Recommended
More Related Content
Similar to Loyalty and the future of online publishing
Similar to Loyalty and the future of online publishing (20)
Recently uploaded
Recently uploaded (20)
Loyalty and the future of online publishing
- 1. LOYALTY AND THE FUTURE OF ONLINE PUBLISHING Nina Gilbert, Account Director
- 2. ABOUT CLOCK
- 3. OURWORK
- 10. LOYALTY INITIATIVES – A PART OF EVERYDAY LIFE
- 12. CREATINGVALUE FORTHE CONSUMER Value Loyalty Growth Profit More Value
- 13. RETENTION LEVERS
- 14. RETENTION LEVERS 1. Perceived Value
- 15. RETENTION LEVERS 1. Perceived Value 2. Affinity
- 16. RETENTION LEVERS 1. Perceived Value 2. Affinity 3. Barriers to Exit
- 18. YOURMOST VALUABLEASSET Of those consumers who said that they had a strong brand relationship, 64% cited shared values as the primary reason
- 19. Aaron Lotton, CEB at Iconoculture We saw that emotional attachments to brands certainly do exist, but that connection typically starts with a ‘shared value’ that consumers believe they hold in common with the brand.
- 22. White House Office of Consumer Affairs On average, loyal customers are worth up to 10 times as much as their first purchase.
- 23. WHY A LOYALTY STRATEGY MIGHT BE CRITICAL TO FUTURE PUBLISHING SUCCESS
- 26. 83% of adults are online 62% of all adults use a smartphone 59% use YouTube for information 48% of mobile users have downloaded apps 38% use mobile instant messaging 54% of online adults watch TV via the web 66% of online adults have a current social network profile Ofcom 2014 - Adults’ Media Use and Attitudes Report
- 28. IMPACTOFA5–PERCENTAGE–POINTINCREASEIN RENTENTIONRATEONCUSTOMERNETPRESENTVALUE The Loyalty Effect” by Frederick F Reichheld
- 29. FREEVS PAIDMODEL
- 34. TIMES+ STATS
- 35. 100k to more than 325k subscribers TIMES+ STATS
- 36. 100k to more than 325k subscribers 65% of eligible subscribers are engaged and active in Times+ TIMES+ STATS
- 37. 100k to more than 325k subscribers 65% of eligible subscribers are engaged and active in Times+ The churn rate is as low as 8% TIMES+ STATS
- 38. 100k to more than 325k subscribers 65% of eligible subscribers are engaged and active in Times+ The churn rate is as low as 8% Times+ users are twice as likely to recommend The Times and The Sunday Times TIMES+ STATS
- 39. 100k to more than 325k subscribers 65% of eligible subscribers are engaged and active in Times+ The churn rate is as low as 8% Times+ users are twice as likely to recommend The Times and The Sunday Times Click-through rate on the Times+ newsletter is double the News UK average TIMES+ STATS
- 50. OPTIMISING PUBLISHING LOYALTY PROGRAMMES Data Creating a community User Experience Design & content
- 53. USER EXPERIENCE
- 55. SUMMARY
- 56. SUMMARY Loyalty programmes are becoming a primary element of publisher business models
- 57. SUMMARY Loyalty programmes are becoming a primary element of publisher business models Data optimisation and real-time conversations will unlock deeper and longer lasting relationships
- 58. SUMMARY Loyalty programmes are becoming a primary element of publisher business models Data optimisation and real-time conversations will unlock deeper and longer lasting relationships Content and loyalty must be a seamless, easy, valuable daily experience
- 59. SUMMARY Loyalty programmes are becoming a primary element of publisher business models Data optimisation and real-time conversations will unlock deeper and longer lasting relationships Content and loyalty must be a seamless, easy, valuable daily experience Publishers should begin to think of readers as engaged members and not just subscribers
- 60. THANK YOU @Clock To learn more about what we are doing in this area, visit us at our stand in the Networking Zone.
Editor's Notes
- Today I’m here to talk about Loyalty and the future of online publishing, and how brands can use loyalty strategies to attract and sustain audience communities. I’ll be sharing some insights we have learnt from building loyalty platforms for some of our clients.
- Having been nurtured from a Prince’s Trust start-up in 1997, Clock now has a valuable 16 years’ experience in designing and building digital platforms, and we’re now one of the top 100 digital agencies in the UK. Clock’s expertise is centred in digital publishing and building loyalty platforms - encompassing user experience, creative builds and sophisticated technical solutions.
