THE IGMC PLANNING PROCESS

Intellectual Property of IMCSIntellectual Property of IMCS 11

THE IGMC PLANNING THE IGMC PLANNING PROCESSPROCESS

Sunarto Prayitno


BackgroundBackground

The first step in the development of an IGMC program is The first step in the development of an IGMC program is the planning process.the planning process.

The eight-step planning process discusses on the The eight-step planning process discusses on the following pages has been used successfully with a following pages has been used successfully with a number of companies around the world.number of companies around the world.

It is a logical approach that leads the planner through the It is a logical approach that leads the planner through the various steps involved in developing a successful various steps involved in developing a successful communication program.communication program.


BackgroundBackground

Some organizations may need to expand some of the Some organizations may need to expand some of the steps; other may need to delete some of the activities.steps; other may need to delete some of the activities.

Much depends on the specific organization in its current Much depends on the specific organization in its current contextual circumstances for which the communication contextual circumstances for which the communication program is being planned. program is being planned.


The Eight-Step IGMC ProcessThe Eight-Step IGMC Process

1.1. Global DatabaseGlobal Database2.2. Consumer/Prospect ValuationConsumer/Prospect Valuation3.3. Contact Points and PreferencesContact Points and Preferences4.4. Brands RelationshipsBrands Relationships5.5. Message Development and DeliveryMessage Development and Delivery6.6. Estimate of Return on Customer Investment (ROCI)Estimate of Return on Customer Investment (ROCI)7.7. Investment and AllocationInvestment and Allocation8.8. Marketplace MeasurementMarketplace Measurement

55

The Eight-Step Integrated Global The Eight-Step Integrated Global Marketing Communication ProcessMarketing Communication Process

IGMC

Steps 1Global Database Steps 2

Customer/ Prospect Valuation

Steps 3Contact Points/preferences

Steps 4Brand

Relationships Steps 5

Messages Development &

Delivery

Steps 8Marketplace

Measurement

Steps 7Investment

& Allocation

Steps 6Estimate of Return

on Customer Investment (ROCI)

Source: Don E. Schultz & Philip J Kitchen, Communicating Globally: An Integrated Marketing Approach, NTC Business Book, 2000


1.1. Global Customer and Global Customer and Prospect DatabasesProspect Databases

One of the key ingredients in the IGMC approach to One of the key ingredients in the IGMC approach to developing effective and efficient IGMC program is developing effective and efficient IGMC program is substantive, continually updated knowledge about substantive, continually updated knowledge about customers and prospects.customers and prospects.

That generally come from data an information stored That generally come from data an information stored electronically in a customer or prospect database or in electronically in a customer or prospect database or in databases that the organization may maintain.databases that the organization may maintain.

This simple phrase This simple phrase relationship with the customer or relationship with the customer or prospectprospect separates a database from a mailing list or separates a database from a mailing list or various types of segmentation schemes.various types of segmentation schemes.



To plan and manage marketing communication in global To plan and manage marketing communication in global basis, the organization simply must have information on basis, the organization simply must have information on its customer relationships, whether that be sales, its customer relationships, whether that be sales, services, or simply contact with customers and services, or simply contact with customers and prospects.prospects.

Without this type of data, the firms must resort to Without this type of data, the firms must resort to practicing mass marketing on global scale.practicing mass marketing on global scale.

The database is the core of any IGMC planning process.The database is the core of any IGMC planning process.



Most useful databases contain, at a minimum, details on Most useful databases contain, at a minimum, details on past purchases by the customer or qualifications of past purchases by the customer or qualifications of prospects that allow them to be separated from mere prospects that allow them to be separated from mere suspects.suspects.

Generally, most organization will have demographic Generally, most organization will have demographic details attached to their customer’s records for details attached to their customer’s records for customers or end users.customers or end users.

In the business-to-business area, commonly the records In the business-to-business area, commonly the records will include products or services produced, number of will include products or services produced, number of employees, annual turnover, standard industrial code, employees, annual turnover, standard industrial code, and so on.and so on.



The key ingredient in the database is the relationship the The key ingredient in the database is the relationship the organization has develop with customers and prospects organization has develop with customers and prospects over time, reflected in data on purchases, inquiries, over time, reflected in data on purchases, inquiries, responses to promotions, and other behavioral data that responses to promotions, and other behavioral data that allow the organization to determine what actions the allow the organization to determine what actions the customers or prospects have taken in the past and thus customers or prospects have taken in the past and thus what might be expected in the future.what might be expected in the future.

