It’s great to be here, fantastic been some excellent sessions so far and I was really impressed at lunch time I thought it was another fantastic session. I wanted to talk today about my experience in membership in subscription marketing and what that looks like over the last twenty years.
Ben Patrick referred to me yesterday as an ‘OG’ and I think I’m going to try to take that as a compliment- but I have been working in this area a long time now. I set up Moreno Marketing a couple of years ago now with an idea of transferring a lot of my learnings and a lot of my experiences with some start up and scale up organisations. But I started out in membership about 1996, which was really my first foray into it. I looked after English Heritage, it was a membership organisation, it was responsible for things like Stone Henge and Historic Castles in English and I was in the membership team there.
Then, I went into loyalty card marketing in grocery retail focused on nutrition and retention; and then I joined a organisation called Bauer, which is a large magazine publisher with about forty-three different magazines and I was a digital marketing director focused on that. After that I went on a slightly different path, and I will talk about that later on; I launched Absolute Radio, which is a radio station in the UK and, after I spent some time there, I carried on and I was the marketing director of The Guardian as we set up the membership scheme.
There’s going to be a lot of learnings here that I want to take forward and, as we come back to the title, it’s very much about how we transform that organisation so that we can scale; how do we actually think about the marketing culture that we need in order to drive the transformation growth that we want?
As you can tell from my accent, I come from across the pond in London, I also host a marketing podcast with this man over here Samuel Monnie. He’s in Philadelphia, I’m in London, and there’s a new episode out on Wednesday so please check that out tomorrow. The reason we did it is to share some insight and try to give something back to the industry.
It’s been fascinating for me to come over to the show and get a real sense of what’s going on as well. One of the things that struck me is the origins. This image on the left-hand side Pickwick Papers by Charles dickens, which, in the 1800s, is really the first subscription product. It was released in episodes- so it was released chapter by chapter-and, by about chapter ten, Charles Dickens (under the Pseudonym of Boz) was a little bit disappointed about how things started off. So, he introduced a new character into it, and he took on the publishing of the book. As it happened, chapter ten, one of the most popular chapters, introduces a new character and it started turning into this amazing publishing phenomenon. The interesting fact there was: coming off the back of it were joke books, little exerts and plays all around this specific character -so I guess you can look at it actually as Charles Dickens being one of the first subscriptions managers in the world back in the 1800s.
Those roots then go all the way forward to now. If you look at it in terms of how large those franchises are now, those roots start early. The Millennium Falcon was artwork I had back in the 1970’s, and my love for Star Wars started then when I was a 7 or 8-year-old boy looking at this artwork. I wasn’t like a Star Wars geek- I’m wasn’t attending expeditions or dressing up in costumes, if I look at how much I’ve spent on that Star Wars franchise- my lifetime value as a star wars fan probably ranges close to one-thousand pounds- and I think that’s an important point. It’s the emotional connection that starts the relationship young.Interestingly, if you think of all the different aspects of both the Charles Dickens franchise (if you can call it that in the marketing term), it’s the same with Star Wars as well. It has a base of incredibly loyal fans that communicate, that message to another group of loyal fans, and it carries on through the generations. I think that’s an important part when we look at the cultural change and transformation as we’re trying to scale our operation. It’s plotting a path for future generations to follow. Robbie was talking about that ‘forever transaction’ and I absolutely agree with that. You’ve got to think long term -and not only in your lifetime but how it transfers into generations past there.
If you think about the franchise that came out around Walt Disney and about that need to really look after the audience base and take them with you, it’s something that, as subscription marketeers or retention experts, we know and we feel but sometimes we can be working in organisations where the culture doesn’t really reflect that short term. But today I think I’m probably preaching to the converted, interestingly.
Who here feels that retention is as important as acquisition? Who fees that retention is absolutely essential for your organisation’s transformation growth? Who feels acquisition might actually make up the majority of the budget? We know this stuff; we are preaching to the converted. Recurring revenues is key, fix the hole in the bucket before you put more water in at the top, requiring customers cost five times more than to retain existing customers. Subscription businesses give you a better multiple, we know this stuff but actually sometimes we defy the logic, that’s the culture of some of the organisations we work in.
It’s in black and white. You can’t argue with the figures- and there’s variety of different stats that back that up, important to requiring and retaining customers. But still a large amount of the cultures we work in, the organisations we work in, focus on acquisition first. So why is that? I think it’s a good challenge for us, it’s something that I’ve been grappling with throughout my career: how do you get the CEO to understand that what you’re building towards is for the long-term future?
