By Kathleen Cassedy

A resounding theme at ATME's past few annual conferences has revolved around Integrated Marketing Communications (IMC). Each year, new case studies, techniques, and practices are shared that involve this emerging and evolving discipline. If you wonder why a travel marketer would share company programs, both strategic and tactical, with a room full of other marketers, it may have something to do with the travel industry as a sector, and the way its segments interact. The business of travel and tourism has yet to near its capacity, since more people travel each year. Even the concept of travel is changing. For example, once leisure travel was considered a discretionary activity, but now for many, it has become a necessity, where variables of distance, place, and price may change, but the act of traveling to a destination or event does not.

Different travel segment companies often partner with each other to create packages or ease of travel for their customers and cost savings for themselves, while different travel product and service organizations have aligned with non-travel businesses when they share the same market group.

As market researchers uncover emerging market niches, products and services are quickly developed to attract these groups. And consolidation, when economically viable, is the way players hope to dominate segments. The business of travel, impacted by the Information Age, is still in transition, and the winners are yet to emerge.

DOING MORE WITH LESS

At the '98 ATME conference this past May, held just outside Washington, D.C., at the Radisson Plaza at Mark Center, Alexandria, Virginia, more than 200 new and old members came together to learn, to share, and even to create their own alliances. The conference theme, "Doing More with Less: Effective Solutions to Today's Marketing Dilemma," provided the basis for revealing and critical presentations and discussion.

MAXIMIZING BUDGETS WITH IMC

Guest speaker Don Schultz differed with the conference theme, doing more with less, (intended to refer to an organization's marketing budget, staff and time) when that phrase is applied to market research data. Schultz maintained that companies need to do more with more, referring to the vast amounts of customer market data that companies collect, yet fail to use in analysis of whom are their best customers and then to use that information to create and implement programs that retain and grow business.

Schultz, a professor of Integrated Marketing Research Communications at Northwestern University, is also president of Agora Inc., a consulting company, and senior partner of Targetbase Marketing International and Targetbase Institute.

Because marketers must contend with finite budgets and time, Schultz said that it is critical that marketers identify and focus on their best customers. Best customers can be distinguished by how much business they bring to an organization, and how much potential business that they could bring. When marketers know how much a customer is worth, they can determine how much to spend to retain them, and how much to invest in growing their business, Schultz said.

USING BETTER MEASURES

Marketers need to measure return on their brand investments, Schultz said, rather than measure attitudes and awareness. "It doesn't matter whether people can recite your jingles or remember your ads, what matters is how many dollars they brought to your business," he said. "It's income flows from customers," he maintained, "not how many sales we had, but what kind of incremental revenues we generated."

Rather than focus on the way marketing and communications programs are delivered to customers, marketers should concentrate on how customers receive the information. "That's the brand view," Schultz said. Rather than measure inquiries from brochures and advertisements, etc., measure the actual outcome, not the output, he said.

When marketers can justify what they spend by the revenues their marketing programs bring in, management will begin looking at marketing as a profit center, rather than a cost center, Schultz asserted. When travel marketers deliver revenues in access of costs, marketers could borrow funds to initiate marketing programs.

Organizations need to consider two spending levels: Business building and brand building. "When organizations treat marketing and communications as marginal cost and revenue, you can actually turn that into a variable cost of doing business," Schultz said. In determining budgets, organizations must assign a value to their brand, and invest in maintaining its integrity as a replenishment cost, just as they do for other components of the business that are regularly renovated or upgraded.

"The brand is the most important thing you have, because it signifies one simple thing: A relationship between your organization with a group of customers," Schultz said.

BUSINESS BUILDING

· Short-term revenues

· Transaction

· Immediate expense

· On the margin

· Variable costs

BRAND BUILDING

· Long-term returns

· Brand value

· Amortized investment

· Replenishment

· Fixed cost

Schultz urged travel marketers to design their marketing programs as a closed loop financial model, in which marketing dollars are measured. "In the 21st century, can marketers really afford not to know how much to invest, whom to invest against (competition), and what returns you will get?" he asked.

IMC ON THE INTERNET

Consider these facts: 41.5 million people in the United States have used the Internet in the past 30 days; a new user goes online every 1.8 seconds; the Internet is now in 24 percent of U.S. households; and by year 2000, that percentage is expected to reach 40 percent.

Who are these Web users? Their median age is 37, and more than half are college educated. Once online, the top three areas they search for information are: (1) arts and entertainment, (2) travel and leisure, and (3) business and finance. A Jupiter Communications study for the Travel Industry Association of America estimates that by year 2002, up to 8.9 billion international users will retrieve travel information on the World Wide Web.

Don Logan, president of Trinity Communications, which describes itself as an integrated marketing communications agency, rather than an advertising agency, noted that with these kind of numbers, the Internet offers incredible marketing opportunities.

The Internet, which allows access by the end-user 24 hours a day, every day, facilitates customized and target marketing. Since customers are more likely to make online purchases for products and services that they know about, branding becomes integral to successful marketing and selling over the Web. Logan defined brand as a promise of experiences, and the sum of all messages by the organization.

CUSTOMERS' BRAND VIEW

Marketers must create marketing programs from their customers' points of view: How do customers perceive your organization? What type of information do they seek? This is especially important to consider when an organization builds its Web site, said Logan, its market and market niche groups should be able to easily find and access the specific information they want about the organizations' services or products. For example, if the organization is a hotel, its Web site could comprise six to eight different subject areas, encompassing the hotel's various functions, such as food and beverage, reservations, special events, meeting rooms, etc., said Logan. Marketers must also create marketing programs that can drive customers and prospects to their Web sites.

GETTING STARTED WITH IMC

Schultz presented the results of a best practices study, regarding organizations that are embracing integrated marketing communications. Overall, the study discovered that these organizations do not need to collect more client data, but that they need to provide this information to marketers and to market partners. Among the most difficult challenges of establishing IMC is aligning internal practices with external promises, Schultz noted.

Organizations that successfully implement integrated marketing communications do it with the full support of top management. IMC people gain complete control of the brand and brand communications, and treat the marketing function from a financial standpoint. "What we have to do is convert marketing into a management discipline, not a practical communication discipline," Schultz said. Because it is difficult to integrate an entire organization, marketers initially need to demonstrate it works in particular areas, then expand that out, he said.

KEY FINDINGS

Best Practices Organizations of IMC...

· Have very good internal communications.

· Take charge of the integration process because the process is too important to delegate to an outside agency or supplier. This often involves a communication audit to determine all the places they-who represent the brand, or the brand, come in contact with customers.

· Gather and use behavioral data about their customers. Often, organizations find they already have this data, but are not using it.

· Create a variety of feedback channels from other departments to gather information.

· Align internal practices and processes with external communications, so that organizations deliver what they promise.

· Maintain a greater number of data sources and share it with the marketing communications department, which uses it to plan and develop programs.

· Maintain global integrated databases, rather than separate geographically organized databases.

· Incorporate information technology into communication planning, development, and execution to functionally turn customer data into customer knowledge.

· Use available technology to create customized communication.

· Give prominent roles to market communications people in strategic planning and new product development processes. They are given bottom line responsibility.

· Use a variety of tools to measure the effectiveness of marketing communication activities, but still need to incorporate financial measures.

· Are customer-focused, yet this study showed that organizations still need to refine or change their systems, processes, approaches, and sometimes even their products and services to really become customer focused.