WHETHER YOU LABEL today’s marketing models as relationship, database, loyalty, retention or one-to-one is not of great consequence. They all express the power that technology has given us to differentiate our customers and shape our messages more intelligently to sets or segments of customers and prospects.
Whatever the label, customer-centered marketing is here big time, and it’s not the sole province of direct marketers. In one sense, everything about building relationships is direct. The art and science are direct, but in the end all roads lead to brand. The customer’s image, the customer’s memory, is of brand.
In these columns I’m going to throw the spotlight on some case studies in relationship marketing and management. Most will represent outstanding examples of building customer loyalty and lifetime value. Sometimes they will simply reflect lessons learned.
There are a few articles of faith that will show through in my reports. One is that in a quantum marketing world, there is no precise way to measure the impact of any single component of the marketing mix-advertising, promotion, direct marketing, public relations, whatever.
Also, while much of what we do in building relationships is enabled by technology-and we are only at the very beginning of those possibilities-technology is not destiny. It shapes our tools and the art of the possible, but in the best success stories there is also a high-touch dimension that adds critical value.
That’s why I’ve chosen in this first column to talk about custom publishing: magazines, newsletters, special reports, e-mail, Web content. It’s a direct-to-customer area that has shown explosive growth in England. In the United States we don’t know at this point whether it’s a $1 billion or a $3 billion market. The Magazine Publishers of America’s Custom Publishing Council is going to attempt to measure it, but I’ll say this-if the market is $1 billion now, it’ll be $3 billion in just a few years.
Why? Because brands have discovered that print products-magazines, newsletters, special reports-have a gift for building bonds. That’s what special interest and business magazines have always done with their readers: They connect to customers in human terms. Sponsored publications are seen as reinforcing owner brands without clutter and competitive messages. Success requires a commitment to quality that parallels what publishers must deliver in both paid- and controlled-circulation periodicals. The critical difference is that with custom, the chalk is in the hands of the brand.
Some custom communications are supported by advertising. Some are intended as profit centers. Some use one-to-one techniques, and some are designed for anyone booking an airline or a hotel room. Selectively, they are distributed in stores and sold at newsstands. Most use the owner brand’s database to define recipients. Others will use the custom publisher’s database to identify the people they want to reach with their messages.
Very few custom publishing initiatives are interactive. They may have Web counterparts that invite dialogue. A number do excellent surveys which guide their editorial content. For the most part, they deliver information and entertainment.
The travel industry is one of my favorite places to roam in search of owner communications. Everything about travel evokes emotion in the traveler. We invest a lot of our psychic energy and real money in seeking comfort or pleasure en route.
The airline and hospitality sectors are highly segmented. Here you find plain vanilla, gold, platinum. There is economy, business and first. There is standard, deluxe and super deluxe. Every part of the business is loaded with magazines, newsletters, videos, Internet content and stuffers designed for customers.
For now, though, I want to take a glance at in-flight magazines and frequent flyer programs. Actually, it’s much more fun to talk about frequent flyer programs than in-flights.
Frequent flyer programs are unbelievable underachievers in building relationships. They are the favorite whipping boys of writers, speakers and just plain frequent flyers, and that’s exactly what they deserve.
But let’s stop for a moment at the in-flights, where one size fits all customers. In-flights are always counted as custom magazines, although the top six generated more than $170 million in advertising revenue last year.
Most airlines enter into contracts or partnerships with custom publishers that produce the magazines. The airline receives a hefty distribution fee for placing and keeping the magazines in seat pockets. They reserve a certain number of pages for passenger information and self-promotion. In-flights are big business, and many are fine editorial products. In several ways, in-flights build relationships. For one, they give you something to read and provide a convenient, inexpensive way to give passengers information.
However, the in-flight magazine is a push medium, not pull. There’s no customer feedback, nothing that would help the airline determine what kind of future prospect I am. In-flight publishers survey customers and do some focus groups for editorial and advertising purposes, but it is certainly token. And neither publisher nor airline has any great interest in spending money to learn more about and respond better to the individual passenger.
Frequent flyer (or FF, for frequent failure) programs are a different story. I have been sold on the idea that I will be special. But if I fly 25,000 miles a year I’m really just another passenger. FFs have become a commodity, and have little to do with loyalty, retention and lifetime value.
Moreover, my admission to the FF Society has subjected me to a monthly assault by mail: a jungle of stuffers accompanying my mileage statement and a blatantly promotional newsletter that is thoroughly confusing and almost never relevant to my needs.
There is nothing about the FF mailings I receive that speaks “relationship.” Just imagine the investment in all those mailings and in that database. Perhaps people are redeeming the coupons and buying the stuff in those stuffers, and I’ve missed the point that it’s all about sales and not about relationships.
The good news is that we’re beginning to see some sensible use of the Web to service frequent flyer needs-but it’s a long way from the full potential of the medium.
Recently I stopped being lazy, turned to the Web to make sure my miles weren’t expiring, and started tossing my FF mailings in the wastebasket. Anyone else feel the same?
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