Transcript the eight-step igmc planning process

THE IGMC PLANNING
PROCESS
Sunarto Prayitno
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Background
The first step in the development of an IGMC program is
the planning process.
The eight-step planning process discusses on the
following pages has been used successfully with a
number of companies around the world.
It is a logical approach that leads the planner through the
various steps involved in developing a successful
communication program.
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Background
Some organizations may need to expand some of the
steps; other may need to delete some of the activities.
Much depends on the specific organization in its current
contextual circumstances for which the communication
program is being planned.
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The Eight-Step IGMC Process
1.
2.
3.
4.
5.
6.
7.
8.
Global Database
Consumer/Prospect Valuation
Contact Points and Preferences
Brands Relationships
Message Development and Delivery
Estimate of Return on Customer Investment (ROCI)
Investment and Allocation
Marketplace Measurement
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The Eight-Step Integrated Global Marketing
Communication Process
Steps 8
Marketplace
Measurement
Steps 7
Investment
& Allocation
Steps 6
Estimate of Return
on Customer Investment
(ROCI)
Steps 1
Global Database
IGMC
Steps 2
Customer/
Prospect Valuation
Steps 3
Contact Points/
preferences
Steps 4
Brand Relationships
Steps 5
Messages Development
& Delivery
5
Source: Don E. Schultz & Philip J Kitchen, Communicating Globally: An Integrated Marketing Approach, NTC Business Book, 2000
1. Global Customer and
Prospect Databases
One of the key ingredients in the IGMC approach to
developing effective and efficient IGMC program is
substantive, continually updated knowledge about
customers and prospects.
That generally come from data an information stored
electronically in a customer or prospect database or in
databases that the organization may maintain.
This simple phrase relationship with the customer or
prospect separates a database from a mailing list or
various types of segmentation schemes.
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1. Global Customer and
Prospect Databases
To plan and manage marketing communication in global
basis, the organization simply must have information on
its customer relationships, whether that be sales,
services, or simply contact with customers and
prospects.
Without this type of data, the firms must resort to
practicing mass marketing on global scale.
The database is the core of any IGMC planning process.
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1. Global Customer and
Prospect Databases
Most useful databases contain, at a minimum, details on
past purchases by the customer or qualifications of
prospects that allow them to be separated from mere
suspects.
Generally, most organization will have demographic
details attached to their customer’s records for
customers or end users.
In the business-to-business area, commonly the records
will include products or services produced, number of
employees, annual turnover, standard industrial code,
and so on.
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1. Global Customer and
Prospect Databases
The key ingredient in the database is the relationship the
organization has develop with customers and prospects
over time, reflected in data on purchases, inquiries,
responses to promotions, and other behavioral data that
allow the organization to determine what actions the
customers or prospects have taken in the past and thus
what might be expected in the future.
If one can observe customer behavior over time, it is
much easier to understand the buying strategy the
customers are employing or at least the trade-offs being
made in brand purchase and supplier selection.
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1. Global Customer and
Prospect Databases
Database come in many form. Ideally they are electronic
so the data can be managed and analyzed by multiple
people in the organization.
The key ingredient in a database is bringing all the
known information and data about customers and
prospects together in one easily accessible form,
whether that be electronic or hard copy.
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1. Global Customer and
Prospect Databases
One of the major challenges for almost all organizations
is simply gathering and combining the data that they
currently hold on customers and prospects and putting it
into some usable form that can be accessed by those
needing information, no matter where they may be or
how the information might be used.
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2. Customer/Prospect
Valuation
The reason for this valuation is simple. If we are to invest
the finite resources of the organization in cultivating the
best customers and prospects, we must have some way
of valuing each of them as a basis for this investment
process.
The best way we have found to value customers and
prospects is financially, that is, by determining their
purchases, or what we call “income flow”.
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2. Customer/Prospect
Valuation
If we know the financial value of a customer or prospect,
we have a solid base from which we might determine the
amount we would be willing to invest to either retain,
grow, or migrate that customer to other products or
services in our portfolio.
Likewise, if we have some idea of the financial value of a
prospect, that is, how much income that person or group
might generate in the future, we would have a fair idea of
how much we would be willing to invest to acquire that
prospect and turn him or her into a customer.
