Omnichannel: Not Just a Buzzword
If we are being honest as financial marketers, we will admit that the industry is currently rife with buzzwords. One of the most prominent buzzwords currently in circulation is “omnichannel”. I am here to tell you that omnichannel is not merely a buzzword – it is a real and powerful way of marketing that, when properly executed, produces a sum that is greater than its parts.
So, what is omnichannel marketing? or more specifically what is an omnichannel campaign? Simply stated, an omnichannel campaign shows a core message to a defined audience multiple ways throughout the course of a discrete promotional window. These “multiple different ways” are the “channel” part of omnichannel and can include:
Direct Mail – still the only way to reach 100% of a target audience.
Email – particularly effective at promoting products that can be opened online.
Paid Social – placing marketing messages in the social media (Facebook, Instagram, etc.) feeds of targeted audience members.
Paid Digital – linking IP address and physical address to place digital ads in front of the targeted audience based on where they access the internet.
Call Lists – outbound calling lists (net of do not call) provided in prioritized calling order.
The theory behind omnichannel marketing is that reinforcing marketing messages through a diverse mix of channels throughout the course of a campaign increases the likelihood of response. Stated that way, the emphasis is on the channel when in reality it is audience selection that really drives success. A message can be beautifully designed with heart-rending emotional appeal and delivered flawlessly through 15 different channels, but it still lacks the fundamental power to convince a person who doesn’t use or need a credit that they should apply for a loan. Omnichannel campaigns that are improperly targeted will increase the waste factor in your marketing budget.
Effective omnichannel marketing starts with the audience, not the channel mix. The challenge is to identify the right audience for the particular marketing message, then go find them in online and offline venues. So how do we go about finding the right audience for a particular marketing message? It is here that we lean on long-established principles of effective database marketing – you might say “anti-buzzwords.”
All effective targeting methodologies can be reduced to two variables in an equation:
Capacity – does the person have the basic means to buy the product?
Propensity – does the person have at least some inclination to buy the product?
Both elements will always be present in effective targeting algorithms. A great analogy for how these variables work together is the consumer lending process. There are many people with high propensity to buy loans (they badly need credit) but who lack basic capacity to buy (low credit scores). It is the brining together of capacity and propensity factors that allow banks and credit unions to match credit solutions and rates to individual borrowers at points in time in ways that benefit the customer as well as the institution. This same discipline should drive audience selection for targeted marketing campaigns. Determining the capacity and propensity latent in your customer data requires engagement with a partner like Baker Hill who can bring proven data assets to bear in this process.
The right audience who isn’t aware of what you have to offer will not buy your product. Once the right audience has been selected for your omnichannel campaign, the question of how to deploy channel mix becomes front and center. The different elements of the marketing mix play different roles in a campaign. Direct mail is often effective at introducing the campaign to the audience since it can reach 100% of the audience. Email is limited to customers where you have a valid address but can be very effective in connecting the audience with online account opening apps. Ideally in omnichannel campaigns email marketing will include retargeting or resending emails to those who did not click the original message(s). Digital channels keep the conversation going and vastly expand the awareness-building component of the campaign by showing ads in a rotating fashion throughout the campaign window. Digital channels are limited to match rates for social media platforms and IP address but unlike direct mail, they provide direct evidence of customer engagement with the marketing.
This brings us to tracking. Proper omnichannel campaign tracking integrates digital impressions (how many saw it and how many times) and click data (how many clicked) with actual account response tracking. The relationship between clicks and product response volume is a form of conversion rate, answering the question “what percentage of customers who expressed interest in the offer actually followed-through and opened the product?” Understanding conversion rate is a starting point in determining how to improve campaign performance. With that said, impressions themselves represent instances of targeted brand awareness associated with a specific value message and as such contribute to the positive impact of campaigns.
In addition to measuring conversion rate, campaigns should also track response rate by the number and type of channels promoted. This is the ultimate measure of omnichannel lift. With proper audience selection and each channel in the omnichannel mix working together, response rates will directly correlate with the number of channels the customer was exposed to high to the low.
In short, an omnichannel approach typically provides a 20% - 30% lift in overall campaign performance while significantly expanding the campaign’s branding impact, making it well worth the effort.
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Posted on Monday, February 22, 2021 at 10:15 AM
by Tim Keith
Tim's focus is on working directly with C-level leadership at banks and credit unions and the full Baker Hill analytics and marketing team to facilitate and present comprehensive household data analyses, identify relevant growth opportunities, develop and recommend marketing strategies and programs, and track, evaluate and present campaign results. Tim has worked with hundreds of banks and credit unions—large and small—on bank strategy and marketing issues. He is also a banking and credit union conference speaker and contributes articles on marketing strategy and programs to banking and credit union industry publications. Tim earned his MBA and Bachelor of Science in Marketing from Mississippi College.