Multiple Sales Channels Integration
Most business gurus recommend using multiple sales channels to attract sales today. The important thing is that a lack of coordination between these multiple sales channels, can severely restrict the benefit derived from the effort. While many companies struggle to achieve the bare minimum which is, the 1+1 = 2 result, it is very possible to up your sales by number that breaks the laws of mathematics - you should aim for 1+1 = 3 or even something more.
Every marketing guru has been preaching the 'multi channel mantra' for at least a decade now. The term has become fashionable in recent years but, just how effective is it proving. A significant number of organizations have been unable to gain any significant sales increase even after, increasing the number of sales channels. We will take a few real-life examples and try to explain why this is so.
Let's begin by briefly explaining what exactly is meant by multi sales channels. Let us presume that you had a garment business that was selling merchandise through a shop located on a busy street. This shop could be your one and only sales channel or we could say that, selling through physically present shops is your only sales channel. With this understanding, merely opening a new shop in another city or location, would not imply that you have set up another sales channel.
Inorder to introduce a new sales channel for your organization, you would need to add a new 'mode' of selling your merchandise. You could hook up with a local or national television sales channel and hold TV sales shows, for your garments. Viewers could dial a number, get product information and order merchandise too. This would mean that, you now have an additional sales channel available to you.
If you now feel it necessary to add yet another sales channel to your business, you could perhaps get a company website. Going online could happen in differing degrees or concepts. For example, your website could be a simple extension of your physical shop. General information about the merchandise you sell could be provided and updated on the website. Interested visitors to the website could be directed to your physical store - a location map might be useful to handle this and would ideally be published on the website too. In this case, your online effort will not directly impact your sales, as buyers would be encouraged to buy through your existing sales channel (the physical shop).
On the other hand, a website that allows visitors to purchase items online and complete the transaction by making online payment, would be a clear case of a new sales channel being added to your business. Buyers might never visit your physical store, the order fulfillment would involve processes that are different from those used to handle shop sales. Customer support would need to process emails received, online buyers might also call over the phone. The merchandise will need travel to the buyer, shipping could be outsourced or handled internally.
So you would now have three sales channels for your garment sales - one or more physical shop, a television sales show and an ecommerce enabled website. Ideally you should soon experience a surge in total sales but, the ideal situation is far from achieved. The main problem relates to the interaction between these sales channel. In most cases each channel works in isolation from the others, and this cannot lead to effective use of the multi channel sales set up that you have set up.
Fortunately, identifying the source of the problem is easy - it is generally the fault of top management. Organizations find it easier to fix targets and define duties and tasks based on clearly defined departments. This strict separation of sales channels, can cost a lot in terms of lost sales potential. The end result is the blame game, firing and new hiring - a vicious circle that never addresses the real problem. Let's read on and understand what is really happening in your garment business.
The sales staff that are stationed in the physical shop, are too keen to achieve their targets. With this attitude, they hesitate to inform buyers about the elaborately designed website that the business has just set up. The fear is that, a sale that is made and fulfilled online would not, count towards their sales target. Similarly, the staff in charge of online sales and marketing, would try to complete the entire transaction online - it is the only way for him or her to move towards their sales target. Surprisingly, the TV sales host might prefer not to talk about your company store and website.
We have seen ridiculous situations where, merchandise was maintained separately for each of the sales channels. This would be fine if the stock of an item can be easily checked and monitored, across the channels. As an example, the shop could lose a 500 dollar coat sale order because, the item is not in it's stock. The buyer would surely look for another place to buy from - it is quite likely that the same coat was locked for the past three months in the 'internet' or 'website' stock room. This lack of coordination could also mean that, merchandise that is sold out in one channel could be freshly purchased or manufactured when, the item is lying unsold in another channel. Solving this problem might involve an update of your stock control system but, do not underestimate the 'lost sales' or 'excess inventory' effect.
