Radio's New Currency - Customer Capital

Acquiring a permission database for long term market leverage has finally found the radar of most smart radio operators. How to manage a growing database for maximum effect is now entering the playing field of radio's elite. The rest are still selling rate cards.

The world of BIG business, however, got this message long ago and instituted systems for the intention of forming better Customer Relationships. This is the new "Capital" that Wall Street will value most with an eventual uniform reporting standard where current and future earnings are in proportion to the size and QUALITY of customer relationships.

"Eyeballs" are no longer a standard for success. The customer economy says the 'hearts and minds' of those eyeballs are! The sum of the customer experience, good or bad, dictates the future of the brand. "What are you doing to acquire, retain, and grow these relationships?" are now benchmark questions from investors.

Consumer companies who are not deploying database/relationship measures to drive success will simply be left for dead. And if Fortune 500 is being held to these standards for shareholder value, you can bet your last dime that very soon, someone selling time or space, will be asked to provide the same raw data ... or "NEXT, please!"

Advertiser Perspective

When a major advertiser is spending resources to ascertain, they will certainly scrutinize media spending dollars in a like way.

1. What is the size and quality of the database?
2. What is their growth in the number of active customers?
3. What is the current retention rate?
4. What are the profits per customer?

David Slays Goliath!

The sea change started in January 2000 when America Online bought Time Warner. The 400 lb. baby gorilla had the nerve to buy a 1000 lb. orangutan and send CEO Gerald Levin and his ilk to the beach.

How could this have ever happened? CUSTOMER RELATIONSHIPS had a great deal to do with this equation.

AOL had a 22 million database. Time Warner had 30. Aside from the fact that AOL used it's stock price to fund the deal, Wall Street valued AOL's customers at $7,455 each. Time Warner? $3,495!

Why the disparity between a newcomer and a venerable giant? SIMPLE! One had the power of e-communication down cold. The other one was marching in an old parade.

How Much Is That Gorilla In The Window...Worth?

They both had advertising, subscription, and content models, but interactive communication was the deadly difference. Time Warner identified "Customer Relationships" as billing you each month for cable and magazine renewal subscriptions.

AOL, on the other hand, gave you instant messenger service, 24/7 tech support, and a host of other services that truly endeared the listener to the brand. AOL knows who their customers are because they experience the brand several times per week, if not, per day.

Are you aiming for this with your listeners? Are your station missives cementing or undermining brand trust? The brand experience with the listener comes from a number of places. On-air, remotes, billboards, TV and etcetera can all make for good brand, but never a 'real time' probe into the heart.

Today, you can send out an ill-conceived email and wipe out a ton of brand trust -- or enhance it. The proper, direct, one-to-one relationship, acquired from database initiatives, will be the difference between winning and losing. It's your EDGE.

Number 2 Pencils Only

Go to school on it right now, in the early stages of the revolution. In the not to distant future, an agency will want to know more than the size of your database. They'll want to know how you're growing listener franchise.

1. What is the quantity/quality of the opt-in? (Is the relationship shallow or a branded experience?)
2. How is the opt-in acquired?
3. How often and in what way do you communicate with the listener?
4. What is the retention rate?
5. What is the activity frequency?
6. How is customer segmentation executed for maximum customer value?

EVP Of Listener Experience

One day soon, most radio stations will find a place for an executive, who in tandem with Programming, Sales and Marketing, executes the total listener experience for the station. This will be someone who has a feel for the station and effectively communicates it in an exciting, cogent, yet -- commercial message.

While there are many ways to 'collect email,' the 'quality of opt-ins' should always be the target. Loyalty driven opt-ins has much more value than spot visits to a web site.

Why?

Because loyal and satisfied listeners share the experience with their inner circle.

Beyond The Logo

Branding is more than a logo on a van or concert masthead. The total listener experience is the essence of brand. Radio must take its already superior local brand to an electronic world that affords the listener a more sensory feel of the product.

Cost per point will take a back seat if you can tell Ford or Pepsi the quality of your listener relationships. Timely, enriching, and compelling ONLY, communication with the listener, (multiplied by thousands) will reap large rewards. And it will also serve as your working resume for advertisers who are employing these standards.

The conversation with a future client will indeed be a short one for any player who can't talk and walk this game.

If you feel like talkin' 'bout it, reach out to me at jimmy@loyalears.com.