If one can observe customer behavior over time, it is If one can observe customer behavior over time, it is much easier to understand the buying strategy the much easier to understand the buying strategy the customers are employing or at least the trade-offs being customers are employing or at least the trade-offs being made in brand purchase and supplier selection.made in brand purchase and supplier selection.



Database come in many form. Ideally they are electronic Database come in many form. Ideally they are electronic so the data can be managed and analyzed by multiple so the data can be managed and analyzed by multiple people in the organization.people in the organization.

The key ingredient in a database is bringing all the The key ingredient in a database is bringing all the known information and data about customers and known information and data about customers and prospects together in one easily accessible form, prospects together in one easily accessible form, whether that be electronic or hard copy.whether that be electronic or hard copy.



One of the major challenges for almost all organizations One of the major challenges for almost all organizations is simply gathering and combining the data that they is simply gathering and combining the data that they currently hold on customers and prospects and putting it currently hold on customers and prospects and putting it into some usable form that can be accessed by those into some usable form that can be accessed by those needing information, no matter where they may be or needing information, no matter where they may be or how the information might be used. how the information might be used.


2.2. Customer/ProspectCustomer/Prospect Valuation Valuation

The reason for this valuation is simple. If we are to invest The reason for this valuation is simple. If we are to invest the finite resources of the organization in cultivating the the finite resources of the organization in cultivating the best customers and prospects, we must have some way best customers and prospects, we must have some way of valuing each of them as a basis for this investment of valuing each of them as a basis for this investment process.process.

The best way we have found to value customers and The best way we have found to value customers and prospects is financially, that is, by determining their prospects is financially, that is, by determining their purchases, or what we call “purchases, or what we call “income flowincome flow”. ”.



2. Customer/Prospect 2. Customer/Prospect Valuation Valuation

If we know the financial value of a customer or prospect, If we know the financial value of a customer or prospect, we have a solid base from which we might determine the we have a solid base from which we might determine the amount we would be willing to invest to either retain, amount we would be willing to invest to either retain, grow, or migrate that customer to other products or grow, or migrate that customer to other products or services in our portfolio.services in our portfolio.

Likewise, if we have some idea of the financial value of a Likewise, if we have some idea of the financial value of a prospect, that is, how much income that person or group prospect, that is, how much income that person or group might generate in the future, we would have a fair idea of might generate in the future, we would have a fair idea of how much we would be willing to invest to acquire that how much we would be willing to invest to acquire that prospect and turn him or her into a customer.prospect and turn him or her into a customer.


3. Contact Points and 3. Contact Points and Preferences Preferences

Traditionally, marketing communications managers have Traditionally, marketing communications managers have made the decisions as to how and when and under what made the decisions as to how and when and under what circumstances customers and prospects were contacted, circumstances customers and prospects were contacted, or at least exposed to the organization’s marketing or at least exposed to the organization’s marketing messages.messages.

Thus, historically, the primary goal of the marketing Thus, historically, the primary goal of the marketing communicator has been to get the messages and communicator has been to get the messages and incentives in front of customers and prospects efficiently incentives in front of customers and prospects efficiently with only passing regard for effectiveness. with only passing regard for effectiveness.



As result, various forms of efficiency measures such as As result, various forms of efficiency measures such as cost per thousand delivered, gross impressions, total cost per thousand delivered, gross impressions, total audience, and the like have been developed.audience, and the like have been developed.

Only rarely have we developed or used effectiveness Only rarely have we developed or used effectiveness measures: cost per sale, cost per order, return on measures: cost per sale, cost per order, return on investment, or the like, except in direct selling situations.investment, or the like, except in direct selling situations.

When we use financial measures to value customers and When we use financial measures to value customers and prospects, many of our traditional media and prospects, many of our traditional media and communications tools become woefully in adequate. But, communications tools become woefully in adequate. But, there is a larger problem as well.there is a larger problem as well.



We are now beginning to understand that customers and We are now beginning to understand that customers and prospects come in contact with the organization in a prospects come in contact with the organization in a multiple of ways in the market place.multiple of ways in the market place.

Often the marketplace contacts come about with Often the marketplace contacts come about with employees or channel partners or services groups or employees or channel partners or services groups or other non marketing people.other non marketing people.

Yet these communication or brand contacts are often Yet these communication or brand contacts are often much more powerful messages deliver. much more powerful messages deliver.