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3. Contact Points and
Preferences
Traditionally, marketing communications managers have
made the decisions as to how and when and under what
circumstances customers and prospects were contacted,
or at least exposed to the organization’s marketing
messages.
Thus, historically, the primary goal of the marketing
communicator has been to get the messages and
incentives in front of customers and prospects efficiently
with only passing regard for effectiveness.
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3. Contact Points and
Preferences
As result, various forms of efficiency measures such as
cost per thousand delivered, gross impressions, total
audience, and the like have been developed.
Only rarely have we developed or used effectiveness
measures: cost per sale, cost per order, return on
investment, or the like, except in direct selling situations.
When we use financial measures to value customers
and prospects, many of our traditional media and
communications tools become woefully in adequate. But,
there is a larger problem as well.
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3. Contact Points and
Preferences
We are now beginning to understand that customers and
prospects come in contact with the organization in a
multiple of ways in the market place.
Often the marketplace contacts come about with
employees or channel partners or services groups or
other non marketing people.
Yet these communication or brand contacts are often
much more powerful messages deliver.
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3. Contact Points and
Preferences
Thus our focus in the planning process is to attempt to
audit and value the various ways in which customers
already come into contact with the organization.
From this we can then view each of those contact points
as useful methods of communicating in the future.
In many cases the most powerful communication tools at
the disposal of the IGMC manager are non-controllable
but manageable communication methods both internal
and external to the organization.
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3. Contact Points and
Preferences
It is critical to determine what communication
approaches customers and prospects prefer since, given
the many alternatives available, we simply can’t push our
wishes on them. Instead we must respond to their
preferences.
Another important part of understanding contact points is
the impact of various internal and external stakeholders.
The group may achieve great public awareness through
the press and electronic media. Obviously the global
marketing communication planner must take these
activities into consideration.
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4. Brand or Organization
Relationships
Obviously, there are major differences in how a firm
should or would communicate with a long-term, valuable
customer and how it would communicate with the ones
which had little or no relationship.
That sound obvious, but many global organizations
attempt to treat all customers the same, or at least they
do so in their communication activities.
Every one is the same to the communication manager,
so all treated the same in the communication program.
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4. Brand or Organization
Relationships
Often, this is done in the guise of efficiency is not always
more effective.
And in the customer-driven marketplace of the 21stcentury it is effectiveness that will count the most.
We have different relationship with different customers
and prospects.
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4. Brand or Organization
Relationships
We simply must understand the relationship customers
and prospects with our firm to develop effective
marketing communication program.
We must also understand the relationship customers
believe they have with us.
For the most part customers have relationships with
brands; that is, they have confidence in the brand and
the organization that produces it.
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4. Brand or Organization
Relationships
Customers buy brands. Customers thrust brands.
Customer rely on brands, but most of all customers have
relationships with brands.
To build effective communication programs, the
marketing communication planner must know what type
of relationship the customer has with the brand.
It is also important to take into account the activities of
various stakeholder groups. The goals of these groups
may be either to enhance or to destroy brand
relationship.
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5. Message and Incentive
Development and Delivery
One of the most dramatically different features of the
IGMC process is that development messages and
incentives, generally at the heart of any marketing
communication program, is fairly far down in the
development process.
That reflects the basic premise of IGMC; you can’t
develop effective messages or incentives unless and
until you understand the people and organizations you
are trying to communicate with.
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5. Message and Incentive
Development and Delivery
Creative is important, but it must be controlled creative
that reaches and impacts customers and prospects, not
creative that is simply unique and different for its own
sake.
You may have noticed that we use the terms messages
or incentives rather than advertising or public relations
or sales promotion. This is intentional.
We have found that customers rarely differentiate among
the functional areas of marketing communication.
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5. Message and Incentive
Development and Delivery
Along with the development of messages and incentives,
this step includes delivery system.
Historically, we have thought of delivery systems as
being forms of media – print or broadcast, in-store or
through the mail, and so fort.
The broader view, that delivery systems include
whenever and wherever a customer or prospect comes
into contact with the brand or the organization, give us a
new view of how we might communicate with our
audiences.
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5. Message and Incentive
Development and Delivery
In truth the concept of delivery systems opens up totally
new form of communication for the IGMC planner.
