What do you do when your subscribers are dying?

I have been thinking about a conversation I had recently.  I was talking to someone from a prestigious Boston cultural organization about her subscriber base and the catch 22 they are facing.  The subscriber base is aging so the organization needs to bring in new, younger subscribers.  However, younger subscribers do not like the repertoire favored by the existing subscriber base.  She described a challenge that companies face all the time.  How do you acquire new customers while retaining loyal customers?

In this difficult economic environment, it is hard not to focus on protecting and defending your most loyal customers. They represent the life blood of your company. However, they will not be there forever. You need to balance acquisition and retention efforts.

In the case of the cultural organization, I think she has at least three options:

  1. Focus on the loyal customers for now. Once the economic climate improves and budgets ease, begin courting high potential prospects. For example, a local opera company performed Carmen on the Boston Common and used the opportunity to collect lead information from attendees. In this case, they collected information on cards distributed before the performance and then sent a targeted follow up mailing about their upcoming season. 
  2. Create a new sub-brand. The organization could develop a sub-brand that would leverage their considerable name recognition and reputation. For example, Boston Modern Orchestra Project (BMOP) has concerts at the Jordan Hall in Boston as well as concerts some Tuesday nights at Club Café. They may play Elliot Carter at both types of venue but the club concerts are in a more intimate and less intimidating space. I imagine that they attract a different crowd as a result – probably younger and less well-versed in classical music. I haven’t yet made it to a club concert but the next one is February 3! By providing an alternate venue and experience, BMOP caters to their current subscribers and reaches out to new customers who will become future subscribers.
  3. Try to please to both segments. It can be hard to meet the needs of both new and loyal customers. James Levine caused a stir in Boston by including new and contemporary compositions with traditional stalwarts of the repertoire at the Boston Symphony Orchestra (BSO). However, the BSO did not give up. A new program provides $20 tickets for those under 40; it is another innovative way to bring a younger demographic to the symphony.

These are my thoughts. Is there anything you would suggest?

E-mail 1, Direct Mail 0

Direct mail marketers face several challenges. First and foremost, they get no respect. Almost everyone refers to direct mail as junk mail and many think it is bad for the environment. Second, their business has been negatively affected by the current economic conditions. The credit card companies who were responsible for mountains of solicitations have fallen on hard times and reduced their mail volume. Third, e-mail is replacing some direct mail as it is cheaper and offers the same measurability as direct mail. And now there is news of Postal Service carriers who did not deliver the mail entrusted to them.

According to a recent Associated Press article, one Postal Service carrier stored third class mail in his garage for six years. He was placed on probation and fined $3,000 but an e-mail marketing firm, MailChimp, paid the penalty. AP reported that Ben Chestnut of MailChimp said, “We’re doing everything we can to stop junk mail.”

We all need a good laugh

In the Wall Street Journal recently, Ann Patchett wrote “recommend the books you like, even to strangers.” So I am recommending “Then We Came to the End” by Joshua Ferris. Before you buy it, let me tell you that I enjoy gallows humor. This book is about an ad agency in Chicago in the midst of a business downturn.  Sound familiar? The book may resonate with its painful, incremental lay-offs and staff trying their best to keep busy and desperate to look good at their jobs.

I laughed out loud at the controversy over an office chair. When someone left the agency, his chair was appropriated. Eventually, the office manager tried to retrieve the chair but by then no one knew who actually had the original chair, given the many rounds of lay-offs. It was even funnier after I received an e-mail at work asking who had taken a former co-worker’s chair. This was followed by a second e-mail stating that the chair recently placed in her cube was a poor substitute and not the real chair. In this case, life imitates art.

Reading provides a portal into another person’s experience and enables us to “feel empathy for people we’ve never met”, as Ann Patchett so simply and elegantly stated. Empathy is needed in these difficult times as is a good laugh.