Management often fails to understand the extent to which sales are lost. They might even be unaware about ways to resolve the problem. We will now provide clearly defined opportunities, to highlight the possibility of increasing sales through better interaction and cooperation between the different sales channels.
Talking about the sales outlet in terms of your physical shop(s), it would be a good idea for all sales staff to be thoroughly familiarized with the website - this should include merchandise in the online stores, the website navigation etc. The online catalog (store) can selectively be used to show merchandise to prospective buyers coming into the store. We used the term 'selectively' to highlight and important point. A shop visitor who has browsed through the merchandise in your (physical) store and seems interested to buy, should probably not be distracted by being shown the website. On the other hand, a buyer who does not seem very attracted to the merchandise that you have physically shown him, might turn into a lost customer. In this case the sales staff might do good to have brief talk with the visitor and try to get more information related to specific product requirements. The staff could then spend some time with the visitor and try to show him items, from the online catalog. Familiarization with the website will make this presentation more efficient and interesting.
If a visitor is ready to walk out of the store promising, to come again in the near future and make a purchase - make sure that he or she knows about your website and request them to, stay connected. You could also mention that new merchandise is regularly added to the online store and that, the 'promotions' section on the website contains some very attractive offers. The staff is expected to tailor the website affair to the shop visitor in such a way that, the visitor feels like the whole presentation was personalized to suit his requirement.
You need to understand that not everyone who visits your physical store, would be staying nearby. Some of them might be passing through the area, others might be residing at a hotel nearby for a few days. Your website can be accessed from all over the world, so it is an effective way to ensure that visitors stay in touch. The shop could be located in a main shopping mall in Phoenix, a regular visitor to your store might refer your website to friends or family living in Detroit. It is likely that you will get online sales from people that, never ever visited Phoenix!
In the same way that website sales could benefit from shop visitors, you could find website visitors being attracted to your physical shop too. Putting your physical shop details like name, location, map, contact number etc on your website, can also add to your reputation. Many online buyers feel more comfortable making online purchases from, websites that belong to businesses with a clear physical presence.
The sales channel operating through a TV show could, also be 'linked' to the website and physical store. There is a very strong case for channeling your TV show customers to your online (website) store. Broadcast fees, TV host expenses and sales commissions can be very high - this drains profit margins. You obviously cannot show all or even a major portion of your merchandise, through TV broadcasts. Remember that broadcast fees are charged by the minute and prime time slots, carry stiff premium rates. So it makes sense to publicize few of your products in each category, through the TV show. Make sure that viewers who see your TV sales channel are aware that, you have more merchandise in terms of depth and variety on your website or online store.
So we seem to have a very convenient solution for the effective integration of multiple sales channels but, one issue remains. Interestingly, it is the fluent and seamless integration of different sales channels that brings about this issue. How can management reward sales staff based on performance. Why should a shop sales staff care to give website details to a shop visitor. This staff would get little benefit or recognition if the sale was completely fulfilled by an online transaction on the company website. Similarly a visitor to the website who becomes aware of the company (physical) shop, might just drive up to the shop and make a purchase there.
An innovative sales strategy needs to be supported by dynamic management action - no one-fit-all approach exists. Here is one basic idea that could be further analyzed and implemented in a company. When calculating sales incentives for sales staff, keep a small portion of the sales from each sales channel aside. Calculate a percentage of that small portion as sales incentive, get a total for this amount that includes all your sales channels. Divide the channel. The motivation of your sales team will not dip because, incentive for a major portion of sales from each channel is still retained and shared among sales staff from the respective sales channel.
It is not sufficient to restrict training activities to sales staff, management needs to stay updated with developments too. While delegating responsibilities might sound like a good strategy, top management should have a fairly good understanding about new technology and concepts being implemented in their organization. It does not take much to understand that 1+1+1 = 3, but it takes hard work to change that to read 1+1+1 = 4 or even 5 or 6 !!
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