With this new freedom for the planner, however, comes
accountability.
That is, if new and unique forms of delivery are to be
used, there must be methods and ways of measuring the
impact and effect of those delivery systems so they can
be compared with existing media forms.
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5. Message and Incentive
Development and Delivery
Delivery system may be more important in the 21stcentury marketplace than messages or incentives.
If the message or incentive can’t be delivered to
intended customer or prospect, it really doesn’t matter
what the message or inventive is or was.
Thus delivery system have become extremely important
and will become even more so in our view in the years
ahead.
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5. Message and Incentive
Development and Delivery
Obviously one of the major decisions at this point will be
whether or not the marketing communication program
should be local, regional, or global.
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6. Estimate of Return on
Customer Investment (ROCI)
With a thorough knowledge of customers and prospects,
their knowledge and understanding of our firm and our
brands, and their relationship with them and to us, we
now should be able to develop appropriate messages
and incentives and find ways to deliver them to relevant
customers and prospects.
The next logical step is to estimate what type of return or
response we might generate from marketing activities.
In the IGMC process, we call this return on customer
investment (IGMC). Not the more return on investment
(ROI).
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6. Estimate of Return on
Customer Investment (ROCI)
Most organizations get absolutely nothing back from
their advertising investments. That is, no return is given
for their level of spending.
Income from marketing communication comes not from
doing the activities or events or even doing them well.
The only return an organization gets from its
communication activities is from customers and
prospects.
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6. Estimate of Return on
Customer Investment (ROCI)
They are the ones who respond to the communication
programs by purchasing the firm’s goods or services,
thereby producing income.
Therefore our approach is to attempt to estimate what
type of return we might get from investing in various
customers and customer groups.
Obviously, the better the customers or prospects we
choose to invest in, the better our returns should be.
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6. Estimate of Return on
Customer Investment (ROCI)
One of the key ingredients necessary to estimate any
type of return from customer is knowledge of the current
value of that customer.
In other words, we must know what the customer is
worth now to be able to estimate what we might get back
from any level of investment in the future.
Our initial information will come from step two, where we
estimated the current and potential value of the
customer.
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6. Estimate of Return on
Customer Investment (ROCI)
By knowing that value and what our investment in
messages and incentives might be, we can began to
estimate what type of return we might generate.
Clearly, in planning IGMC program, we will rely on
estimates of returns-that is, based on experience or
research or management knowledge, what we
reasonably assume might come back.
Once the program is in the marketplace, however, if we
have set up the necessary closed-loop systems, we
should be able to measure the actual results of our
investment.
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6. Estimate of Return on
Customer Investment (ROCI)
Thus we start with estimates and convert those into
actual returns as we capture marketplace results.
This initial estimating activity is critically important to the
IGMC process. We generally have before us a wide
variety of activities and alternative messages and
communication programs.
Only by estimating in advance can we determine which
might be most valuable or return the greatest result to
the organization.
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7. Investment and Allocation
This is primarily a process of matching up costs of
various marketing communication activities and testing
them against estimated returns.
Here a great deal of judgment is needed along with the
information and material that is contained in our
databases and our actual marketplace experience.
The critical step in most investment and allocation
decisions is to take zero-based budgeting approach.
There should be no preconceived conditions or preset
media or delivery choices.
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7. Investment and Allocation
Each decision should be made independently, allowing
for interaction among the various programs being
planned and executed.
Inherent in this approach is the idea of media neutrality:
decisions will be based on what will provide the best
return to the organization, not on which medium is most
attractive to the planner or what might be considered the
“sexiest” allocation decision.
We are dealing with the finite resources in developing
the best customers and prospects in hope of the greatest
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returns.
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8. Market Measurement
Once the investment and allocation decisions have been
made, the final step is to set up systems of
measurements to determine what really happened in the
marketplace.
Of critical importance here is the understanding that
while the marketplace measurement really sums up the
results of our IGMC program, that is not the end of the
process. In fact it is really the beginning.
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8. Market Measurement
We will input the marketplace results of our global
marketing communication programs into our customer or
prospect database.
The data enhanced by our results will provide the base
from which we can start the process all over again. It is
this closed-loop, circular system that really differentiates
the IGMC approach from other, generally ad hoc
approached.
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