The United States of Integrated Marketing

Last night I saw an episode of an upcoming cable television show in my local movie theater.  The lead character is played by an actress I have enjoyed in movies in the past so I thought I would go to the screening despite being the wrong “demographic”.   I do not have cable and average less than 5 hours of television a week.   When I want to watch cable, I go to the gym! 

The television show was disappointing and slightly disturbing.  The experience itself was wholely unsatisfying.  Once the episode aired, the lights came on and that was it.  No one wanted to know what the assembled audience thought.  There was no mechanism to provide feedback.  I was left wondering why the cable channel bothered.  If this wasn’t an opportunity for market research, perhaps it was part of a viral campaign?  If so, it worked.  I have told two friends how terribly disappointing and unfunny I found the show to be. 

I have since read that an integrated campaign to introduce the show included more than just screening episodes of the show at movie theaters in major markets.  The first episode is available on websites like YouTube and on some mobile phones.  Since I went to a screening, I am surprised that I needed to find this out using Google.  While I applaud the use of multiple channels and delivery devices, more integration could have been done.  Why not let the audience at the movie theater know about additional ways to view the first episode?  Why not enable viewers to take an on-line test to determine which personality featured in the show best fits them?  At a minimum the channel could have informed the audience at the screening I attended when the first episode would air.

Has your mailbox been overflowing with letters from charities?

During the holidays a friend of mine was complaining about the number of solicitations she received from one charity.  She had sponsored a friend who was raising money for a good cause.  Now, she received solicitations every few weeks from the same charity. 

I became excited thinking that she objected to the same things I did.  I assumed that she was angry because there appeared to be no communication strategy, no plan with respect to contact recency and frequency.  Immediately I wondered, did they provide a suggested donation amount based on her past gift?  Would they ask for a donation near the same time of year as her original gift, recognizing that some donors give at the same time every year?   Was she getting multiple mailings to increase the likelihood of a response, as some credit card companies do?

In fact, she was upset for a different reason.  She was concerned that so much of her gift (and others’ donations) went toward marketing.  By sending multiple mailings, it only diminished her likelihood of donating again.  After she first donated, the charity could have sent her a thank you letter and directed her to their on-line preference center.  By enabling her to provide feedback on the type of communication (e.g., e-mail or direct mail) and the frequency of contact, the charity saves money by avoiding superfluous mailings and increases the chances of a second donation.  In addition, it deepens the relationship because the charity has asked for her input and directed her to their website where she can learn more about their mission.

Creating a preference center and following customers’ preferences, one of my suggested new year’s resolutions for e-mail marketers, also applies to direct mail.

Quote of the day

Today’s Wall Street Journal had the following comment by Colleen DeCourcy, chief digital officer at Omnicom’s TBWA:

“Banner ads will be the new junk mail.  More and more, reputable companies won’t be buying up the space around the Web sites you visit.  Clicking these ads will become less and less legitimate as brands will endeavor to do things that add more value to you in the social-media and customer-service space.”

Banner ad redux; how does SodaHead do it?

SodaHead.com seems to be the exception to the conventional wisdom that click through rates for banner ads are low.  SodaHead is an online community and according to a Wall Street Journal article a few weeks ago, “SodaHead ads enjoy click and conversion rates of as much as 10 times the industry average.”  As I wrote in an earlier post, click through rates for banner ads are typically much less than 1%.  The click through rate refers to the number of times a banner ad was clicked.  For example, if a banner ad was displayed 100 times and it was clicked on once, the click through rate would be 1%.

There are several ways that you can try to increase the likely click through rate.  You can optimize placement by displaying your banner ad on a website with synergy.  Alternatively, you can use rich media to make the ad more noticeable and engaging.  Personalization is also likely to increase clicks.  So how does SodaHead do it?  They ask provocative questions and engage viewers by asking for their opinions.

Though SodaHead has a high click through rate, what is their return on investment (ROI)?  My question remains.  What is the value of a banner ad?  As the Wall Street Journal article points out, SodaHead has yet to make money.