I’ve been reading Michael Treacy’s Double-Digit Growth and recommend it for anyone running a business or having P&L responsibilities. In this book, Treacy outlines what he calls his “5 Disciplines of Growth”:
- Keep the Growth You Have Already Earned
- Take Business from Your Competitors
- Show Up Where Growth Is Going to Happen
- Invade Adjacent Markets
- Invest in New Lines of Business
I’ve read through the first three and found #1 and #3 the most interesting so far. The first point about keeping the growth that you’ve already earned has really sparked my interest. Treacy talks primarily about customer loyalty and programs to support it…which got me thinking…
How many publishers are really doing a good job building customer loyalty? Quality is “Job One” as Ford used to say (in their pre-Firestone/Explorer days). That phrase certainly applies to all industries though and is generally assumed to be a given. If you don’t offer quality products, how do you expect to build customer loyalty? With cheap prices? Maybe, but is that a long-term solution?
Part of the challenge is that most publishers don’t have a direct relationship with their customers. Most customer loyalty programs have to be conducted through a retailer. Should publishers be more aggressive in establishing a direct relationship with their customers? If so, what sorts of programs make the most sense? How about these:
- Frequent flyer program – After you buy a certain minimum number of products, you get one free.
- Premium content program – Access to a premium content site is offered for free or at a discounted price.
- Bookclub program – Customers who promise to buy a certain minimum number of books over 12 months get a special discount on all of them.
Some publishers already do a good job of tracking and following-up with their existing customers. O’Reilly is a good example. Every O’Reilly book you buy generally has a blown-in registration card. I’ve received catalogs and e-mail blasts from O’Reilly in the past, most likely from a prior reg card submission.
Amazon is clearly a leader in building customer loyalty. They not only experiment with various programs, but they study the data and leverage the results. It’s one thing to launch something like the 3 programs I’ve listed above, but it requires a much larger effort to regularly analyze the data, use it to make improvements to the programs, etc.
I’m looking forward to reading Treacy’s next chapter on how to invade adjacent markets. I’ve always felt there are loads of opportunities with that strategy, especially in the computer book-publishing segment. In the mean time, what are your thoughts on customer loyalty and how publishers can do a better job building it up?