INMA_A01.QXD

So, the multi-channel communications strategy needs to specify the extent of commu-
nications choices made available to customers and the degree to which a company
persuades customers to use particular channels. Deciding on the best combination of
channels is a complex challenge for organisations. Consider your mobile phone com-
pany. When purchasing you may make your decision about handset and network
supplier in-store, on the web or through phoning the contact centre. Any of these contact
points may either be direct with the network provider or through a retail intermediary.
After purchase, if you have support questions about billing, handset upgrades or new tar-
iffs you may again use any of these touchpoints to resolve your questions. Managing this
multi-channel challenge is vital for the phone company for two reasons, both concerned
with customer retention. First, the experience delivered through these channels is vital to
the decision whether to remain with the network supplier when their contract expires –
price is not the only consideration. Second, outbound communications delivered via web
site, e-mail, direct mail and phone are critical to getting the customer to stay with the
company by recommending the most appropriate tariff and handset with appropriate
promotions, but which is the most appropriate mix of channels for the company (each
channel has a different level of cost-effectiveness for customers which contributes differ-
ent levels of value to the customer) and the customer (each customer will have a
preference for the combinations of channels they will use for different decisions)?
McDonald and Wilson (2002) suggest evaluating different distribution channels using
the channel curve which is a similar tool to the electronic shopping test of de Kare-Silver
(2000) described in Chapter 2. For a particular product category they suggest evaluating the
customer’s preference for each channel against store, mail and phone ordering channels
and in terms of cost, convenience, added-value, viewing and accessibility for the customer.
To review strategic options for the role of the Internet in multi-channel marketing the
channel coverage map (Figure 4.21), popularised by Friedman and Furey (1999), is a
useful tool. This model is best applied to a business-to-business context. Considering an
organisation such as Dell, customers will vary by value within and between segments.
Low-value segments will be smaller businesses and consumers while large organisations
placing many purchases will be higher-value. For consumers, Dell’s preferred channel
preference will be the low-cost online channel. For medium-sized companies, the prefer-
ence will be a combination of desk-based sales agents in a call centre supported by the
web. Through using phone contact, Dell can better explain the options available for
multiple purchases. For the highest-value, large companies, the most important effective

STRATEGY FORMULATION

Figure 4.21Channel coverage map showing the company’s preferred strategy for com-
munications with different customer segments with different value

Contact-centre

Web supported

Web

Sales force

Customer extranet

Product sales complexity

Cu

stomer value