From the July 2003 issue of Entrepreneur

Alert TV viewers who catch the on-screen tag--"call, click, come by"--at the end of Office Depot spots don't realize they're witnessing a marketing revolution. And the emerging leader is an integrated approach called multichannel marketing.

Customers decide where, when and how they want to shop. But unlike the old days, when each marketing channel might take a different approach and in-house groups maintained unique customer databases, now all channels strive to present one point of information for and about customers. Broadcast, direct mail, e-mail and print campaigns are linked. Instead of multiple customer databases, companies view customers as individuals, taking into account their buying activities and preferences to customize offers and increase sales.

From the customer's perspective, having the option to shop via catalog, in-store or online represents more choices and information, not to mention the ease of round-the-clock ordering, 365 days a year. They can place an order online at midnight, call for customer service during the week, and return merchandise purchased online at the store.

For retailers, multichannel marketing results in increased sales. Trouble is, entrepreneurs are just beginning to catch on to cross-selling. While big businesses excel at integrating offline marketing with online efforts, entrepreneurs do not. According to the Direct Marketing Association, more than 80 percent of large businesses target offline buyers through online ads, while fewer than half of small businesses do.

Channel Surfing
A 2001 study by Forrester Research showed that more than 60 percent of retailers expect to use three or more sales channels this year. Offering many channels significantly increases customer spending, and multichannel shoppers buy 70 percent more frequently than the average store customer.

If you're concerned that adding new channels will detract from in-store traffic, this hasn't proved to be the case. According to the National Federation of Retailers, nearly three-quarters of shoppers do online research before making in-store purchases. The key is to use what you learn about customers while they're in your store to cross-sell. For example, shoppers who register for the customer reward program at REI, an outdoor gear retailer, will get an e-mail offer as well as a catalog, and there's a high probability they will make additional purchases.

Here are three useful tips for effective cross-selling:

  • Build customer relationships. Stay connected to customers using advertising, PR and promotions, and use direct mail, e-mail, call centers and Web sites to cross-sell. These tools let you build solid relationships from the time customers first consider your products through their first and repeat purchases.
  • Capture spending activity. Instead of using many databases to track online, direct-mail and in-store sales, have a unified view of the customer. Create a database that captures the spending activity for each channel so you can compare and measure shopping activity.
  • Keep your message consistent. Take a cue from larger businesses and cross-promote in all channels. Carry your campaign message through all forms of media, and cross-train your employees so you have a consistent theme and message.