I’ve been thinking a lot about loyalty recently - along, so it would
seem, with just about every marketing director (bar those who work for
media owners and building societies) in the country. We know the hymn:
‘Your best customer is your existing one. Keep them loyal, keep them
sweet,’ they sing.
What started me off was a friend who told me about some whizzo
remortgaging scheme. If he moved his existing mortgage to Building
Society X or Bank Y, they would give him a one-off cash payment of 6 per
cent of the value of his mortgage. In fact, every financial institution
is doing it including - shock horror - my own. I would be a fool,
therefore, not to do it, concluded my friend. But being the kind of fool
who believes there is no such thing as a free lunch (and believe me,
I’ve been in this job long enough to know), you have to wonder who’s
going to pay. The obvious answer is people who already have a mortgage
with that particular financial institution. So it’s strange that, in
this case, the loyal mortgage customer who doesn’t move his business
goes unrewarded, possibly penalised. This seems a bit unfair to me, not
to mention cock-eyed logic.
What’s this got to do with media? Well, the parallel is plain to see in
the current orgy of media cover-price cutting, whether it’s at the Times
or IPC with Woman and Woman’s Own (Campaign, last week). The big
question is this: faced with price-cutting tactics from their rivals,
what do media owners plan to do to keep their loyal readers happy?
Nothing, I suspect, judging by my own experience in previous price wars.
We take the Guardian at home (delivered by Ganesh, my friendly
newsagent’s son) but, during the price wars between the Times and the
Daily Telegraph, what did it do to keep me sweet? Zip, and what’s more I
pay 20p a day for Ganesh junior to deliver to my door.
To put it another way, somebody gets an extra dollop of my money for the
privilege of knowing that they have a guaranteed sale to me. In the real
world, these things work the other way round - in return for
guaranteeing to buy something long term, I get a major discount. Were I
a subscriber to IPC rival titles such as Bella or Best the same should
apply which, given that it’s a lot less hassle to change papers or
magazines than a mortgage, is a pretty head-in-the-sand attitude for
publishers to adopt. And in return, I and most other home-delivery
buyers would, I suspect, be quite happy to let them have additional
personal information for their databases.
What is the answer - apart from wising up fast? In the longer term,
media owners have to learn to make a clear distinction between sales and
marketing, and hand a bit more power to the marketing department. Too
much media-owner marketing is reactive short-term stuff, linked with
this promotion or that. Little wonder then that for all the millions
they pour into TV ads and promotions, consumers still tart themselves