Thus our focus in the planning process is to attempt to Thus our focus in the planning process is to attempt to audit and value the various ways in which customers audit and value the various ways in which customers already come into contact with the organization.already come into contact with the organization.

From this we can then view each of those contact points From this we can then view each of those contact points as useful methods of communicating in the future.as useful methods of communicating in the future.

In many cases the most powerful communication tools at In many cases the most powerful communication tools at the disposal of the IGMC manager are non-controllable the disposal of the IGMC manager are non-controllable but manageable communication methods both internal but manageable communication methods both internal and external to the organization.and external to the organization.



It is critical to determine what communication approaches It is critical to determine what communication approaches customers and prospects prefer since, given the many customers and prospects prefer since, given the many alternatives available, we simply can’t push our wishes on alternatives available, we simply can’t push our wishes on them. Instead we must respond to their preferences.them. Instead we must respond to their preferences.

Another important part of understanding contact points is Another important part of understanding contact points is the impact of various internal and external stakeholders.the impact of various internal and external stakeholders.

The group may achieve great public awareness through The group may achieve great public awareness through the press and electronic media. Obviously the global the press and electronic media. Obviously the global marketing communication planner must take these marketing communication planner must take these activities into consideration.activities into consideration.


4. Brand or Organization 4. Brand or Organization Relationships Relationships

Obviously, there are major differences in how a firm Obviously, there are major differences in how a firm should or would communicate with a long-term, valuable should or would communicate with a long-term, valuable customer and how it would communicate with the ones customer and how it would communicate with the ones which had little or no relationship.which had little or no relationship.

That sound obvious, but many global organizations That sound obvious, but many global organizations attempt to treat all customers the same, or at least they attempt to treat all customers the same, or at least they do so in their communication activities.do so in their communication activities.

Every one is the same to the communication manager, Every one is the same to the communication manager, so all treated the same in the communication program.so all treated the same in the communication program.



Often, this is done in the guise of efficiency is not always Often, this is done in the guise of efficiency is not always more effective.more effective.

And in the customer-driven marketplace of the 21st-And in the customer-driven marketplace of the 21st-century it is effectiveness that will count the most. century it is effectiveness that will count the most.

We have different relationship with different customers We have different relationship with different customers and prospects.and prospects.



We simply must understand the relationship customers We simply must understand the relationship customers and prospects with our firm to develop effective and prospects with our firm to develop effective marketing communication program.marketing communication program.

We must also understand the relationship customers We must also understand the relationship customers believe they have with us.believe they have with us.

For the most part customers have relationships with For the most part customers have relationships with brands; that is, they have confidence in the brand and brands; that is, they have confidence in the brand and the organization that produces it.the organization that produces it.



Customers buy brands. Customers thrust brands. Customers buy brands. Customers thrust brands. Customer rely on brands, but most of all customers have Customer rely on brands, but most of all customers have relationships with brands. relationships with brands.

To build effective communication programs, the marketing To build effective communication programs, the marketing communication planner must know what type of communication planner must know what type of relationship the customer has with the brand. relationship the customer has with the brand.

It is also important to take into account the activities of It is also important to take into account the activities of various stakeholder groups. The goals of these groups various stakeholder groups. The goals of these groups may be either to enhance or to destroy brand relationship.may be either to enhance or to destroy brand relationship.


5. Message and Incentive 5. Message and Incentive Development and Delivery Development and Delivery

One of the most dramatically different features of the One of the most dramatically different features of the IGMC process is that development messages and IGMC process is that development messages and incentives, generally at the heart of any marketing incentives, generally at the heart of any marketing communication program, is fairly far down in the communication program, is fairly far down in the development process.development process.

That reflects the basic premise of IGMC; you can’t That reflects the basic premise of IGMC; you can’t develop effective messages or incentives unless and develop effective messages or incentives unless and until you understand the people and organizations you until you understand the people and organizations you are trying to communicate with.are trying to communicate with.


5. Message and Incentive 5. Message and Incentive Development and Delivery Development and DeliveryCreative is important, but it must be controlled creative Creative is important, but it must be controlled creative that reaches and impacts customers and prospects, not that reaches and impacts customers and prospects, not creative that is simply unique and different for its own creative that is simply unique and different for its own sake.sake.

You may have noticed that we use the terms You may have noticed that we use the terms messagesmessages or or incentivesincentives rather than advertising or public relations rather than advertising or public relations or sales promotion. This is intentional.or sales promotion. This is intentional.

We have found that customers rarely differentiate among We have found that customers rarely differentiate among the functional areas of marketing communication. the functional areas of marketing communication.