- We recently created the UK’s first digital-only fashion glossy, Never UnderDressed for ShortList Media - with the production values of a traditional glossy magazine, but with the immediacy provided by digital
- We also recently launched a European website for global information and measurement specialists, Nielsen, to enhance their digital presence in the European market. Our brief was to build a state-of-the-art, responsive website that would provide a highly optimised user experience for consumers across Europe, and therefore across a variety of different languages.
- In the last year we were involved in developing major publisher loyalty schemes for News UK: Sun Perks which was created to support the new Sun online paywall,
- with Times+ (Original in 2008, re-design earlier this year),
- and also for Hearst Magazines, with the high-end premium rewards club for subscribers to Esquire magazine
- So now let’s dig down into the deeper meaning of Loyalty ... According to research, in a typical company today, customers are defecting at the rate of 10 - 30 % every year,. Loyalty is dead - or so the experts proclaim. But are the experts really right? Has the time come to lose faith, and enter a world of increasingly fickle customers? Can companies succeed by embracing opportunism as a way of life? The answer is, of course no... Not if they really care about long-term growth and profits.
- Loyalty initiatives are mainstream, Part of our daily lives, Incorporated in brand values . As you can see from this slide - these are some of the big household names in loyalty and often seen as brands in their own right. Nowadays, we expect the brands that we buy from, to give something back - To recognise us as individuals and to be in tune with us and our purchasing needs For the likes of these companies, doing business with people you trust and understand is predictable and efficient, which in turn makes them more profitable, than doing business with uninvested strangers.
- Yet, if companies are wise enough to see the power of loyalty, why are defection rates still so high in today’s market? How do they manage to lose half their customers every five years? The answer is because most of them don’t measure defections and they have no idea they are losing customers at such a rate. So customer loyalty is crucially important - it has an integral effect on every aspect of a business system and it’s success Retention is the central gauge that integrates all the dimensions of a business, and measures how well the company is creating value for its customers. Consistently high retention of customers can create huge competitive advantage, producing unexpected bonuses in productivity and growth, and of course reducing the rate of customer churn. On the flip-side, persistent defection means that former customers - people convinced the company offers inferior value - will eventually outnumber the company’s loyal advocates and dominate the collective voice of the marketplace…. And when that moment arrives, no amount of advertising, PR, or clever marketing will prop up pricing, new customer acquisitions, or the company’s reputation.
- The key therefore is to manage an effective cycle of loyalty, learning and value creation. Since the only way a business can retain customer loyalty is by delivering superior value, high loyalty is a sure sign of solid value creation. Creating value for customers is the foundation of every successful business system, and value in effect builds loyalty, and loyalty in turn builds growth, profit, and more value. So the best way to differentiate between good profits and bad is by measuring the loyalty of your most valuable assets, i.e. your customers.
- There are 3 important retention levers to be applied when considering a loyalty platform:
- 1. PERCEIVED VALUE - The level of monetary value a customer perceives a product or service to be worth.
- 2. AFFINITY - The emotional attachment customers feel with a company as driven by their product, service experience and broader brand relationship.
- 3. BARRIERS TO EXIT - The Dynamics that prevent customers from easily leaving a company and using a competitor to meet their needs.
- So we can see in business, loyalty is about managing the interplay between cooperation and competition. It’s about loyalty to a set of principles that will enable a business to serve its customers well over time, it is a rational, viable strategy for generating cash-flow, profits and growth, BUT on top of all this we must remember that loyalty is about people. It is about motivation and behaviour, not just marketing, finance or product development - It is about humanistic values and principles This theory can be reinforced by a study from the Corporate Executive Board (CEB) and published by the Harvard Business Review. The study included 7,000 consumers across the United States, United Kingdom and Australia, and showed that loyalty to brands is almost impossible to achieve without one key element:
- Of those consumers who said that they had a strong brand relationship, 64% cited shared values as the primary reason so, shared values are by far the largest driver of brand loyalty. According to the CEB, who researched the topic for more than a year, consumers everywhere stated that they were loyal “not to companies, but to beliefs.”
