Radio Convention – Loyalty Schemes For Radio
Nigel Walmsley, Chairman of Carlton TV, opened The Commercial Radio Convention with a seminar on ‘The Changing Media Business’. He was giving his views on how the shape of the TV, newspaper and radio industries will change after the new broadcasting legislation, what the likely advantages and disadvantages of the process would be and how the smallest of the industries can best manage the change.
Mr Walmsley first talked about the similarities between radio and television such as schedules and audience value packing and then pointed out how new media would not replace established media: subscription television would never take over from free television.
He went on to say how the Broadcasting Bill had started out as a short bill but had now turned into a major piece of legislation and questioned whether anyone should be surprised by this. He said many would argue such laws became outdated as soon as new channels appeared.
Mr Walmsley praised radio by saying it was moving into a tough world but would not be displaced by TV or newspapers and would go forward successfully. But to improve the success of these industries they must move on, devoting more time to ideas and then launching them at the right time. Mr Walmsley said he thought that digital broadcasting would not take over from radio but that new opportunities must not be ignored and finished with the statement: “You can’t rely on inspiration and genius”.
Mr Walmsley said that larger groups must take new risks: new talent must be provided with more opportunities to shine and enhance services to advertisers. This will help reduce losses in new businesses.
Another of the seminars was ‘The Price of Loyalty’, which was chaired by Sandra Keeling, a consultant at Kendall Tarrant and Tom Hunter, managing director of Red Rose Rock FM. They discussed whether radio stations could emulate the supermarkets, book clubs and other retail models where loyalty schemes have been so successful and whether competitions and listener participation have a role to play.
Sandra Keeling spoke first giving her views on the loyalty schemes: she started off by saying retailers were the experts and to be an expert you need a successful and original campaign. A loyalty scheme has many aims including constantly reminding the customer why they bought the product in the first place. She said the loyalty card is the most popular loyalty scheme and is now one of the most successful marketing tools of the 90’s. Her opinion is “it is better to spend money retaining custom rather than developing new”.
She went on talking about other types of companies other than supermarkets who have loyalty schemes such as Classic FM which has an annual subscription and provides discounts on theatre tickets amongst other things.
Ms Keeling then talked about the Tesco Clubcard which was the first of its kind to launch, aiming to stay at the top above all the other supermarkets by, for example, allowing its use in B&Q plus it’s 250 petrol outlets. She closed her speech saying that Tesco’s loyalty card has paid off pointing out that they only need a maximum growth year on year of 1-3% to gain profit whereas Sainsbury’s need 5-8%: getting in first had paid off.
Tom Hunter spoke about his own radio station which started the Red Rose Gold Listener Club where members receive a newsletter containing competitions, editorial features and pictures. Members also get discounts off theatre tickets and special offers. They charged £5.00 for a life membership and attracted 4,000 members straight away, gaining £25,000 in revenue. He compared the advantages and disadvantages of this system saying it worked because it boosted team morale within the work force but in the end the disadvantages were prohibitive: it was labour intensive and, after the initial launch, the numbers dropped and finally, because it became a cost centre and made no profit, caused the situation to be reviewed carefully.
Mr Hunter briefly talked about the other options such as magazines, credit cards, client loyalty schemes and database marketing but closed his speech warning that radio must think carefully before beginning a loyalty scheme.