5. Message and Incentive 5. Message and Incentive Development and Delivery Development and DeliveryAlong with the development of messages and incentives, Along with the development of messages and incentives, this step includes delivery system. this step includes delivery system.

Historically, we have thought of delivery systems as being Historically, we have thought of delivery systems as being forms of media – print or broadcast, in-store or through the forms of media – print or broadcast, in-store or through the mail, and so fort.mail, and so fort.

The broader view, that delivery systems include whenever The broader view, that delivery systems include whenever and wherever a customer or prospect comes into contact and wherever a customer or prospect comes into contact with the brand or the organization, give us a new view of with the brand or the organization, give us a new view of how we might communicate with our audiences.how we might communicate with our audiences.


5. Message and Incentive 5. Message and Incentive Development and Delivery Development and DeliveryIn truth the concept of delivery systems opens up totally In truth the concept of delivery systems opens up totally new form of communication for the IGMC planner. new form of communication for the IGMC planner.

With this new freedom for the planner, however, comes With this new freedom for the planner, however, comes accountability.accountability.

That is, if new and unique forms of delivery are to be That is, if new and unique forms of delivery are to be used, there must be methods and ways of measuring the used, there must be methods and ways of measuring the impact and effect of those delivery systems so they can impact and effect of those delivery systems so they can be compared wit existing media forms.be compared wit existing media forms.


5. Message and Incentive 5. Message and Incentive Development and Delivery Development and DeliveryDelivery system may be more important in the 21Delivery system may be more important in the 21stst--century marketplace than messages or incentives.century marketplace than messages or incentives.

If the message or incentive can’t be delivered to If the message or incentive can’t be delivered to intended customer or prospect, it really doesn’t matter intended customer or prospect, it really doesn’t matter what the message or inventive is or was.what the message or inventive is or was.

Thus delivery system have become extremely important Thus delivery system have become extremely important and will become even more so in our view in the years and will become even more so in our view in the years ahead.ahead.


5. Message and Incentive 5. Message and Incentive Development and Delivery Development and DeliveryObviously one of the major decisions at this point will be Obviously one of the major decisions at this point will be whether or not the marketing communication program whether or not the marketing communication program should be local, regional, or global.should be local, regional, or global.


6. Estimate of Return on 6. Estimate of Return on Customer Investment (ROCI) Customer Investment (ROCI)With a thorough knowledge of customers and prospects, With a thorough knowledge of customers and prospects, their knowledge and understanding of our firm and our their knowledge and understanding of our firm and our brands, and their relationship with them and to us, we brands, and their relationship with them and to us, we now should be able to develop appropriate messages now should be able to develop appropriate messages and incentives and find ways to deliver them to relevant and incentives and find ways to deliver them to relevant customers and prospects.customers and prospects.

The next logical step is to estimate what type of return or The next logical step is to estimate what type of return or response we might generate from marketing activities.response we might generate from marketing activities.

In the IGMC process, we call this In the IGMC process, we call this return on customer return on customer investment (IGMC)investment (IGMC). Not the more return on investment . Not the more return on investment (ROI).(ROI).


6. Estimate of Return on 6. Estimate of Return on Customer Investment (ROCI) Customer Investment (ROCI)Most organizations get absolutely nothing back from Most organizations get absolutely nothing back from their advertising investments. That is, no return is given their advertising investments. That is, no return is given for their level of spending.for their level of spending.

Income from marketing communication comes not from Income from marketing communication comes not from doing the activities or events or even doing them well.doing the activities or events or even doing them well.

The only return an organization gets from its The only return an organization gets from its communication activities is from customers and communication activities is from customers and prospects. prospects.


6. Estimate of Return on 6. Estimate of Return on Customer Investment (ROCI) Customer Investment (ROCI)They are the ones who respond to the communication They are the ones who respond to the communication programs by purchasing the firm’s goods or services, programs by purchasing the firm’s goods or services, thereby producing income.thereby producing income.

Therefore our approach is to attempt to estimate what Therefore our approach is to attempt to estimate what type of return we might get from investing in various type of return we might get from investing in various customers and customer groups.customers and customer groups.

Obviously, the better the customers or prospects we Obviously, the better the customers or prospects we choose to invest in, the better our returns should be.choose to invest in, the better our returns should be.


