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How can a company effectively use multi-channel marketing, including minimizing channel conflict and cannibalization?

Multi-channel marketing is used to increase market coverage and maintain cost efficiency, but can invite cross-channel conflict. The key steps to designing a successful hybrid channel are:

  1. Gather market data, to show market potential, channel benefits/costs, and the degree of revenue in conflict between the different channels.
  2. Work towards harmonization:
    1. Identify customer segments, based on traditional segmentation criteria such as size of customer, geographic region, products purchased, buying behavior/needs.
    2. Delineate the tasks or functions which must be performed in selling to those segments, such as lead generation, qualifying sales, pre-sales activities, closing the sale, post-sales service, and ongoing account management. Different segments require different emphasis on different tasks.
    3. Allocate the most efficient channels to those tasks. Decide which channels should perform which tasks for which segments. Not all channels must take on all the tasks for a particular segment; rather, channels should be creatively combined to optimize costs and coverage, relative to the tasks they perform for various segments. This requires a high degree of cross-channel coordination.


Other issues for effective multi-channel marketing are:

  • Use an effective CRM system to deliver a fully-integrated experience supporting the different channels.
  • Work collaboratively with channel partners, with the expectation that the increased market opportunities will be equitably allocated.
  • Attend carefully to both the compensation and communication structure. If all channel members, including salespeople, do not buy into the strategy, they may sabotage or undermine the changes. Existing channels must be compensated for the potential loss of income that flows to the new channel, or the new channel will be sabotaged.
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