SBHD: Customer service no longer ends at the supermarket checkout – increasingly retailers are turning to customer magazines as a way of raising brand profile, boosting sales and drawing shoppers into the customer loyalty fold. By David Reed
When Heinz unveiled the first mailings in its new Ãº12m below-the-line campaign, it came as a shock to many that they were sending out magazines. Even those who had expected something along these lines, were surprised the company had turned to WWAV Rapp Collins to create a publication, rather than one of the publishing agents which specialise in this area.
Not that the food giant’s decision was without precedent. Two other major fmcg brands are rumoured to be considering customer magazines, and Buitoni has already produced five issues of its newsletter for members of the Casa Buitoni Club.
Retailers are beginning to recognise they have similar marketing needs to manufacturers. According to a spokesperson for Sainsbury’s: “Our magazine does fill a communications need – its success is testament to that.” Marks and Spencer is also said, by one contract publisher, to think of its magazine as its principal means of communication with its customers.
Specialist Publications managing director Jim Addison says: “Retailers produce an awful lot of publications. It is critical to them because multiples stock such a range, you have to tell customers what’s on offer, and give them in-formation on what to do with food. Education about preparation is often down to retailers.”
Whether for companies with narrow product ranges that have complex applications, like computer or software manufacturers, or for retailers with a broad product base, there is a commonly-held view that communicating those messages clearly and effectively may be better done through a magazine. “There is a realisation that a magazine-style communication can do things that other kinds of communications can’t,” says Peter Connor, managing director at Forward Publishing.
“If you are trying to improve a company’s image and win long-term loyalty to cross-sell products and services, customers are happy to get that information because they are often quite badly-informed about what they can get from a retailer, or financial services institution, or membership organisation. They welcome a statement of what’s available,” adds Connor.
Forward has carried out pilot research on the magazine it publishes to support IBM’s Helpware suite of software. Accord-ing to Connor, the magazine has increased its readers’ tendency to repurchase equipment and changed the perception of IBM.
Mike Potter, managing director of Redwood Publishing, agrees magazines represent a tangible benefit to both manufacturers and customers. “At any one time, a company may have 100 messages to get across,” he says. “If you send them in a mailshot, customers may pick up one or two, but in a magazine, you can accommodate a wide range of stories and angles.”
There is every indication that clients are recognising the broader communication potential of magazines and are turning to them. Mintel estimates spend on customer magazines at Ãº88m – slightly more than one per cent of all ad spend – and predicts it will rise to Ãº130m in the next few years.
Helping to fuel this increase will be any impact these magazines have on creating or sustaining customer loyalty. This effect will need to be measured in some way, and it is this issue which is hotly debated. Is a magazine most effective as an awareness-building vehicle, which is then traded on through other marketing disciplines, such as direct mail, or can it incorporate response devices without losing identity as an editorial product?
Historically, customer magazines have worked principally in the area of customer service, informing their readers about a product they have already purchased with no further sales effort. This was the case with in-flight magazines, which laid the foundations for the contract publishing industry.
David McDonald, in-flight media development manager at British Airways, points out that its four titles are still managed as part of its in-flight entertainment division. While every issue of High Life carries one story on British Airways, “it is not perceived just as a mouthpiece”, he says. Neither is it used for loyalty building. “As a company, we do not use it as a response medium,” says McDonald.
Sainsbury’s has also resisted building direct marketing into its title. Indeed, Sainsbury’s is very insistent about the editorial independence of its magazine. According to a spokesperson for Sainsbury’s: “It does feature our foods, but other foods, too. It en- hances the image of the Sainsbury’s brand. But they do what they want.”
Magazines can have a significant impact on brand image and perceptions, but there are difficulties in demonstrating their effect. “The methods of research are only just developing,” admits Connor. However, other clients are more exacting and demand a clear return on their investment.
