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March 25th, 2024
A customer sees an advertisement from your brand on social media, clicks it, and browses your ecommerce website. They add several items to their cart, but don’t finalise the transaction. A pop-up surfaces as they’re about to exit with a 10% discount for first-time buyers. Later, they receive an email reminding them of the items in their cart and the discount they’re eligible for.
This is omnichannel marketing in action: integrating sales channels to create a unified online shopping experience for customers across physical stores, websites, mobile apps, social media, and advertising channels.
On the back-end, this requires businesses to maintain unified customer profiles, real-time cross-platform data-sharing, and the ability to start an interaction in one channel and continue in another without losing context. For example, persistent shopping carts let customers start shopping on mobile and continue browsing on a desktop.
The purpose of omnichannel marketing is to enhance customer satisfaction and ultimately drive sales by providing a seamless experience across every single channel.
Omnichannel marketing vs. multichannel marketing: The big differences
Businesses use multichannel marketing to reach customers across social media, search engines, and other channels. Omnichannel marketing goes a step further by integrating channels for a 360-degree view of the customer.
Omnichannel marketing.
Omnichannel marketing revolves around interconnected channels that offer a unified shopping experience, from customer service chatbots to marketing emails.
Examples of omnichannel marketing include:
Consistency: Maintaining a consistent user experience, brand message, and tone across channels.
Integration: Connecting different channels for real-time data sharing and communication using a customer relationship management (CRM) tool. This includes linking online and offline channels (eg: in-store interactions, user personas, and online profiles).
Personalisation: Leveraging customer behavioural data across channels to deliver content, recommendations, and proactive customer support tailored to individual preferences.
Flexibility: Adapting to evolving technological advancements and being present on customers’ preferred channels.
Multichannel marketing.
Multichannel marketing involves a presence across multiple platforms without necessarily integrating them. Companies might have different strategies or messaging for each channel, often treating them as distinct entities.
Without cross-platform data sharing, customer data remains siloed in individual channels. This makes ad retargeting, email marketing, and SMS promotions less personalised as the customer’s previous interactions with the brand may have occurred across different touchpoints.
Lack of channel integration in a multichannel strategy fragments the user experience.
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Key advantages to adopting omnichannel marketing
Omnichannel marketing provides a consistent, unified customer experience while enabling businesses to win more sales with targeted offers and personalisation.
Enhanced customer engagement.
Through personalised experiences across channels, companies create more compelling and relevant interactions with their audience. Customers are more likely to engage with messaging and product recommendations aligned with their interests, reducing website bounce rate and cart abandonment.
By consolidating data from different channels, brands gain insights into how customers interact across touchpoints. Businesses can anticipate customer needs, identify pain points, and optimise the buyer’s journey to meet the customer wherever they are in the decision-making process.
Increased brand consistency.
By treating all channels as a unified experience, brands offer consistent messaging, branding, and personalisation. Whether a customer engages through social media, a website, an app, or a physical store, customers can easily pick up where they left off.
For example, they can locate and purchase items they browsed on their mobile device when visiting a brick-and-mortar store. Loyalty programmes can reward omnichannel customers for purchases made across any channel.
More personalised marketing.
Data sharing between platforms provides a 360-degree view of the customer, including their demographics data, browsing habits, and digital interactions across every channel. This provides valuable behavioural data points brands can use for personalised marketing.
Examples include:
Which channels do customers prefer to use for browsing/purchasing? Are they different?
Which promotional offers attract the most conversions? On which channel?
How does customer behaviour differ from one channel to the next?
How do customers respond to ad retargeting, website pop-ups, and SMS notifications? Does this increase customer lifetime value (CLV)?
Important metrics for omnichannel marketing success
Measuring the success of omnichannel marketing involves comparing channel performance while also viewing marketing efforts holistically.
Return on investment (ROI).
Return on investment (ROI) measures the revenue generated against the overall marketing investment across channels. Marketers typically evaluate the ROI of individual campaigns in addition to marketing efforts as a whole. This helps marketing teams identify which marketing strategies drive the most sales.
While omnichannel marketing is about unifying every channel, marketers may wish to compare ROI across channels to determine which ones to invest in.
