SBHD: Playing a major role in loyalty schemes and looking like coffee table glossies, customer magazines no longer extoll the virtues of goods no-one wants, but give consumers information relevant to their lifestyle.
Publishers of customer magazines or loyalty magazines or courtesy magazines – call them what you will – are confident that they represent the most dynamic sector of UK publishing.
Certainly the past year has seen a veritable explosion of new titles coming through consumers’ letterboxes, or landing on business executives’ desks. Perhaps the most important recruit to the loyalty magazine ranks has been Heinz, which began mailing its Heinz At Home magazine to consumers last autumn. Other notable newcomers have been Harvey Nichols and Boots.
Customer magazines appear to have entered a new age, now that big fmcg companies and major retailers are beginning to use them as part of their loyalty programmes. Even without such new users, however, it is likely that the industry would have undergone major changes, as many of the traditional users have relaunched their existing titles. Barclaycard, for example, abandoned its quarterly bill-stuffer in November 1993, and is currently testing three “new look” magazines.
But if you ask the publishers responsible for putting the magazines together on behalf of the clients, they will naturally tell you that the industry is burgeoning: it is, after all, in their interests to talk the area up. We talked to some of the clients to let them have their say.
The three case studies focus on three different types of customer magazine. The Sky TV Guide now claims to be the UK’s biggest circulation monthly magazine; Barclaycard’s Out of the Blue is one of three magazines the credit card company is testing; and Cable and Wireless’ Communicating Business is an internationally distributed “coffee table” title aimed at a very small, select audience, who make purchasing decisions in communications.
SBHD: Sky TV Guide
“Three years ago, in July 1992, our churn rate (the number of customers who did not resubscribe to Sky) was 25 per cent: now, it is 12.5 per cent. Our subscriber magazine definitely helped bring the figure down. It’s certainly worth the money,” says Chris Townsend, director of customer marketing at BSkyB. He is at pains to distance the Sky TV Guide from other loyalty magazines. “The guide is not delivered free: it is part of the subscription,” he stresses.
Nevertheless, most in the industry regard the Sky TV Guide as one of the most successful loyalty magazines around. With a circulation of 2.9 million, it also achieves substantial advertising revenues, generating Ãº5m in the past 10 months. “Without the advertising, we couldn’t afford to run the magazine,” says Towns-end. Even so, it is still an expensive operation, he admits, with postage a major cost. “It is only really expensive if it doesn’t work – if it doesn’t help reduce customer attrition and if it doesn’t help deliver effective sales and customer benefits,” he says.
Sky had a publication before the guide, called Sky Plus – a quarterly 60-page magazine which only focused on the channels’ highlights. “We found that though consumers liked it, they wanted full listings and the information more frequently,” says Townsend.
The magazine is interactive, he claims. Certainly its pages are full of competitions related to programmes on Sky channels, and to special reader offers. These include the Sky Travel Service and the link-up between Sky and BT which offers Sky subscribers discounts on their telephone bills.
“When we are producing the magazine we look at every page to make sure that it is there for the benefit of the customer,” claims Townsend. “A lot of loyalty magazines don’t do that. Our information is directly relevant to our customers.”
Sky obviously considers that it could be more relevant still as it is completely redesigning the magazine, and changing the look of the listings pages. A US-style grid system is being introduced so that more information can be fitted on a page, and consumers can see at a glance what is on at a particular time. BSkyB is also looking at the possibility of including terrestrial TV listings.
Finally, on April 1, the magazine will have full audited NRS figures for the benefit of media buyers, a lot of whom, as Townsend admits, “won’t invest in customer loyalty magazines because no reliable figures are available for them.”
As far as Barclaycard is concerned, customer magazines have an important part to play. Pentelow says: “They do a very good job for us. If they didn’t work, we wouldn’t carry on with them. They give us a platform to talk to customers at some length about the benefits of the card. They give us the space to talk about our different services – without thrusting them down people’s throats. They’re about adding value to the brand.”