Why channel-based marketing is becoming obsolete

The proliferation of digital ways of engagement, from chatbots fo social and messenger apps, is transforming the way consumers interact with brands and leading to the demise of the owned website

Things were so easy for digital marketers in the 1990s, when the world simply consisted of desktop Web pages and email.

A decade later, search had gotten big, the iPhone had made mobile a serious channel and introduced the world to apps, and social had begun to rear its head. Now, as we exit the 2010s, digital channels have proliferated, with chatbots, voice assistants and half a dozen messenger apps all vying for customers’ attention.

Yet while the tools have changed, many marketing programs are still structured on a channel-based model with origins dating back to the 1960s. So as organisations strive to meet customers on any channel, on any device, at any time and anywhere, the question now is how to best organise themselves to deliver that customer-centric vision.

During the South by Southwest conference in Austin in March, chief technology officer at messaging platform LivePerson, Alex Spinelli, gave a presentation titled ‘RIP Websites’. The premise was that today’s consumers often get what they want through digital channels without ever going near an organisation’s website.

According to Spinelli, an obsession with omnichannel strategies could see organisations missing the whole point of why marketing communication channels were created in the first place.

“I think we are at a point now where we have become wildly over obsessed with the particular channel,” he said. “Omnichannel is about the channel and how to use technology and experiences to reduce cost. But it is continuing to obsess over the channel.

“And at the end of the day, the most important thing is the actual conversation you are having with your customer.”

Turning off the channel dial

Mohit Bhargava has witnessed a range of different models through his time at NOVA Entertainment and Village Roadshow, and now as the general manager of sales and marketing at Big4 Holiday Parks. He says the right structure ultimately needs to consider the function of the business itself.

“Most retailers understand 90 per cent of their revenue comes from existing customers, and in that instance, their primary focus really is around case management, CRM and frequency, as opposed to operating at the top of the funnel,” Bhargava tells CMO. “Whereas if you are an online travel agent, your focus is on the top line, where it is consumer-facing and search-driven. So you really have to understand the fabric of the business to determine and inform how you construct the teams.”

But even when an organisation truly understands its purpose, that still leaves the question of how to organise the marketing team to deliver against that knowledge. Businesses might talk about putting the customer at the heart of everything they do, but they are also now dealing with a customer that wants to be dealt with on their own terms.

Eighteen months ago, ANZ Banking Group restructured its digital teams away from channels and organised them around product groups, such as its everyday banking products, savings and investment products, and home loans.

“We have set up a specific digital group for each of those product areas,” says ANZ’s marketing chapter lead Malcolm Murdoch. “A cluster consists of a content person, a data analyst, a digital marketer, and a site optimisation person. So we have these four groups of people who consistently work on a product, but then also sit in an area with other marketing people.”

Previously, the digital team was separate from groups such as the Web team, apps development and analytics. Murdoch says this made it difficult to gain priority for some activities, such as generating landing pages for campaigns.

“Having it altogether means we do have that integration, so everything sits in one place from a customer point of view,” he says. “We have much more joined up digital experiences for the customer, because those elements sit together.”

The model borrows some chapters (almost literally) from the Agile playbook developed at Spotify, which organises workers as squads, or self-contained product development teams; tribes, or a group of squads work in a related area; chapters, or people of related competencies working within the same tribe; and guilds, or communities of interest based around specific skillsets.

“My specific role is chapter lead, so it is my responsibility to build up the marketing capabilities within these teams,” Murdoch says.

While initial transition took some getting used to, it has come to be accepted across the function now. “Seeing the whole of the digital customer journey has been really beneficial to them,” Murdoch says.

Rapid response marketing

Curtin University is another organisation that has realigned its marketing resources along customer lines. Former CMO, Tyron Hayes, oversaw the agglomeration of marketing resources who were previously spread across each faculty into a single marketing team, which was then organised around five different stages in the student journey. This included a brand and reputation team at the top of the funnel with freedom to determine which channels they engaged through.

Hayes says the new structure also brought the contact centre and student outreach teams alongside the digital engagement and analytics teams. This proved helpful for strategically managing the wide variety of channels that prospective students are now interacting through.

“There is a lot more interaction that happens on Facebook and Instagram and other channels now,” Hayes says. “So you really need to be abreast of the different channels your customers are using and use the right one for the right moment in their journey. You need to think about that whole engagement strategy for however long that engagement cycle is, which channels they are going to need when, and how you nurture them through that.”

Read more: How Curtin University’s marketing chief uses test and learn to cope with complexity

The desire to meet the customer where they want to be met also led Curtin to investigate bringing chatbots into its mix.

“That is what structuring around the customer journey allows you to do, by giving greater ownership to the teams to use whatever channels they believe will provide the best user experience,” Hayes says.

Not all organisations have taken a radical approach to reorganisation. Ryan Gracie had the freedom of coming to the role of chief marketing officer for Catch Group before it had a formal marketing function, and hence was able to organise it as he saw fit.

The smaller nature of his team means he can maintain oversight over a group of domain experts in fields such as affiliate marketing, SEM, SEO, email, and social, as well as its Web, mobile and app platforms.

“All of those work in collusion so they are pushing out the same message across each of the platforms,” Gracie explains. “They are thinking about the message and then building that to suit the medium and pushing it out and optimising across the whole path.

“These days, customers are interacting with us across all of the social channels. They are coming at us on chatbots and interacting through email. Socially we are answering all their questions on Facebook in minutes because people are tending to ask more and more questions there.

“We have our chatbots who are serviced by a very large internal team, and we are answering customer queries constantly across the day and night. So we are where the customer is, and we are finding that is more and more on a mobile device.”

Up next: Why the next way of engaging consumers could be via channels marketers can't control - and what you can do to cope

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