For example, if display ads yield a higher ROI than organic social media posts, the company will devote more resources to the former.
Conversion rate.
Conversion rate measures the percentage of visitors or leads that take a desired action, such as making a purchase, signing up for a newsletter, or completing a form. Monitoring conversion rates across multiple touchpoints helps identify high-performing channels that drive desired actions.
Tracking conversion rates within an omnichannel framework offers insights into the customer journey, highlighting where customers might drop off or transition between channels.
Customer lifetime value (CLV).
Customer lifetime value indicates the total revenue per customer for the duration of the business relationship. A high CLV indicates satisfied customers make repeat purchases and remain loyal to the brand. This lowers customer acquisition costs, providing a source of recurring revenue.
By analysing CLV within an omnichannel framework, businesses can gauge the cumulative effect of multiple touchpoints on a customer's purchasing behaviour, engagement, and loyalty over time.
Customer retention rate.
Customer retention rate measures the percentage of customers that continue to purchase from or interact with the business over a specific time period.
Retention is especially important for subscription- or software-based businesses that charge fees for continued access to a product or service, as profit margins hinge on recurring revenue rather than a one-time purchase. Omnichannel marketing helps retain customers through personalised brand experiences.
Cost per acquisition (CPA).
The cost of acquiring a new customer indicates the efficacy of the business’ overall marketing strategy across touchpoints. Underperforming channels will exhibit a higher CPA because marketing communications are not as effective at converting prospects into paying customers.
Understanding CPA in an omnichannel context involves tracking expenses related to advertising, marketing campaigns, and technologies involved in acquiring customers through various touchpoints.
Average order value (AOV).
Average order value represents the average amount customers spend per transaction across channels. AOV helps businesses understand the purchasing behaviour of customers interacting through different touchpoints.
What’s more, AOV indicates whether cross-selling and upselling strategies are effective. Businesses can offer promotions, bundles, and other incentives to increase AOV in the top-performing channels.
Common pitfalls in executing omnichannel marketing strategies
Omnichannel marketing requires technical expertise, an integrated technology stack, and a cohesive brand strategy. Steer clear of these common mistakes.
Implementation costs.
The main mandate for an omnichannel strategy is a fully-integrated technology stack. Building this technology framework constitutes a complex, time-consuming process potentially spanning several months.
From comparing software solutions providers to building custom API integrations and migrating data, businesses will need to outsource these tasks if they lack in-house IT resources.
Businesses must make significant investments not only in the IT infrastructure itself but also personnel training before and after implementation. Production schedules may be temporarily disrupted as teams get accustomed to the new systems.
Post-implementation costs include ongoing maintenance — either outsourced or done by in-house IT personnel — and software updates, which may or may not be included with the software purchase or subscription.
Complexity of integration.
Each channel often operates on distinct platforms with their own data structures and technical requirements, making the integration process intricate and time-consuming. Achieving seamless connectivity and data synchronisation among these diverse systems can be daunting, especially when dealing with legacy systems or disparate technologies that don't easily communicate with each other.
This complexity often leads to technical hurdles, data discrepancies, and interoperability issues, impeding the smooth implementation of an omnichannel approach.
Technology limitations.
Incompatible systems, outdated software, or insufficient automation tools to collect and streamline data from various channels can impede omnichannel marketing efforts.
While innovative technologies such as AI, machine learning, and customer data platforms offer immense potential for omnichannel marketing, not all businesses have the resources or in-house expertise to leverage marketing tools optimally.
Businesses may end up underutilising advanced features that could otherwise enhance personalisation, analytics, or marketing automation.
The final word
Providing an omnichannel experience requires businesses to become more customer-centric than ever. By unifying cross-channel customer data, ecommerce companies can personalise the customer journey map at an individualized level instead of relying on broad customer segmentation.
By understanding how their customer base interacts with the brand across touchpoints, businesses can provide targeted offers, enhanced product recommendations, and high-converting calls-to-action (CTAs) based on past behaviour and inferred preferences. This lets businesses better define their target audience and reduce churn.
However, omnichannel requires in-house domain expertise and a robust, integrated technology stack. This can present a significant upfront cost to the business, but has the potential to boost ecommerce sales and customer loyalty in the long run.