Introduction: what is ‘integrated marketing’ and how can it increase roi?

The typical strategic marketing plan includes a diverse set of tactics to brand, promote and sell your products or services to targeted prospects. In the absence of well-integrated marketing, different teams manage tactics independently, measuring and improving effectiveness in isolation without insight into the collective impact. While improvements in any one initiative are beneficial, many gaps exist where potential buyers are lost to competitors or inaction.

Marketing organizations can reach higher levels of effectiveness and efficiency with better insights, processes and tools to plan and execute integrated marketing across teams in specialized marketing and sales functions. The process begins with defining what integration level to pursue and understanding the ROI potential. With these in place, marketers can take the necessary steps to put the vision into practice.

Integrated Marketing Defined

Integration efforts can range from minimal changes to all-encompassing initiatives. Integration can be organized into three levels as shown in Figure 1. At its most basic level, “cohesive” integration involves minor modifications to outbound marketing for creative and message consistency. The second level is “cumulative” integration, which considers the series of tactics and timing that are aligned to the buyers’ stage in the purchase funnel. “Customer Relationship” integration, the third and most robust, leverages all customer data and interactions over time to drive needs-based marketing strategies and tactical initiatives that are personalized by customer segment.

high ROI Potential

Integrated marketing is intended to increase marketing effectiveness and efficiency by managing the portfolio of marketing contacts collectively instead of independently. Investment in integrated marketing primarily requires resources to manage coordination across teams and systems that enable better communications, shared data access, and workflow management.

Financial returns from incremental sales and incremental customer value are generated by leveraging synergies across contacts and closing gaps in the buyer’s decision-making process. Additional payback comes from eliminating duplicative marketing efforts and using shared assets to reduce costs.

Establish integrated marketing objectives

To better integrate marketing, the team’s objectives must focus on closing gaps to deliver greater effectiveness and efficiency – collectively – across marketing initiatives. Because the goal is to improve marketing’s contribution to sales and profitability, the objectives should identify which business outcomes will be influenced to increase profits and ROI. Four key outcomes that drive ROI include:

Incremental sales Conversion

A significant but very manageable outcome is improvement in generating incremental sales conversion. Companies rely on multiple marketing contacts and internal sales teams or external partners to drive sales. With additional insight into how marketing influences different stages of the purchase funnel, marketing contacts can be better aligned to minimize the funnel “leakage.” Think about prospects who were aware, had interest, became engaged or were educated from your marketing, but failed to buy. Are there marketing contacts that could be made at the right time to influence those buyers to continue their purchase journey? Closing these gaps will increase the collective impact to convert more sales.

Incremental, short-Term Customer Value

Tighter integration of targeting and messaging across all marketing contacts can result in educated and motivated customers ready to buy more, and buy more often. Integrated marketing has the potential to increase customer value outcomes by reaching segmented customer groups with marketing concentrated on the specific needs of each segment.

Improved Marketing efficiency

Efficiencies are gained by maximizing the collective impact of integrated programs over individual initiatives. Efficiencies come from sharing marketing assets such as creative imagery (reduces production costs while creating visual consistency), scaling back or eliminating tactics that overlap without incremental contribution, and focusing marketing initiatives on the right target audience to reallocate investments away from low-value and low-potential segments.

More Profitable, Long-Term Customer Relationships

The most profitable outcome is increasing long-term customer relationship value, from acquisition to repeat purchase, cross-sell and retention. This advanced approach requires integrating all contacts with the customer, capturing intelligence to better know your customers, and adapting marketing touch points as customer needs change. Using integrated marketing to increase total customer value goes beyond marketing, however, and must include all aspects of the business that influence the customer experience, such as product quality, service delivery, customer support and any other type of customer interaction.

Your objectives must define the business outcomes you expect to influence by closing performance gaps. Objectives to reach new levels of integration must be clear, but do not have to be complex. Closing gaps can be completed in stages and built to increasingly advanced levels.

Here are five examples of objectives for different integration levels:

• Increase sales with better timing of in-store call-to-action programs that follow marketing driving awareness, interest and consideration.
• Increase sales conversion rates by ensuring that leads generated from marketing receive follow-up sales calls that are timely and consistent with the marketing messages that generated interest.
• Increase customer value per sale with a concentrated customer education campaign to support your higher-tier solution through consistent messaging in advertising, webinars, events and sales channels.
• Improve marketing efficiency by trimming back on marketing that only generates short-term awareness spikes without influencing consideration, purchase intention or incremental sales
• Increase customer relationship value by customizing marketing contacts to reach first-time buyers who have clearly different needs than existing customers, recognizing that generating repeat purchase behaviors with this segment greatly increases the probability of converting to ongoing buyers.

