Right-channeling: How to apply a customer service concept to marketing

1st Aug 2011

Ed Hadley looks at how organisations can apply the customer service concept of 'right-channeling' to marketing campaign management.

While right-channeling may be a well-worn phrase within customer service departments, it is one that is only just beginning to enter the lexicon of marketers.

From a service and support standpoint, the goal of right-channeling is to serve each customer via the most appropriate channel for that specific relationship and that specific interaction. The concept dates back to the early 2000’s, when the initial euphoria with web self-service began to subside. Although customer service departments had hoped to lower costs by driving as many inquiries as possible to web self-service, they quickly realised that the channel was only appropriate for certain customers and certain interactions.
Right-channeling emerged as a way to restore the balance between resources and value. High-cost channels, such as the call centre, still had an important place in the mix, but they were reserved primarily for high-value interactions and high-value customers. A retail bank, for instance, would encourage calls from its VIP or platinum customers, as well as people inquiring about high-value products like mortgages. On the other hand, routine questions, such as account balance inquiries, would be deflected to interactive voice response (IVR) or web self-service, where they could be resolved quickly - and at significantly lower cost.
Like customer service departments, marketing organisations today face the same strategic imperative to align costs with value, or return on investment (ROI). Moreover, certain marketing messages and/or customer segments are naturally better suited for certain channels. Consequently, there is a legitimate need to apply the right-channeling concept to marketing, as it can help drive optimal results from marketing campaigns.
Right-channeling requires a true cross-channel approach to marketing campaign management. In other words, marketers must be able to drive a single marketing campaign with a consistent message that can be rendered and delivered across any channel (e.g. email, direct mail, web, mobile, call centre, or even social media) based on a set of pre-defined business rules. The result is that businesses are able to deliver the right message to the right customer via the right channel.
There are a variety of criteria marketers can use to right-channel their marketing messages. To get you thinking about how to apply the concept to your own marketing programs and campaigns, here are seven common approaches:
  1. Campaign type – What type of marketing campaign are you planning and does it lend itself to particular channels? For instance, direct mail and telemarketing wouldn’t be very appropriate for a flash sale, given its time-sensitive nature. Email, mobile, and social media, on the other hand, would.
  2. Customer value – Not all customers are created equally. You might set up your marketing campaigns so that platinum customers receive a message via one channel, gold customers via another, and everyone else via a third. This approach allows you to balance value with cost.
  3. Channel preference – When possible, customers should receive messages through their preferred channel. If credit card customers have indicated that they would like to receive fraud alerts via their mobile, don’t send them an email (unless you’ve also sent them a text message). Adhering to customer preference can help maintain satisfaction and boost response rates.
  4. Customer intimacy – Customer intimacy can play a role in deciding which channels to use in your marketing campaigns. For instance, because it’s more intrusive, mobile might not be appropriate for customers that don’t have a strong relationship with your brand.
  5. Response history – If a customer consistently responds to messages via one channel but not another, use this response data to drive channel selection for subsequent campaigns. Past performance can be a strong indicator of future success.
  6. Channel capacity – Telemarketing generates good results for many organisations, but the channel is limited by capacity. You could pass a specific percentage of customers to the call centre based on available capacity, and then funnel the rest to another channel.
  7. Cost/budget – Higher-cost channels like direct mail should be spent on customers and/or campaigns with the highest revenue potential. If a customer hasn’t responded to previous campaigns, for instance, you might send them email versus squandering direct mail budget.
The biggest obstacle to effective right-channeling is channel integration. Historically, marketers have relied on point solutions to market via individual channels, such as email, web, and mobile. This patchwork of tools has several limitations. The data needed to build the 360-degree customer view essential to right-channelling is trapped in silos - many of which reside outside the organisation. The business’ understanding of customer interests, preferences, and behaviour is therefore incomplete. 
Moreover, with separate applications, defining and automating integrated cross-channel campaigns simply isn’t possible. Marketers have to use an email service provider (ESP) to send emails, another tool to send mobile messages, and so on. They might try to right-channel manually, but this approach cannot scale and the results are bound to be less than optimal.
True right-channeling is only possible with a marketing platform with the following four attributes: a real-time, 360-degree customer view encompassing all known and inferred information; seamless channel integration, which allows a single campaign or message to be rendered and delivered across channels; a central offer engine containing the business rules that drive message or offer selection across channels; and high-volume automation for effectively scaling right-channelling, no matter how large the customer base.
One example of successful right-channeling comes from Debenhams, the second largest retail department store chain in the UK. Debenhams sends its customers personalised marketing communications via email and mobile. Because both channels are managed from a single marketing platform, the retailer is able to channel select according to customer opt-ins and preferences, as well as execute cross-channel campaigns driven by a centralised marketing database. Benefiting from greater personalisation and cross-channel execution, Debenhams reports that its email conversion rates are up 75% and email-driven sales volumes are up 200%.
Despite its incredible potential, the concept of right-channeling is only now beginning to make headway in marketing organisations. When you think about it, though, right-channeling is essentially another take on more recognised terms like one-to-one marketing or conversational marketing. Whatever it’s called, the goal is to provide each customer with a relevant, personalised, and interactive experience across channels. As more and more businesses are discovering, the benefit of creating such exemplary experiences is greater share of mind - and wallet.
Ed Hadley is senior marketing manager at Neolane, which provides the only conversational marketing technology that empowers organisations to build and sustain one-to-one lifetime dialogues, dramatically increasing revenue and marketing efficiency. Neolane is used by more than 300 of the world’s leading companies including Sony Music, Alcatel-Lucent, Orange, Sears Canada and Sephora. Ed can be reached at [email protected]. Twitter: @neolane. Read Neolane's blog at The Cross-Channel Conversation.

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