I think it really comes down to: why do we really lose focus, and what does that look like? In simple terms it really comes down to this: Cake or broccoli? The instantaneous gratification is choosing the cake rather than the broccoli, the fact that we’re there and we’ll go for the plan that says ‘lose 7 pounds in seven days’ rather than a healthy eating plan, even though every person in the room will understand the value and the logic in the long term we still take the short term for some sort of gratification. A lot of that is based on human nature, that we look at the short term and not the long term, and there’s some interesting research that’s been done around that – they call it the pleasure principle in psychological terms- and, as you can guess, it’s the emotional part of the brain that responds positively to that positive-quick satisfaction.
Our CEO’s, our CMO’s and our CFO’s and our shareholders- they are human too and that desire to focus on the short term is something that we need to override in all our brains, something that we need to focus on. An interesting point is that if you look at high performing leaders, we look at them compared to average or even lower performing leaders; the ones who are high performing focus on the long term and the ones that are low performing tend to focus on the short term.
I know I’m in good company. I know we can surpass that- but it is difficult. Because it is a human instinct that we focus on the short term, how do we do that? We need a framework for mindset change- we need a framework to help us accomplish this transformation. And that’s about focusing on the skills and the mindset and the behaviours to achieve that change. It’s something that I’ve spent a lot of time fighting with; when you’re in the trenches, when you’re trying to work that through and you go: if you give me some money for infrastructure to spend on customer experience its going to be better in the long term and their response is: yes, I understand that, but we need to get the growth in now.
Clearly, it’s a balance. Without growth into the engine it’s hard to sustain what we do. The framework that I use for this mindset change is: make sure that you’ve got an absolute focus on the end goal not short-term things. We act as a guardian of the customer base- not the owner, we believe that you can turn water into wine, and we take an unbiased approach when we’re looking at the data.
I wanted to take you through four organisations that I’ve worked in, and how culture played such an important part in terms of the overall success. Absolute Radio is a UK radio station- it used to be quite a popular radio station called Virgin Radio- I came on board with three other directors back in 2008 to launch it as Absolute Radio and when the deal was signed, when the management was taken over we were given a one hundred days to launch this, and if it was still called Virgin Radio after one hundred days there would be a multimillion pound price tag attached -and that really focuses your mind! So, we had one hundred days to do a full national launch of a new radio station. We had two major challenges, two big insights coming out of this: without that absolute belief that we were going to achieve it in a hundred days we would have failed, and we needed every single person in the organisation to believe in that change.
The second thing is: we were a relatively small radio station at the time, and it also coincided with a global crash. So my eight-million-pound launch budget went down to a one million launch budget in a matter of days and I remember thinking how am I going to nationally launch it on a million-pound budget? So, I made sure our audience was our publishing department. David, yesterday, was talking about fandom, and what we did was use our community as our marketing department; we invited them in to the process, we didn’t make it about employees versus customers- we invited them in and said we want you to help shape our product, come on in come to our content meetings and make sure that you are part of the process of creating a new radio station.
Another thing was that we harnessed the passion of the content from staff members and from our customers as well. We created something that would rock off. Remember this was early days, it was around 2007-2008. I tell you how early it was because I made the decision that, because we only had a million pounds, not to launch in television because we just couldn’t afford it. So we decided that we were going to launch on social media. YouTube gave me a free homepage takeover (I don’t think I’ll be getting it for free these days). We got it, at the time, because they wanted to prove how powerful that media was, and we created something called Rock On and we wanted to take the audience on the journey with us so that they understood about our brand and what everything was about.
Virgin Radio used to play Brian Adams, and then it played Queen, then it played Brian Adams again- and then it played Queen. So, it was quite middle of the road, quite static in its choice. But Absolute Radio was going to be about rock music it was going to be about real music and live music and have a much broader breadth of music. We had to try and convey that, so we had this idea of Rock Off. We gave the audience control; we said look, what we are going to do is we are going to allow you to create your best playlist, choose your best band, choose your best mixtape of oasis songs and your best mixtape of 10 Bluer songs or Pink Floyd versus Led Zep, and were going to put it to a public vote and were going to run it like a world cup and were going to run it to a competition until we have a final and then we’re going to let the last two bands play against themselves and then the winner’s fan community is going to get their own radio show. It was a real-money-can’t-buy prize and the fascinating thing was that that radio show that we ran on a Saturday evening was actually a relatively quiet slot for a radio scheduling perspective- although it looks premium from the audience perspective. There wasn’t that much risk for us, but it was amazing how it took off.