6. Estimate of Return on 6. Estimate of Return on Customer Investment (ROCI) Customer Investment (ROCI)One of the key ingredients necessary to estimate any One of the key ingredients necessary to estimate any type of return from customer is knowledge of the current type of return from customer is knowledge of the current value of that customer.value of that customer.

In other words, we must know what the customer is In other words, we must know what the customer is worth now to be able to estimate what we might get back worth now to be able to estimate what we might get back from any level of investment in the future.from any level of investment in the future.

Our initial information will come from step two, where we Our initial information will come from step two, where we estimated the current and potential value of the estimated the current and potential value of the customer.customer.


6. Estimate of Return on 6. Estimate of Return on Customer Investment (ROCI) Customer Investment (ROCI)By knowing that value and what our investment in By knowing that value and what our investment in messages and incentives might be, we can began to messages and incentives might be, we can began to estimate what type of return we might generate.estimate what type of return we might generate.

Clearly, in planning IGMC program, Clearly, in planning IGMC program, we will rely on we will rely on estimates of returns-estimates of returns-that is, based on experience or that is, based on experience or research or management knowledge, what we research or management knowledge, what we reasonably assume might come backreasonably assume might come back..

Once the program is in the marketplace, however, if we Once the program is in the marketplace, however, if we have set up the necessary have set up the necessary closed-loop systemsclosed-loop systems, we , we should be able to measure the actual results of our should be able to measure the actual results of our investment.investment.


6. Estimate of Return on 6. Estimate of Return on Customer Investment (ROCI) Customer Investment (ROCI)Thus we start with estimates and convert those into Thus we start with estimates and convert those into actual returns as we capture marketplace results. actual returns as we capture marketplace results.

This initial estimating activity is critically important to the This initial estimating activity is critically important to the IGMC process. We generally have before us a wide IGMC process. We generally have before us a wide variety of activities and alternative messages and variety of activities and alternative messages and communication programs.communication programs.

Only by estimating in advance can we determine which Only by estimating in advance can we determine which might be most valuable or return the greatest result to might be most valuable or return the greatest result to the organization.the organization.



7. Investment and Allocation7. Investment and Allocation

This is primarily a process of matching up costs of various This is primarily a process of matching up costs of various marketing communication activities and testing them marketing communication activities and testing them against estimated returns.against estimated returns.

Here a great deal of judgment is needed along with the Here a great deal of judgment is needed along with the information and material that is contained in our databases information and material that is contained in our databases and our actual marketplace experience.and our actual marketplace experience.

The critical step in most investment and allocation The critical step in most investment and allocation decisions is to take zero-based budgeting approach. There decisions is to take zero-based budgeting approach. There should be no preconceived conditions or preset media or should be no preconceived conditions or preset media or delivery choices. delivery choices.


7. Investment and Allocation7. Investment and Allocation

Each decision should be made independently, allowing for Each decision should be made independently, allowing for interaction among the various programs being planned and interaction among the various programs being planned and executed. executed.

Inherent in this approach is the idea of media neutrality: Inherent in this approach is the idea of media neutrality: decisions will be based on what will provide the best return to decisions will be based on what will provide the best return to the organization, not on which medium is most attractive to the organization, not on which medium is most attractive to the planner or what might be considered the “sexiest” the planner or what might be considered the “sexiest” allocation decision. allocation decision.

We are dealing with the finite resources in developing the We are dealing with the finite resources in developing the best customers and prospects in hope of the greatest returns.best customers and prospects in hope of the greatest returns.


8. Market Measurement8. Market Measurement

Once the investment and allocation decisions have been Once the investment and allocation decisions have been made, the final step is to set up systems of made, the final step is to set up systems of measurements to determine what really happened in the measurements to determine what really happened in the marketplace.marketplace.

Of critical importance here is the understanding that Of critical importance here is the understanding that while the marketplace measurement really sums up the while the marketplace measurement really sums up the results of our IGMC program, that is not the end of the results of our IGMC program, that is not the end of the process. In fact it is really the beginning.process. In fact it is really the beginning.


8. Market Measurement8. Market Measurement

We will input the marketplace results of our global We will input the marketplace results of our global marketing communication programs into our customer or marketing communication programs into our customer or prospect database.prospect database.

The data enhanced by our results will provide the base The data enhanced by our results will provide the base from which we can start the process all over again. It is from which we can start the process all over again. It is this closed-loop, circular system that really differentiates this closed-loop, circular system that really differentiates the IGMC approach from other, generally ad hoc the IGMC approach from other, generally ad hoc approached.approached.

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THE IGMC PLANNING PROCESS

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