Step One: Customer Identification from Behavioral Data
Step Two: Valuation of Customers and Prospects
To develop effective, efficient plans and programs, the marketer must invest in various forms of marketing communication to influence the buyer or prospect’s behaviors. That means the marketer must find some way to determine how many units customers have bought, might buy now or perhaps buy in the future. Those units must then been converted into financial measures, commonly dollars. Marketing firms invest dollars in marketing communication, and, therefore, there must be some way to estimate how many dollars the firm should invest in various customers and prospects in terms of marketing communication funds and what type of returns the firm might expect to receive. This generally is assumed to be the level or amount of present or future income flows from those customers might be.
Step Three: Creating and Delivering Messages and Incentives
To develop and deliver effective marketing communication messages and incentives is key to any marketing communication program. Those messages and incentives should have some behavioral impact on customers and prospects. And, by delivering those messages and incentives effectively and efficiently, the marketer should be able to see some behavioral reinforcement or behavioral change in the customers and/or prospects to whom they are directed.
Step Four: Estimating Return on Customer Investment
If the marketer is able to develop and deliver effective messages and incentives against the identified customers and prospects, some behavioral change or reinforcement among those selected groups should occur. And, if the marketer knows enough about those customers or prospects, the communication planner should be able to forecast what those results might be. Thus, the goal of the IMC process is for the marketing communication manager to be able to estimate returns as well as identify expenditures.
Step Five: Budgeting, Allocation Evaluation, and Recycling
If the marcom manager has some idea about the returns the communication program will achieve, it should now be possible to develop a marketing communication investment plan. Budgeting or expenditures, therefore, are at the end of the process rather than at the beginning. The logic is simple: Unless and until the marketer knows enough about its customers and prospects to estimate their present and future value to the firm, it is quite difficult to estimate what level of marketing communication investment should be made in them. Thus, unless and until the manager can estimate what level of return might be achieved at a certain spending level, he or she really has no idea how much the firm could, would, or should invest. So, the final step in the IMC process is to invest the firm’s resources in marketing communication programs to the selected customers, measure the returns, and use that as the basis for the next level of investment.