We found ourselves in a situation where the audience started taking control in the marketing themselves, we had Red Hot Chilli Peppers fan forum emailing every single Friday saying that you need to go onto Absolute Radio and you need to vote for us, we had a Green Day fan- a school child who designed their own flyers and stood at the gates of the school handing flyers out saying you must go onto Absolute Radio and vote for Green Day. We had a blogpost saying I’m a fan of Led Zeppelin, saying I’m going to make sure absolutely everyone in the class is going to vote for Led Zeppelin and then someone said how are you going to achieve that, and they said well I’m the teacher so I’m going to do it! But it took off as a mind of its own and it was a real good lesson to me about when you’re looking at the culture: it’s not a divide between employers and customers, you want to wrap your arms around it and find a culture that can work for all.I left Absolute Radio and joined The Guardian-I was very very proud of that opportunity to get to the Guardian, I’d been a life long reader of the Guardian and my dad used to force me to read the Guardian at about twelve. I used to hate The Guardian- I used to hate my Dad because of it- and then I began to love both of them eventually, but that’s another story entirely. The brief for me as I came out of Absolute Radio and said the media is going downwards it’s only going in one direction and we want to take it from being a transactional news stand, to something where were creating a community. The analogy that I used in the presentation pretty much still stands true; if somebody comes up to me in the street and says look I need fifty pounds from you for Guardian content I would go .. but why, why should I do that when so much is free and actually I could consume The Guardian content and I want to consume it. If someone came up to me in the street and said the voice of that liberal journalism that The Guardian represents the public sense is danger if you don’t contribute to the future I would be reaching into my pocket to give them the fifty pounds!
So, we focused on not creating a subscription scheme but by creating a membership scheme something where people could believe in the values that we were driving, and I was in the early days of this and it’s really satisfying now to look back and see what has happened. In the days that I was there, we built a subscription base of three hundred and eighty percent increase in the subscriptions that we we’re driving. Now, if we bring that right back up to 2019 it’s a very inclusive atmosphere. It’s about more than just a newspaper; Guardian writers thank readers for the support.
This needed a huge mindset change to establish how an organisation like The Guardian was going to work for the audience and how it was going to be accompanying around it. I think this quote from Kath Bino, who was the deputy marketer and the marketing leader and is now the editor and chief, is important:
When we asked for your support and we weren’t sure it was going to work both friends and competitors were deeply sceptical and I think that is very very true but you, the readers, responded and it was inspiring
One hundred and eighty different countries. Over one million different types of donations now whilst I was there- and when I joined the losses of The Guardian were reported at about seventy million.
This isn’t the only reason they are breaking even, there was a big cost cutting exercise as well but The Guardian is now breaking even with a view to make a profit and it has made a small profit this year. So, a success story but built on a framework, which was: to try and move us from that short term thinking where all we had to do was sell newspapers through to something else. How do we take that audience from being a casual participant in the organisation to someone who is engaged, someone who is connected, where we’re inspiring them and that’s very much about a win-win situation where we’re providing value, a mutually profitable relationship providing content, products and services and then moving them round so that we’re engaging them to be advocates. Advocates like those in Absolute Radio, for example, where we create that membership and loyalty and that acts as a catalyst and the circle carries on.
But that cultural change doesn’t happen overnight. I spent two years at The Guardian after that initial interview process and it was the same conversations over and over again until we got the culture to replace what we were moving forward. A bit of a different example here, it’s a little bit Christmassy- So, I moved into a gaming industry after I left the Guardian and then I was the CMO of Virgin Wines. It is a classic wine subscription club but, interestingly, it’s about how do we try to reinvent that classic wine subscription club? How do we create something different? I won’t go into the mechanical because I think the cultural point I’m going to make is more important.
Trying to reinvent your product as a nice wine advent calendar, not sure if you have that here in the US, but it is a very popular thing in my house hold every Christmas I can say! The point I want to talk to you about is that passionate belief in customer satisfaction. So Virgin Wine’s strapline was: ‘Life’s too short for boring wine’ (and I think that’s a pretty good strapline actually). It represents that every single bottle counts.
Often, after we had sold the wine, many thought that was the end of the process. So, my job was about culturally changing it to the fact that the end of the process happened when someone is consuming that glass of wine and they are happy. It was interesting because we don’t control the whole of the process, it gets to the point where you make the sale and then the delivery operators take control (quite frankly some of the delivery operators let you down sometimes) and its frustrating because you think well how can I do that, what can I do about it?
There was a sales guy called Matthew at Virgin Wines and he was brilliant, he could sell wine to a T-total and quite often he did as well. One time he was on the phone to this lady who had rung complaining that the wine hadn’t arrived and she had a party at the weekend; so Matthew, rather than actually just taking down the details and taking the ticket down to customer services, just had a conversation with her about the type of wine she liked, talked about the fact that it’s frustrating, wishes that he could do more- and it turned out she actually lived in the same town as his parents and he that weekend went to visit his parents and took a case of wine on the train and he knocked at that ladies door and delivered it himself and he just said ‘I wanted to make sure it got to you on time for your party’. The bit that I find powerful is the nice element of surprise and delight example, the bit that was powerful is that Matthew didn’t tell anyone he was doing It, he didn’t write a quick email to senior management saying I have this great idea and it’s going to be on Twitter and social media- he just went on and did it.