Caroline Gore, direct marketing manager at Saab UK, says The Saab Magazine (produced by Summerhouse Publishing) has “been very effective – through our database, we can track customers and prospects who have responded. “Each issue of the twice-yearly magazine comes with an invitation to a test drive. Gore says: “We can definitely say the magazine has sold cars.”
Getting figures for the success of any magazine in stimulating sales or loyalty is almost impossible. But Specialist Publications quotes the example of one title it produces for the direct marketing department of a financial institution. It is funded entirely by the new business written on the back of response – for the past three years, this has supported three issues a year and the last edition pulled in Ãº4m.
“With a magazine, you do get a memory-jogging effect and it helps to build loyalty, but not by itself. It has got to be part of a programme that includes a good magazine,” says Addison. He notes that it is possible to combine brand awareness and lead generation within the same magazine. For the marketer, it is important to put in place the right measures, which will track the impact on each, and to set objectives which are genuinely achievable. This means, for example, applying media codes to any response device in a contract-published magazine, just as they would be in direct-response advertising.
“You have to do that,” adds Addison. “It is vital to measure response but impossible to judge how successful it is and how to work with the client to make sure you get it right next time,” he says. “If you don’t, when it comes to budget cuts, you’d be first to go.”
But, while for some marketers a magazine is perfect for their image and for others it is crucial to their loyalty drive, there are a growing number who recognise that the real benefits of a customer magazine come from using it within the entire communications platform to support both goals. Shane Duffy, brand manager at Dunlop Slazenger Golf Division, says: “Last year we spent money building a database that we could turn into a loyalty scheme. But we don’t just want to send offers, so a good way is to send a quarterly magazine.”
Having gathered the names of 40,000 committed golfers from response advertising, point-of-sale promotions and direct mail (including one mailing with an incentive of free golf balls that pulled a 59 per cent response), Duffy says: “We don’t want to let that fall back, we will develop it into a club for 1995”. Within the pages of a magazine, he says the company would be able to talk about the golfers it sponsors, golfing events and its full range of products, giving it greater synergy across its marketing activities. This moves the magazine away from being a piece of glossily-produced mail or vanity publishing and towards a position as a benefit of the brand.
Apple World is produced and managed by TPD Publishing for customers who join the computer company’sclub. With 5,000 members signed up in its first month, Julian Treasure, chairman of TPD, claims the magazine.Apple World is produced and managed by TPD Publishing for customers who join the computer company’sclub. With 5,000 members signed up in its first month, Julian Treasure, chairman of TPD, claims the magazine is proving to be an important element of the service, since it carries significant information that is not published in commercial magazines. This not only rewards customers for joining, it also takes the strain off Apple’s customer services centre.
However, he does not believe the budgets and skills being sought from publishing agents by clients are edging out other marketing services suppliers: “I wouldn’t say that contract publishers could replace direct marketing agencies. They have a whole range of skills we don’t have.” Also publishers do not mark up bought-in services to the degree agencies are accustomed to, working on a straight ten per cent net profit, according to Treasure. “When we pitch against agencies, it is frightening what their prices look like,” he says.
This may explain why so many clients have identified the customer magazine as the loyalty tool for the Nineties: first, it can be used to build and sustain the marketing database, because readers will return magazine questionnaires more willingly than mailed ones. Second, they can be produced more cost-effectively than direct mail, either through cheaper agency costs or through revenue from third-party advertisers (although this should not be over-estimated). Finally, there is the double hit a company gets with the magazine – long-term awareness building, because people keep magazines in the home, and short-term lead generation through response devices. No wonder, then, that there has been a scramble for ownership of this activity.
Tony Mason, editorial director of Summerhouse Publishing, says: “All clients are shifting. It used to be PR departments who ran the magazines, but in the past five years they have really been taken seriously and suddenly direct marketing departments have used them as a tool to promote their wares.” With the concentration of ownership of publishing agents in advertising groups – Omnicom owns Premier Magazines (which includes HHL and Specialist Publications) and AMV owns Redwood – the future for contract publishing looks to be bigger brands, bigger budgets and broader briefs.