A Guide to Multichannel vs. Omnichannel Marketing
Multichannel and omnichannel are two similar but different marketing approaches. We explore the differences.
What does multichannel mean?
To define multichannel, let’s first start with the basics. A channel refers to any medium where a business interacts with a customer. This can be in both the digital space (like email, social media, a website, and so on) or in a physical location (like a brick-and-mortar store).
Multichannel means that a business is operating on numerous different channels. For instance, a business could be communicating with its customers via SMS messages, in-app push notifications, and live chats on its website. Being available on multiple channels has become a standard for businesses today: on average, consumers now use roughly ten different channels to communicate with a single company.
How does multichannel marketing work?
A multichannel strategy uses different channels to communicate with consumers and encourage them to convert. One example of a multichannel marketing strategy can be seen with social media campaigns.
Let’s use Dunkin’ as an example. A few years back, Dunkin’ launched a Twitter sweepstakes to celebrate the anniversary of its mobile app (with the prize being digital gift cards). To enter, customers had to tweet which beverage they would order after winning, and use the campaign hashtag in their post.
In this example, there are three channels involved in the campaign: social media (Twitter, where the contest was “held”), Dunkin’s mobile app (where gift cards would be sent), and its physical locations (where winners could redeem their drink).
What does omnichannel mean?
Omnichannel also refers to a business operating on multiple channels, but with an important caveat: these channels are connected so that a consumer could easily switch between them without losing the context of their previous interaction. This ensures the customer experience remains fluid between devices and touchpoints.
How omnichannel marketing works
Omnichannel marketing connects every customer channel to personalize each interaction. This is made possible by a centralized data hub, which consolidates customer data from across an organization so that every team is working with a holistic and up-to-date view of the customer.
With an omnichannel approach, a business would have a real-time view of a customer switching between different channels like a website, SMS chat, phone call, or mobile app. As a result, that business could use this knowledge of a customer’s cross-channel behavior to tailor each subsequent interaction.
How omnichannel differs from multichannel
Let’s dive deeper into the three main differences between a multichannel and omnichannel approach.
Cross-channel integration is what defines an omnichannel strategy.
Often teams within an organization are responsible for different channels – social media can be split between paid and social, while customer success might oversee live chat, and marketing focuses on email campaigns. Without cross-channel integration, these teams are working with a fragmented view of the customer, only observing what happens in one specific medium.
Take social media, which has become one of the most popular places for people to seek out customer support. Since it’s not a channel that’s usually owned by customer success this means – without cross-channel integration – that team would be missing out on key insights that could help them proactively solve customer issues and create an overall better experience.
To deliver an omnichannel experience across channels, businesses have to have a centralized source of data.
To achieve this, there needs to be a scalable data infrastructure in place, which allows teams to easily send data to a data warehouse (where it’s consolidated), or easily integrate with different apps and tools to fuel more personalized engagement strategies.
Having a centralized data repository is a key difference between omnichannel and multichannel strategies. With a multichannel approach, teams don’t have access to this complete view of the customer, which means there’s no continuity on the customer end when they switch between channels.
Consistent & personalized customer journeys
Omnichannel has become a favored approach for its ability to deliver consistent and personalized customer journeys.
Leveraging a real-time, holistic view of the customer, businesses are able to avoid blunders like retargeting consumers that have already converted, or sending an email promotion for a product they have no interest in.
Why modern businesses need an omnichannel approach
Channels and touchpoints are growing rapidly
In recent years there’s been a fundamental shift with consumers embracing a “digital-first” mindset. Especially during the Covid-19 pandemic, there was a race among businesses to be available on consumers’ preferred channels, which led to an explosion of new touchpoints. (In 2020, businesses reported that digital touchpoints increased by roughly 63%.)
And this isn’t a trend that’s expected to taper off.
That’s why omnichannel has quickly switched from being seen as something only the likes of Amazon or Netflix could pull off to a baseline expectation for every business. 45% of consumers won’t do a business with a brand after one irrelevant experience. So, as companies add more channels to their customer journeys, they need to also ensure that personalization isn’t lost as customers switch between them.
Multichannel approaches create data silos
Teams within an organization have their own focus areas, responsibilities, KPIs, etc. – it’s a standard mode of operations. But with a multichannel approach, businesses don’t have the data infrastructure needed to easily collaborate cross-functionally, which keeps everyone working in their own silo.
It’s a tough hurdle to overcome, especially as companies continue to add more tools and apps to their workflows. Marketing teams, on average, use eight different channels for their campaigns, and 21 different advertising and marketing platforms. Yet, 83% of companies admit they’re unable to turn fragmented data points into comprehensive user records.
As mentioned above, embracing an omnichannel strategy means revisioning your company’s data architecture to create an interconnected, scalable tech stack that can easily send data between teams and consolidate this data for greater insights (more on that below).
Consolidated data yields deeper insight into your customers
Consolidating customer data gives companies the insight they need to deliver highly-personalized experiences and move toward more predictive campaigns.
Consolidated customer data allows businesses to spot which channels a person prefers to communicate on, which customers are their high-value purchasers (using historical data), and empowers them to win-back churned users with coordinated ad and email campaigns.
Without consolidated customer data, businesses are working with too many blind spots to accurately understand their customers – which means they can't really compete when it comes to customer experience.
How CDPs can help businesses implement an omnichannel approach
The push for omnichannel experiences has been driving CDP adoption across industries. CDPs enable high-fidelity data collection to create unified customer profiles (laying the foundation for personalization). And without unified, real-time customer data, omnichannel is impossible.
In fact, in a survey of over 4,000 decision makers from companies across industries, 73% said that a CDP will be critical to their customer experience efforts in the years to come.
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