Customer Service

The survival of the fittest, from Darwin’s theory of evolution, is an apt analogy for the world of customer magazines.

Not content with simply providing added value to loyal customers, many customer magazines are now pushing their way towards brand builder status, as companies recognise their effectiveness and take an increasingly sophisticated approach to customer communication.

The contract publishing market continues to grow. Mintel reports that the industry’s 1998 turnover will be 319m, compared with 277m in 1997. And readership is also rising, with the Audit Bureau of Circulations figures for June 1998 showing two customer magazines, AA Magazine and Sky TV Guide, occupying the top two slots.

But how significant is contract publishing’s contribution to the overall marketing mix? Craig Waller, managing director of Premier Magazines, believes publishing has consolidated a strong position in the past few years. “It is now a proven and cost-effective way to keep your customers loyal, sell them more and promote your brand values. It has taken its place within the other marketing disciplines.”

Waller says a good magazine will build the brand and customer loyalty. “I don’t see how a customer magazine can have separate brand values from those of the company which publishes it.”

According to Waller, the objectives of the magazine govern its role, whether it’s a brand builder or a loyalty tool. Many aren’t in the business of attracting new customers, as they are specifically loyalty tools.

However, boosting the brand is integral to any publication, he says. “I would be horrified to be told that one of our magazines didn’t enhance or reflect the brand values of the organisation we publish for. If that were the case, we wouldn’t be doing our job properly.”

At TPD Publishing, two out of the agency’s 22 clients are specifically using their publications as brand builders.

Grahame Lake, joint managing director of TPD, says both Mon dex and Ico are bringing new products into the market, which, Lake claims, are far too complex concepts for above-the-line campaigns. “How do you get that over in a series of advertisements? In fact, Mondex doesn’t advertise,” he says.

These companies are using their publications to create or develop a global brand, explain the technology behind their products, educate businesses, manufacturers and governments. Ico, a global telecomm-unications company, is also using its magazine to prepare the market for a consumer launch in 2000.

However, Lake believes it is going too far to say that magazines actually build brands rather than supporting them, despite the above examples.

“I think we are two or three years away from that. There’s still quite a lot to do in terms of customer communication,” he explains.

Lake says the flexibility of magazines and their Web-based counterparts means they are excellent brand supporters, however.

“They explain it, develop it, and push it across in all its glory.”

According to Lake, the increasing number of media options becoming available, such as digital TV, will make it easier for magazines to be an even greater force in the future. “Fragmentation plays into the magazines’ hands, they will be able to build solid brands in a fragmenting market,” says Lake.

Matt Prior, new business director at Redwood Publishing, agrees that loyalty and customer retention are still huge elements of publishing and will be for at least the next few years.

“But ultimately they play a major part in terms of brand perception. People have their opinions about the brand anyway, and we try to reinforce those positive aspects,” he adds.

Prior says the most important contribution magazines make is to give brands a voice. “They put the brand identity in print. Everything we do is focused on the brand needs.”

A high profile brand with a large circulation magazine has the bonus of attracting advertising. “With the likes of Marks & Spencer and Safeway, for example, there is a strong brand association which newsstand titles often can’t offer,” adds Prior.

Mintel reports that customer magazines’ advertising revenue is estimated to be worth 74m this year.

Part of magazines’ attraction is that they can be turned to a number of purposes. Waller says BA’s revamp of its in-flight publications was the first time a company has used its magazines to herald a change of image and brand values.

BA undertook qualitative research after the relaunches, and found that as well as supporting the brand, the magazines were helping to change perceptions.

Richard Cheeseman, editor of Ico’s publication, says a magazine was felt to be the most useful medium to raise awareness of the three-year-old global telecommunications company, because it’s an accessible format. “It is designed to give information and opinion, so we felt a magazine was a bit more effective than brochures or press releases.”

Cheeseman describes the publication as an awareness-raising exercise. Ico has a low profile and the magazine’s purpose is to inform the telecoms industry of the company’s existence and the preparations for its consumer launch in 2000.

A customer survey conducted by the company earlier this year revealed 90 per cent of customers value the news given in the magazine, which reports Ico’s progress, including new satellite access nodes built and agreements signed with prospective service distribution partners.

Cheeseman hopes the magazine will continue after the launch of the service, even though its focus may have to move towards communicating with existing customers.

Dulux says its glossy newsstand publication, Colour, published bi-annually through Redwood, is also about building brand equity. Rainer Schubert, senior product manager at Dulux, says Colour aims to retain brand loyalty, reinforce the brand’s values and also bring in new customers.

“In our business, it’s vital that we’re at the forefront of fashion and it’s important to maintain your brand to reassure customers that you really are up with the play.”

With a cover price of 2.99, Colour is among the priciest home interest magazines on the market, but with high production values and no advertising, it is also expensive to produce. However, as it targets fashion-conscious consumers who are generally prepared to pay for decorating inspiration, the decision was made to sell it on newsstands rather than give it away in-store, explains Schubert.

“Our customers look for inspiration from different sources and one of the best sources is magazines. We’re trying to position ourselves as an authority in decorating.”

Schubert says although it’s costly, the magazine includes paint vouchers worth 20, which means Dulux persuades new customers to try out its product at the same time.

It can be argued that competing against lifestyle titles on newsstands could result in a watering down of the brand’s values. But Schubert claims that, because Colour is totally controlled by Dulux, it reinforces the whole brand. “I’ve found the Dulux consumer really has an emotional bond with the brand. As such, through the magazine, we’re able to feed information to the consumer, reinforcing all the brand equity that we’ve built up over the years.”

But is there any proof that this strategy works? Schubert quotes internal research which shows Colour readers spend twice as much on Dulux products as the readers of other magazines. “So there is a direct payback for us.”

But despite their proven versatility, there are major brands which still see magazines as inappropriate tools for communicating their values. Louise Terry, head of communications at Coca-Cola Great Britain, believes producing a magazine for its consumers would water down its strong brand message. In the UK, this global giant is starting to think small instead, through sponsorship of local football associations.

Terry explains: “We think it’s important to try talking to people directly, so grassroots football will help us to do that. Producing a magazine goes one stage further and I’m not sure it’s really the role of a brand like Coke. We sell fizzy drinks, we’re not a publisher.”

However, Terry doesn’t underestimate the value of customer magazines, seeing them as ideally suited to retail marketing. “They’re probably not so effective for a brand such as Coke. Coke has a very direct message and this would probably be slightly diluted by a magazine.”

However, internationally, Coca-Cola uses magazines as an important internal communication medium for its staff. Terry doesn’t rule out the possibility of producing a Coke-branded magazine if the right formula can be found. “We might, I would never say never. We’re always looking for ways to connect with consumers and talk to them in a relevant way. We may decide in the future that’s something to do.”

Cadbury also sees no room for a consumer publication within its marketing repertoire, due to the impulse nature of confectionery purchasing.

Cadbury spokesman Tony Bilsborough says, as chocolate is inexpensive and normally not a planned purchase, elements such as point of sale or packaging play a much greater role in the decision making process.

While it is clear that all companies are yet to be convinced of their benefit, Premier’s Waller believes customer magazines will become increasingly integrated into the marketing mix.