CMO Priorities to Drive Integration

• Establish that the collective objective is a higher priority than individual program objectives
• Eliminate barriers to collaboration in planning and measurements
• Request research to identify the primary gaps in the buyers’ funnel that must be addressed with integration
• Provide clear priorities for which business outcomes to improve

Prepare a strategy for executing integrated marketing

Multi-channel marketing might be considered integrated by virtue of a campaign’s timing, messaging or diverse forms of media. There is a level of integration in most well-designed multi-channel campaigns. What tends to be unknown is the synergy among these tactics and where gaps exist.

If 10 people are shouting different messages at someone, it creates an indistinguishable noise. But when all 10 shout the same message together, the unifying voices are much louder than any voice alone and the message gets through with conviction. This is the essence of an integrated marketing strategy designed around specific customer segments over multiple contacts or campaigns. The key components of the strategy – targeting, messaging, aligning tactics in the marketing mix, and maximizing customer engagement – must combine to create the collective voice that generates the desired outcomes. The table in Figure  shows how key aspects of the strategy evolve with each ascending level of integration.

It is worth noting that targeting has several dimensions that can be used together in any of the three levels of integrated marketing.

1. Value-ranked segments: Marketing is focused on top value tiers, where the extra cost and effort for integrated marketing can deliver higher ROI.
2. Needs-based segments: Marketing is varied for distinct target segments that can be reached effectively via multiple marketing channels with frequency and more relevant messages to drive higher conversions.
3. Funnel-stage segments: The contact strategy and tactical timing are modified to drive buyers into the next purchase funnel stage and ultimately increase conversion rates.

In setting up your marketing mix, the timing of campaign elements is extremely important. As an example, increasing awareness provides a good opportunity to generate more interest and demand, but awareness will fade if contacts are not motivated to engage in understanding or interacting with the brand. Even the follow-up sales call to leads generated from marketing must be timely in order to maximize sales conversion. If your sales team has capacity limitations, then marketing must adjust its lead volume through timing or introduce their own nurturing contacts to maintain interest until leads can be contacted.

As a very practical example, consider a telecommunications company that was running mass media advertising campaigns separately from its direct marketing decisions. A very basic analysis showed that direct marketing response rates increased when TV advertising generated awareness and educated consumers on key messages just prior to the direct campaign. But the advertising group had its own objectives, which had no connection to the sales generated through direct marketing. While the direct marketing team was trying to leverage this benefit from TV advertising, the advertising team would change its media plan based on production schedules and efficiency opportunities. Integrating these two areas of marketing would seem obvious, but without a clear plan and commitment across the marketing mix, each silo’s decisions remained independent.

Centralize data for intelligence and analytics

Insight into marketing performance and integration gaps comes from analysis of customer, marketing, and sales activities. Since integration involves coordinating across multiple teams, a single, centralized set of data goes a long way toward improving the level of analysis and insights.

Centralized data supports marketing integration through 1) better tracking of funnel progression, ) modeling to assess complex multi-channel campaigns, and 3) intelligence for better targeting and segmentation of marketing contacts, offers and messaging based on prior customer interactions.

The effort to centralize data can be quite a challenge. Ideally, it begins with a solid history of one to two years of data for analysis and baseline measurements. Customer data is largely dependent on what information was captured and where it is stored. As reported in the 2008 Lenskold Group / Kneebone Marketing ROI and Measurements Study, access to marketing data is lacking and rated lower than access to sales or financial data. Historical marketing data tends to reside in many different formats and with many different people, making it difficult but not impossible to aggregate.

In order to create consistency and support centralization across diverse groups or “silos,” the organization must set data standards, have consistent cleansing, provide automation, and ultimately feed all data into a single repository. This task is very detail-oriented and can benefit from a cross-organizational team, such as Marketing Operations, to manage and maintain.

[Download PDF for tables]

As sales, customer and marketing data becomes richer and unique to the individual relationship, you can tap into customer preferences to deliver value-added services that competitors without this data can never match. Fully integrated data allows you to reach the level of a customized relationship and maintain integration across all marketing and service contacts.

Data value comes from having tools for easy access and analysis. Automation solutions range from basic database tools to more advanced business intelligence and campaign management systems. Marketing automation further improves integration by overcoming the operational barriers with workflow management and standardized processes.

Measure and improve ROI

One of the challenges of marketing measurements in general is isolating the impact of any one initiative when there are many touch points with potential buyers. With integrated marketing, there is an added challenge: measuring the incremental benefit from multiple marketing initiatives working together.

There are four primary questions that measurement insights should address to assess and improve integrated marketing performance:

• What is the collective contribution and ROI of the integrated marketing initiative compared to alternative forms of integrated marketing?
• Are initiatives within the integrated program contributing incremental ROI?
• Where are gaps in the purchase funnel that need to be addressed?
• How can customer ROI be increased for customer relationship marketing initiatives?

Your primary measurement outputs should align to one of the four primary business outcomes to show incremental sales, value per sale, long-term customer value and/or marketing efficiency.