- As Aaron Lotton of the CEB states: “We saw that emotional attachments to brands certainly do exist, but that connection typically starts with a ‘shared value’ that consumers believe they hold in common with the brand”
- Loyalty is therefore not a substitute for profit, nor a quick gimmick for making easy money - it is a vital component used to achieve extraordinary levels of growth and profitability. Companies who have succeeded to reduce the churn rate of customers have worked hard to understand the economics that underpins loyalty-based management, and built that understanding into its decision making processes. By refining their ability to learn from failure (i.e. defecting customers), they have achieved continuous improvement in the creation of loyalty & value. However, the solution for each company is different - it’s not a one size fits all. Leaders in loyalty-based management have all taken different paths and built different solutions to suit their individual needs. But what a company should do is customise some general lessons to fit their specific business and their strategy, competitive situation and aspirations. However, it must be done economically. After all, it costs money to create loyalty and some necessary investments for long-term growth.
- Humans are complex beings, their buying behaviour can be hard to pin down and with the concept of loyalty being so tied to emotion, how do we understand its complexities to better understand our businesses? We must start by asking the right questions to understand the laws of economics and human behaviour, such as “Exactly how much value does loyalty create?” “How do you quantify the link between loyalty and profit?” “What’s the actual cash advantage of holding on to a good customer for one additional year, or five years, or ten?” In some industries new customers contribute to profits immediately, but it generally still takes several newcomers to compensate for the loss of one veteran. In fact studies have shown that it can cost 6 to 7 times more to acquire a new customer than keep an old one. Therefore, outpacing your competition depends upon having a loyal tribe of happy customers
- All companies look for customers who are going to make their business more profitable but few actually realise that some customers are inherently more loyal, and therefore valuable, than others. According to the White House Office of Consumer Affairs: On average, loyal customers are worth up to 10 times as much as their first purchase.
- Now I am going to delve a little more into the publishing arena, and look at why loyalty platforms have helped a number of publishers to further integrate with their customers and what they really mean to the target audience..
- Going back about twenty years ago - the media landscape looked a bit like this There simply wasn’t that much competition in the media world for audiences to choose from. The limited choice in newspapers and magazines naturally bred audience loyalty and habit
- Now of course it’s more like this An incredible explosion in media brands, delivery platforms and competing information sources, channels through which to consume information, communicate and even socialise This has had a clear impact on media brand relationships with their audience, and where they have seen a decline in customer loyalty
- These numbers tell the story: The vast majority of us are now able to access media at the touch of a button almost anywhere, at any time of the day - We have a myriad of different ways to connect, with the average household now owning four digital devices.. What is for sure is that we’re moving away from old-media touch points, while consuming media at higher and higher rates. We’ve never been more reachable, around the clock and we’re becoming rapidly more mobile in how we consume our media
- The exponential growth in choice and ability to access content, through the technology explosion of the last decade, has put the consumer firmly in the driving seat The consequence is a fundamental shift in power from brand to audience The proliferation of increasingly sophisticated mobile devices and more time-poor consumers, has created the need for more immediate access to real-time content Given the “always on” nature of the web: product information, reviews, and access to competitors are all just a click away from a customer’s fingertips, so it’s more vital than ever for publishers to hang on to their valuable audience Thereby integrating a loyalty rewards programme into the customer experience can be a powerful counterforce to the challenges publishers are facing today. Publishers’ are actually very well placed to blend value and experience, to create or enhance audience loyalty and build a sustainable long-term community around their brands and through their various channels.
- This graph, taken from the book “The Loyalty Effect” by Frederick F Reichheld, shows the impact just a 5% increase in retention rates could have on customer net value, meaning the total lifetime profit from a typical publishing customer could rise on average by 85%.
- We should mention that from a publisher’s point of view the approach to achieve audience loyalty depends very much on whether online content is Free or Paid I’m going to focus on the potential to build loyalty within a paid subscription model But it’s worth taking a quick look at the different challenges that free and paid scenarios can create for publishers
- Some Publishers, that continue to focus on largely free online content, face this kind of cycle on a daily basis The key strength is the audience scale, by making free content accessible to all also the ability to leverage social media to increase audience reach by sharing free online content But, at the end of the day the consumer has no commitment to come back to this particular publisher, and may make the choice to move off to a competitor based on other content that is also immediately available
- With the paid subscription model – the initial challenge of course is to win the commitment to subscribe But once secured, the opportunity is there to impress and reward the customer and by generating an exceptional customer experience, not only through great journalism, but also through carefully tailored offers to suit the audience needs, we can start to really understand the value offered by publishing loyalty programmes.
- To give some examples of successful loyalty platforms in publishing, we’ll next a look in more detail at some case studies.
