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How Dannon Cultured Multichannel Marketing

by Karen D. Schwartz, Contributing Writer, CMO.com
Published by CMO.com

March 2011

If you’re a yogurt eater—and even if you’re not—it would have been hard to miss Dannon’s recent campaign to support Breast Cancer Awareness. Dannon’s marketing team did everything possible to make sure that consumers knew it supported the issue--on its packaging, in its stores, on TV ads, on its Web site, and on its Facebook page, across all of its brands.

“It was a real companywide effort that blurred the lines between traditional and digital marketing,” says Alessandro, who late last year was promoted from senior director of marketing to the newly created position of vice president of connection, media and innovation at The Dannon Co.

Creating an environment and culture that can seamlessly integrate both offline and online types of marketing into campaigns in a way that is agnostic to the type of communications channel is Arosio’s overall goal, he says: “We like to think of it as building a consumer-centric communication process. It’s not about shifting everything from TV to digital, but considering everything in the spectrum of touch points.”

What Dannon is doing is what all companies are aspiring to do these days: combining traditional marketing methods, like direct mail and TV, with digital marketing, like email, social media, and mobile technologies.

“The challenge of capitalizing on multichannel opportunities—delivering seamless messages and campaigns and maintaining dialogs with customers that span channels—is probably the most important priority I hear marketers talking about today,” says Jonathan Margulies, a director at Winterberry Group, a New York-based strategy consulting group.

An integrated multichannel strategy allows companies to deploy their messages in more dynamic ways and gives marketers the flexibility to launch different types of campaigns, test messages, and find the approach and cadence that works for different customer groups.

It also improves the bottom line. “Marketers have fairly consistently determined that a multichannel buyer spends a minimum of four times than a single channel customer,” said Ernan Roman, president of Ernan Roman Direct Marketing and author of the book “Voice of Customer Marketing.”

Breaking Out Of Silos
So if multichannel marketing is such a win-win, why isn’t everyone doing it?

Simply put, it’s not easy. Most companies today still manage their marketing efforts in channel silos, not necessarily because they want to, but because that’s what they know. Data flow is optimized for independent channels, the service providers they use to manage marketing programs usually still focus on independent channels, and internal marketing operations departments and technology platforms all have single channel roots that are hard to overcome.

Long-term, nothing should be managed in a single channel way, but it’s an evolution. It’s a question of what transition/maturation plan makes sense,” Margulies says. “You can’t walk into a large, functioning marketing organization today, tear down the silos, and command that groups work together.”

It’s changing, but slowly. Dannon’s push to create a multichannel environment, for example, is ongoing. After Arosio began his new position within Dannon, he set about restructuring the marketing department. Arosio’s four direct reports are three consumer connectors (one manager for each brand group) who have responsibility for both online and offline marketing, and one digital marketing expert who works across the portfolio of brands to ensure the right infrastructure is in place to create relevant content to communicate with customers. That group is called the connection team and is separate from the rest of the marketing department, which currently handles offline marketing.

Even these changes are just an interim step. Within two years, Arosio says the connection team will be merged with the rest of the marketing organization, and brand managers will be able to handle all channels—online and offline—with ease. He expects to keep a separate innovation team whose job it will be to be on top of the latest trends and channels and to determine how to best incorporate them into Dannon marketing campaigns.

Once an organization is fully set up to accommodate multichannel marketing, the real work will begin. Determining which mix of channels is appropriate for a particular marketing campaign means knowing how your customers like to be contacted, what they have bought in the past, and other preferences.

“Succeeding in multichannel marketing means rethinking how you view the customer. That requires their preferences so you can shift from blasting one-size-fits-all messages to a customer preference-driven relationship where you give them what they want, the way they want it, regardless of whether it’s offline or online,” Roman says.

That’s the tack Cindy Marshall, Performance Bicycle’s chief marketing officer, has taken. Marshall has spent the past seven months working with the CEO to further define the company’s brand to target three broad-reaching customer segments—the affluent family, the future family (single, no kids), and the mature independent. Building on that segmentation, the group then researched its customer base and found that recreational riders tend to buy at stores, while avid riders tend to buy online. They also found that the vast majority of customers were men. Based on that information, the group spent time improving its Web experience, reimaging its catalog, refining the retail experience, and enhancing its loyalty PR and multimedia efforts.

Next up is introducing an Oracle-based marketing database, which will house all customer information and order transactions. This tool, which will go live in April, will allow the company to analyze customer patterns based on how they like to buy, what they buy, and how they like to be contacted. Eventually, it will give them enough information to change their marketing messages to be more relevant to each segment and, eventually, to each customer.

“Our goal is to change our marketing communication to be relevant to each individual group by personalizing and customizing our messaging,” Marshall says. “With the data now available, we’ll be able to examine our customers’ buying behaviors and how they prefer to interact with us.”

Knowing what you want, and getting the customer data to prove it, is critical, but it must be followed by rigorous and diligent testing.

“We’re not going to move from the single to multichannel world overnight, but we can begin that process if we take initiatives and processes that used to be single channel and begin testing more integrated alternatives,” Margulies says. “It’s about matching customers with the channels they are likely to respond to.”

Performance Bicycle takes testing seriously. It is currently working through a multipronged process that involves testing all types of media for various types of campaigns. That includes testing digital display ads to drive both online and retail traffic, testing Facebook ads and expanded Facebook promotions to drive retail traffic, and expanding the use of social and viral marketing around each store.

“We’re testing variable triggers online to understand what triggers we need to drive response,” Marshall says. “We’re also testing offline so we can better segment our fliers by putting different images on them depending on what your profile is.”

The Pain Of Change
The last piece of the puzzle is changing the corporate culture to fully accept multichannel approaches. At Dannon, Arosio has introduced the concept of integrated communication planning, where all members of the marketing team, as well as the connection team and other internal stakeholders, meet to align the functions behind objectives. This step is critical, he says, not only to make sure everyone is on the same page, but to move forward with a campaign that is coordinated with the organization’s goals as well as the marketing department’s goals.

But even if you do everything right, organizational and cultural biases toward specific channels can cause problems.

“Don’t jump to the next new thing just because it’s new, even though there may be a lot of excitement around it. Make sure it makes sense,” Arosio says. “Make a fair, long-term assessment of its value, and don’t jump into it. You can already do an excellent job with your existing tools while you work and test and try to get right how you will incorporate the new platform.”

Channel conflict and turf wars also can cause problems. If a customer sees a posting on Facebook about a sale at a favorite store, then goes to the Web site to find what she wants, confirms her choice by reading a catalog, and finally makes the purchase in a retail store, which channel gets credit for the sale?

“Each channel contributed to making the sale, so it doesn’t matter who gets the credit,” Roman says. “It’s about providing more choices and generating a greater number of total sales than before. All of the media has to work together to surround the consumer with an integrated message. That’s the beauty of true media integration.”

And, as always, remember to put the customer first.

“The customer is in control, and everything needs to be around what the customer thinks, not what the company thinks is best,” Marshall says. “If you keep that in mind, you’ll succeed.”

New Book Release: Voice Of The Customer Marketing
"This is the definitive playbook for this new customer-driven era."
—Frank Eliason
Senior Director, National Customer Operations, Comcast
"Thank you, Ernan, for tuning us in to the inner voice of our customers! A deep understanding of our customers' needs and preferences is essential for our future growth."
—Karen Galley
President, Patient News Publishing