How do omnichannel vs. multichannel marketing differ?

What is multichannel marketing?

Organizations that offer multichannel marketing interact with consumers through various communication channels, including voice, email, SMS, mobile applications and social media. Customers can communicate through these channels for sales, retention and service purposes. A multichannel environment must incorporate additional capabilities to become an omnichannel environment, as each channel of communication operates in a silo.

From a marketing perspective, a multichannel strategy includes interacting with consumers both directly and indirectly through websites, retail stores, catalogs, email and more. This strategy also helps businesses provide consumers with choices for interacting with the organization.

Companies realize they must be where current and future customers look and shop. Due to the effect of COVID-19 on in-store shopping experiences, retail stores without a solid online presence took a tremendous hit and lost customers who needed to shop remotely.

From the customer perspective, multichannel marketing offers various access methods, and customers can decide which one to use. However, as the channels operate in silos, customers may not experience consistency across channels or feel that the organization is aware of their journey.

What is omnichannel marketing?

The migration from multichannel marketing to omnichannel marketing takes significant effort, coordination and resources across an organization. Many functional areas, including sales, marketing, operations and IT, must work together and ensure the company coordinates and communicates as it plans and executes the omnichannel strategy. These plans should minimize customer effort.

An omnichannel environment has two main goals: to provide a consistent experience across all channels and reduce customers' need to repeat previous actions when they cross channels.

1. Provide a consistent experience across all channels

Regardless of the channel a customer uses for communication, consistency is key. Specific areas that require this include:

• branding, look and feel across all channels;
• website navigation, whether on a computer or mobile device; and
• information across all channels.

For example, whether someone calls customer service or performs a self-service inquiry on the organization's website, both options must provide the same information.

2. Reduce repetition when customers cross channels

Companies that consider omnichannel vs. multichannel marketing should know they won't find a one-size-fits-all answer. It may take time and consideration to choose between them.

A customer may interact with an organization via a specific channel, then decide to use another. This action is called a pivot. When customers pivot from one channel to another, they should not have to repeat previous steps. An omnichannel environment tracks and retains the various interactions during the customer journey, and anybody who interacts with the customer has access to this information. This eliminates the need for customers to repeat their previous actions.

For example, imagine a customer shops on a mobile application for a specific item, then that person needs additional information and initiates an online chat session. An omnichannel environment can provide the chat agent with a record of the customer's specific steps on the mobile application, so the customer does not have to repeat any information.

How customers respond to omnichannel vs. multichannel marketing

An organization that uses omnichannel marketing offers relevant products and services to its customers and peace of mind as a result of its customer-centric focus.

When customers interact with an organization in an omnichannel environment, two key features can provide this peace of mind:

• Consistency. With consistency, customers can see the organization pays attention to details. As a result, no matter how customers interact with the organization, they know they will face minimal potential surprises.
• Intimacy. Customers can see the organization has in-depth knowledge of how they interact with the company and that it understands their tendencies and needs.

How to choose between omnichannel vs. multichannel marketing

Companies that consider omnichannel vs. multichannel marketing should know they won't find a one-size-fits-all answer. It may take time and consideration to choose between them. Organizations must consider the migration from multichannel to omnichannel marketing as a journey and dedicate effort and extensive resources -- such as money, time and effort -- to complete the journey.

First, the organization must prioritize the benefits of an omnichannel marketing strategy over other initiatives. Even if that organization decides something like a new product launch currently benefits it more than focusing on an omnichannel marketing strategy, it should still incorporate omnichannel building blocks -- such as improved cross-functional communication -- to help establish an omnichannel mindset.

Second, the organization must perform an analysis to determine whether it will achieve a specific ROI from transitioning from multichannel to omnichannel. For example, it may be expensive to implement a system that tracks every customer interaction in an omnichannel environment. As a result, the organization may decide to only track specific interactions until less expensive technology is available.

A multichannel environment gets organizations into the game, but it is only table stakes. To become the big winner at the table, an organization must migrate to an omnichannel environment and balance the benefits and costs of each step of the journey.