This happened because he believed in the core purpose. So, you have to have belief, try and create that opportunity, if you want to transform your organisation it has to be from the CEO down to every single individual.
I’m biased in the final case study I want to focus on. This is a new fintech start up. It’s fast, it’s just on the start of its journey. What it does is, if you are a consumer and you’re looking for an actual advisor or a mortgage advisor it will provide the right advisor for you, it will provide the right advisor for your opportunity. Interestingly, it’s a classic subscription model but with a bit of a twist, consumers come in for free putting in all their details, advisors sign up they take a subscription they pay for an enquiry and they take that subscription. So, it’s not just one but two funnels for us to work out here.
The key to the success is dissecting forensically; looking at every single stage of that customer experience for both consumers and the professionals. We’re in a six-month process at the moment where we’ve basically unpinned absolutely everything and we’re now putting it back together again. We’ve seen some great results in terms of how we’re seeing conversion increase, so I thought that was really interesting the point about how technology driven business is, using old school subscription thinking and how that is changing.
I think the key take out for me there is to measure everything, until you actually measure everything, and you can have the unbiased look on it later it’s very difficult to work out what your key drivers are and, in a place where we’ve got a huge amount of priorities, it’s difficult to see. Ok, so I’m going to finish up quickly here with a quick quiz.
Who’s the greatest individual marketer out there? Who do you recon has made a great impact or shown ingenuity? I’ll tell you who I think- Taylor Swift. I’m not a Swift fan myself, I’m an alternative rock man, last time I was in Boston was when I came to watch the Pixies. But she has one hundred and fifteen million followers, two hundred and seventy-six posts, not even that much content going on Instagram but a huge actual coverage- how is that achieved? Authenticity. Try to break down those barriers between brand and audience, looking after the fans, being individualised and making sure you’ve amplified it. There’s a vision there in terms of what you’re trying to create, reinvention, consistency and absolute focus on what you are trying to achieve, that mutual respect from the audience and generating super fans.
Wayne Price, he’s seen Taylor Swift perform thirteen times in three years, he’s been all over Europe and he’s spent over ten thousand pounds on her concerts. Now, if you’re going to look after any of your customers, they are the ones you want to look out for, but the trick is trying to do it in an authentic way. Brands have super fans as well and they are with you for a long time. I’m not suggesting that the goal here should be to try to get your customers to get tattoos, but I think it is interesting in terms of what brings this audience together. Sometimes it can be slightly on the obsessive side but at the same time there is an emotional connection there, that gratification that I talked about works the other way around as well.
There’s a lady called Pat Reilly and, in 1975, she started collecting coca cola memorabilia, she changed her whole home into a coca cola museum. When asked why she does it, she said that as well as enjoying the drink and flavour it represents one of the best publicity campaigns in the world and she liked the intelligence, smart thinking and how it promoted the brand and how it evolved into something much bigger.
You should embrace those super fans and make sure they drive that culture and they should be something to be celebrated. Finally, it can’t be faked. This is really important and I wanted to end on this story from the UK that I know has come across the pond.
There’s a plumber from a northern city that got called out to this lady and the invoice he gave her got posted on Twitter by his daughter, and not the plumber himself, and it says that the lady is ‘ninety one years of age with acute leukaemia, there will be no charge for this under any circumstances we will be available twenty four hours to help her and keep her as comfortable as possible’. It was the daughter that posted that, and as a result, he’s actually been honoured by his local town. There was a crowd funding campaign where actually it’s now allowed him to set up a not for profit business servicing and helping pensioners.
The important point is that this stuff has to come from the heart, it has to come from that emotional perspective. Creating that framework to success is: stick to your purpose and be authentic. That’s incredibly important, it has to start there, you have to seize moment, you have to know where those opportunities are and make the most of them. Change your culture to focus on long term customer satisfaction and reset that mindset and you’ve got to believe, you’ve got to plan for success and scale and you have to act as the evangelist people in this room have to act as the evangelists for the CEO’s, the CFO’s and the investors. You need your own internal marketing plan and you have to be acting as a fan and build a fan base that will support you in your old age.
Plot your own path, it’s really interesting I took this decision to go it alone two years ago after twenty odd years in the industry because I wanted to help start up, scale up people at the start of their journeys, and I have loved every single minute of it. So, If you can’t make it work in your own organisation, find a way to make it work in your life- that is my recommendation. And that’s all from me.
Across the Pond, have a listen. Again, we’re just trying to empath some of this knowledge there’s a new episode out on a Wednesday.
Thank you very much.