deliver, it requires a concerted and coordinated effort across multiple functions. Because coordinating multiple communication tactics and messages can be complex, this is where the real difficulty arises for those truly committed to delivering an omnichannel experience.

All organizations have an opportunity to consider an omnichannel approach to their marketing efforts. From a nonprofit, fundraising point of view, Holmes says, “It’s going to take a lot of bridging of silos internally within organizations to ensure that communications are consistent from social media, to PR, to your policy team, to your fundraising teams.”

Silos are breaking down externally as well, she notes. “We expect nonprofits to give us as good of an experience as we receive from our name brand communication partners, whether it’s Amazon, or our banks, or Netflix, or whatever. We expect them to be just as digitally savvy and to know me-the donor-as a person just as much as Macy’s does when it follows me around the internet.”

Gerscovich agrees that companies will need to break down silos to compete effectively in an omnichannel environment. The steps in the process, he says, are as follows:

  • Collecting data from online and offline sources to identify the myriad touchpoints that exist
  • Breaking down the silos that hinder the integration of all of that data to “really see the customer journey”
  • Establishing patterns of behavior at a granular data. In fact, he says that the process will be more about “small pieces of data than Big Data.”
  • Identifying what you will do, as a brand, to deliver a message that’s relevant at the right time, in the right place, on the right device-as well as through any other encounters the consumer may have with your organization whether in brick-and-mortar environments or over the phone

Ultimately, people may represent the greatest opportunities-and greatest barriers-to creating a true omni­channel experience, notes Houchin. “I don’t think you can overinvest on the people front,” he says. The many points of customer interaction are where failure points most often exist. Addressing these issues is, he notes, more low-tech than technical-something that companies often don’t think about enough.

WHAT LIES AHEAD

“To become truly channel agnostic, a company must invest in the technology, infrastructure, organizational, and marketing changes that allow for fluid movement between channels, such as inventory management, fulfillment, customer relationship databases, staff performance incentives, and messaging,” says Schwartz. “This is hard work, but companies are having success at tackling specific parts of this. This is definitely an approach companies evolve into-not a switch they can flip.” It’s a process, not an event.

“The breaking down of data silos has begun, and I think we’re going to see a lot more of that,” says Gerscovich. Specifically, he says, mobile is likely to be “less of an island.” Mobile apps, he notes, have not been taking intelligence and data from consumer touchpoints to alter the customer experience-yet. That, he says, will soon change. “I think it’s an exciting time for marketers-the challenges have increased, but our capability to deliver on this notion of truly having a one-to-one conversation is actually a reality.”

This new way of thinking is going to involve a combination of organizational shifts and technological insights about consumer buying behaviors with an eye toward a seamless experience across all channels that removes barriers and provides value. “In 2015 and beyond, retailers and publishers alike need to stay consistent in not only just maintaining a presence but delighting and engaging their browsers and buyers on every channel their audience interacts with to stay top of mind,” says Nii Ahene, COO and co-founder of CPC Strategy, a retail-focused search agency based in San Diego.

Importantly, he notes, a one-size-fits-all approach doesn’t work. “Every company has finite resources, and it’s key to understand your audience’s path to engagement, or purchase, to inform where your investments should be,” says Ahene. “Apple doesn’t maintain an active presence on either Insta­­gram or Twitter-not because they are not cool, but because they understand both what makes Apple products shine and how to position them to drive their consumer to purchase. To be successful, given the multitude of product and content distribution channels, a concerted effort has to be made by publishers and retailers alike to understand not only their target market but the mediums where their product can best be differentiated to truly compel their audience to engagement.”

Whether it’s called “multichannel,” “omnichannel,” or some other form of “channel,” as with any other form of marketing, it’s really all about understanding and meeting consumer needs.

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