Collective and Initiative-specific Marketing Contribution

Modeling is the most effective measurement for assessing the sales lift of both the aggregate integrated marketing campaign and the individual tactics within the campaign. When data is rich enough over several months of marketing, the interaction effects of multiple tactics working together may also be detected.

The preferred methodology for comparing the collective impact of two or more different strategies or different tactical combinations is market testing. The results are more immediate than modeling and offer insights not just into what’s working, but also into what is working better.

Isolating the contribution of a specific initiative within the integrated marketing mix is also best accomplished through market testing. Market testing can answer strategic questions as to the influence on specific behaviors and funnel progression. Market testing provides more in-depth comparisons of sales lift, customer value, and perception changes, while modeling is generally limited to determining a single outcome such as sales volume. The ROI analysis is improved with measures of both sales volume and customer value from market testing.

The first ROI analysis compares two versions of a campaign with the same budget but different results from market testing. Version  was more effective at driving higher customer purchase value. While there was a slight decline in sales conversion, the total ROI was higher. An analysis of the funnel progression rate can be added to identify where and how the version  campaign under-performed relative to version 1.

The second market test assesses an enhanced version  campaign intended to improve the sales conversion rate with an additional $75,000. This measurement not only shows a higher ROI of the enhanced campaign but also shows an incremental ROI of the $75,000 marketing investment. The ROI of this new tactic is evaluated using Incremental ROI once a measurement isolates its impact from the balance of the integrated marketing mix.

Funnel gap assessment

Funnel measures help understand where and why buyers fail to progress to the next stage in the purchase funnel. Market research is typically needed for the top of the funnel to track awareness, consideration, perceptions and purchase intentions. Tracking captures online interactions, marketing responses and customer engagement to provide insight into funnel progression related to demand generation. Sales force automation that tracks the activity in the sales pipeline can add insight on specific leakage points and reasons

Customer ROI

Integration at the customized relationship level requires measurements across different campaigns and long-term customer purchase decisions. Customerlevel analyses are used to track changes in customer value over time. Analyses can assess a series of campaigns from customer acquisition through follow-up campaigns to drive repeat purchasing and cross-sale purchases. The aggregate marketing investment is evaluated against aggregate sales, revenues and profit to maximize the total return. This approach allows the organization to accept short-term losses from acquisition or the cost of customizing marketing in order to increase long-term customer value.

There are limitations to each measurement technique, including modeling and market testing. The ideal approach, especially given the complexities of integrated marketing, is to establish a comprehensive, integrated measurement plan that leverages multiple methodologies. Just as marketing effectiveness increases with integration, so does measurement effectiveness.

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Establish integration processes

One of the greatest challenges to creating well-integrated marketing is aligning stakeholders across multiple groups, both inside and outside of the marketing function. Each team has operational constraints and potentially conflicting objectives, not to mention their own styles and preferences they would rather not compromise. However, knocking down these barriers is crucial to executing on an integrated marketing strategy that delivers better results.

Joint Planning

Joint planning with marketing and sales stakeholders, plus involvement with service teams and channel partners, will set integrated marketing on the right course and minimize conflicts right from the start. Leadership for this type of effort should come from a customer segment manager accountable for performance of the segment or an independent process/planning team such as Marketing Operations, under the mandate of the CMO.

Shared goals and Metrics

An ROI analysis of integrated marketing should show higher profit potential than a non-integrated approach. Success is dependent on aligning all marketing toward a collective impact. Shared goals establish expectations for collaboration and put company priorities ahead of individual objectives. For example, shared metrics could include advertising’s lift on direct marketing response, or marketing and sales jointly owning the sales conversion rate for marketing-generated leads. All stakeholders should agree on one measurement plan that will be used to assess, diagnose and improve performance.

Shared assets and Campaign Calendars

Establishing a repository for shared assets, which can include visual and content files, supports the desired consistency across touch points but also delivers efficiency by reducing design and development expenses. While joint planning sets integration in motion, shared access to campaign calendars is necessary to keep initiatives in sync and execute with timing that maximizes impact.

Collaborative assessment of ROI

The measurements and insights that each team captures and collects must be brought together so the extended team can plan improvements together. It is important to keep in mind that the full benefit of integrated marketing may take time to reach its potential. The team must present both the positive and negative findings as part of the improvement process.

Conclusions

True marketing integration requires organizational alignment to provide each customer segment with marketing initiatives that are unified in message, timing and purpose. This alignment must be backed by systems and processes that enable integrated planning, execution and measurement. Integrated marketing holds clear potential for profitable growth as marketing closes gaps to improve performance, which in turn will generate incremental sales, improve customer value and strengthen longer-term relationships.

Integrated marketing can build over time. CMOs should begin with a solid foundation of consistent and cohesive communications and then move to more strategic integration around customer behaviors and needs. Measurements will provide the necessary insight to evaluate new integration initiatives and capture the ROI benefits from increased effectiveness and efficiency.