| Experts Corner |  There has been a certain amount of scepticism surrounding CRM in the past, but now it seems like everyone is doing it. Is this the case?
Andy Wood, MD, GI Insight
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Customer Magazines – An Insight
Julia Hutchison, Director, APA
 Customer publishing was once perceived as the poor relation of the publishing industry — however this is no longer the case. Customer publishers are now producing innovative flagship titles that are seriously challenging consumer magazines for reputation, with high quality titles such as Waitrose Food Illustrated providing serious competition to many glossy, newsstand lifestyle titles.
Further testament to this is an influx of consumer editors moving to customer publishing for example, Scott Manson ex editor of Loaded joining Business Life and ex Men’s Health Simon Geller joining Sky. The idea that customer magazines are less creative, lower quality versions of their consumer counterparts is simply not true as reflected by the staggering growth rate experienced by the industry over the last ten years and their growing reputation as an effective customer relationship management tool.
New MINTEL research, commissioned by APA, investigating the customer publishing industry revealed that despite a slow down in the majority of media sectors, the customer publishing industry is still going from strength to strength, with turnover now topping £385 million.
This is an increase of over 10% on the figures published by the last MINTEL report in 2003 and a massive 244% increase over the last decade. Furthermore, the report indicates that customer magazines are set to become even more integrated into the marketing mix, with industry turnover expected to exceed £531 million by 2009.
The 10% growth rate has been attributed to a combination of two factors - increased spending by companies already utilising customer publishing, and an influx of new businesses trying it out for the first time. This is reinforced by the substantial increase in the number of new business pitches over the last two years.
So why, when many other marketing media are experiencing downturn, are customer magazines thriving? Simply because they deliver a wide range of customer relationship management objectives, which is what makes the medium so flexible for business looking to communicate with their customers.
In an increasingly fragmented market customer magazines have been proven to encourage loyalty, sell more to existing customers, drive retention, communicate brand positioning and enhance brand awareness to name just a few - all whilst entertaining the reader - which few other media can claim to do so comprehensibly or cost-effectively.
Existing customers were found to be the most important audience, highlighting the key role that customer magazines play in retaining, informing and increasing existing customer’s spend. Nearly half of customer magazines were also found to target prospective customers — which is the main growth area since the last Mintel report, reinforcing and guarding the future value of customer magazines as an acquisition tool.
Over two thirds of all customer titles currently target consumers, whilst a fifth are aimed at a business audience highlighting that the term ‘customer’ means different things to different organisations. For example the British Army Recruiting Group’s multiple award-winning title ARMY is designed for teenage boys and girls interested in the army. Its aim is to develop their enthusiasm so that when they reach 16 and older their interest matures into a career choice.
The research found the retail sector to be the most prolific customer publishing sector, accounting for over a fifth of the market at 56 titles. The sector has maintained growth since the last survey, increasing by 2% over the past two years. The financial services sector also remains an advocate of customer publishing, being the second heaviest investor in customer magazines. The travel, utilities, charity and automotive industries have also embraced customer magazines as a CRM tool.
The majority of customer magazines were found to be mailed through the post. Royal Mail can deliver to 99.9% of the population guaranteeing to brands that they can reach their customers, unlike in-store distribution which relies on consumer pick up. Since the last report there has also been a marked increase in personalisation. Nearly three-quarters (78%) of customer titles, which are mailed are personalised, 6% higher than in 2003, reflecting the current trend for more targeted, one-to-one marketing.
The research revealed store based distribution to be the second most popular method of distribution, accounting for a quarter of titles. Interestingly, however, in-store customer collection at 14% is only 3% more popular with consumers than purchasing in-store (11%), shattering the myth that consumers are not prepared to pay for customer titles. In fact, 20% of customer magazines now have a cover price and this trend is expected to grow as customer magazines increasingly resemble newsstand titles in terms of creativity and editorial.
Despite all the positive figures revealed by the research there is still some cynicism regarding the effectiveness of customer magazines from clients and media strategists and buyers alike. However, APA is confident that our forthcoming Effectiveness Measurement Programme (EMP), which is due to be launched in March will address these concerns.
The Milward Brown study will look to answer questions about the power and influence of customer magazines by exploring the degree to which those who receive customer magazines value them and read and spend time with them. It will also investigate the degree to which customer magazines enhance the reader’s affinity and loyalty to the brand through a series of measures designed to dimensionalise brand equity.
It is undeniable that customer publishing has come of age. The fact that eight of the top ten magazines by circulation are customer titles and that more than 500 UK companies, including many of the top 250 brands now produce such magazines, is testament to this. Furthermore, with the launch of EMP and the continuing growth trend means that customer titles will continue to be a fundamental CRM tool for a growing number of businesses.
| The Association of Publishing Agencies (APA) is the representative body for customer magazine publishers, under the umbrella of the Periodical Publishers Association (PPA). Formed in 1993, the APA now has thirty-one members, producing publications for over 350 leading companies in the UK and internationally.
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