- Clock have been working with News UK for the last 6 years and have been an integral part of the development of their subscriber loyalty programme, since their inception So what have we learned from working with News UK on the Times + and Sun Perks loyalty programmes?
- Firstly lets take a quick look at some key stats for Times+ The platform was first launched in 2008 to reward subscriber loyalty and the figures show just how valuable an asset it has been for The Times and The Sunday Times,
- growing from 100k to more than 325k subscribers
- Up to 65% of eligible subscribers are engaged and active in Times+, this means they have entered a comp, been to a Times+ event or taken up an offer
- For those active Times+ users, the churn rate is as low as 8%, compared with 43% for subscribers not engaged with Times+
- Times+ users are twice as likely to recommend The Times and The Sunday Times
- And the Click-through rate on the Times+ newsletter is double the News UK average
- Looking at the Times+ model in more detail – the program essentially has three layers of value to offer to members, which reflect it’s strapline: Events, Offers, Extras
- Events – with guests including Actors, authors, politicians and Times journalists – they are tailored to interest groups within culture, food, politics and business and are the driving force of the success of Times+
- Offers (promotional offers and competitions) – across an array of interest areas, including Culture, Food, Travel and sport
- Extras (showcasing special standalone curated campaigns specifically for The Times) The incentives that have really added value, were those that leveraged the brand’s key assets: -Trusted journalism - Exclusive access to money can’t buy events - Quality, thought-provoking content
- Some of the most popular Times+ events have been: A Q&A session Danny Boyle and Sheryl Sandberg - COO of Facebook Ultimately, the combination of carefully selected offers; tailored promotions and exclusive experiences are designed to make the loyalty platform a habitual and indispensable part of users’ daily lives
- The second loyalty platform we have developed for News UK is the Sun Perks site which was launched in August last year. Within the first 6 months, site visits surpassed 1.5 million The site has also been effective in helping The Sun in its acquisition efforts - with 50% of all traffic coming from new users The fully responsive design means that now nearly half of all visitors are accessing the site via a tablet or mobile Full social media integration is paying dividends tool, with referrals from social media also on the rise
- However, the Sun Perks loyalty proposition differs significantly from Times+ This is mainly due to the differing demographic. It is therefore critical to know your audience and understand what value means to them. With Sun Perks we know that primary drivers are value-based offerings and exclusive film screenings are the most popular The entire Perks proposition is a gateway to monthly savings and deals, specially tailored to the audience, adhering to their core values and interests across sport, family, entertainment and home life
- So, now I’m just going to touch on some key areas to optimise the performance of loyalty programmes in publishing, including:
- Data
- Creating a community
- User experience
- Design & content
- So firstly, let’s look at data : One of the primary reasons for creating a loyalty programme should be capturing data with a view to optimising the relationship the brand has with its users. Even in today’s market, the majority of customers are generally anonymous - we know very little about them and have minimal opportunities to target content or advertising at them, but through a well planned loyalty programme this can all change for publishers. The data capture process is the start of an on-going process which can map the behaviour, tastes and interests of consumers These insights can help publishers to optimise value to maximise the impact on the audience And for multi-brand media owners this data collection process can also integrate behavioural tracking for an individual across multiple brands and thereby facilitate cross-selling
- As we have seen, the majority of your customers don’t care about having a close relationship with your brand, but instead care more deeply about the things you stand for They want to see that you share their beliefs and that you incorporate those beliefs into how you conduct business. Therefore introducing a feeling of community within a loyalty programme is also very important, allowing those subscribers to feel like integral members who have a voice The interaction between subscribers and the brand must be easy – the brand, and the people in it must be accessible
- Usability is also key: Loyalty elements within the media experience must become an integral part of the consumer’s experience of the brand Access must be enjoyable and in keeping with the brand experience And as we have already seen, content must be relevant and targeted to the audience demographic Interaction with promotions and offers should become a seamless part of their daily lives And finally, Multi-channel access is critical
- The design flow of publishing loyalty programmes is also vital to success It must be a believable extension of the brand – must connect and integrate naturally but it should have a distinct brand identity of its own – a re-interpretation of the core brand The language and tone of voice must reflect editorial values and finally, The editorial team should (when appropriate) buy into and participate with the loyalty brand
- Loyalty programmes are becoming a primary element of publishing business models
- Data optimisation and real-time conversations will unlock deeper and longer lasting relationships
- content and loyalty must be a seamless, easy, valuable daily experience
- Publishers should begin to think of readers as engaged members and not just subscribers
- Loyalty is certainly not dead