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Orange, the AA, Waitrose, British Airways and Jaguar might all appear to be wildly different companies with completely different customers, products and outlook. Yet amongst these and many other companies a common bond is shared. All of them publish customer, CRM-led magazines.

Looking back 10 or 15 years, the picture was vastly different. When British Airways launched its customer magazine High Life in 1973, it was one of the first. Now brands in an increasing number of sectors are using customer magazines as a serious direct marketing tool. According to Mintel, contract publishing is valued at more than £313m in the UK alone, and comprises some 853 titles. Since 1994 the sector has grown 324 per cent with revenue growing at 88 per cent in the same time. Revenue has grown by 18 per cent in the last two years alone.

The retail and distribution sector takes the lead with a 16 per cent market share, according to the Association of Publishing Agencies (APA), the representative body for magazine publishers. Hot on its tail are financial services (15 per cent) and travel (11 per cent). Utilities have also entered the arena - the number of titles almost doubled between 2000 and 2002.

But for every British Airways, Goldfish or Thames Water (see boxout page 43), there's another brand that hasn't got to grips with customer magazines. And there is still no real representation of the DM role that customer magazines can potentially play. "The market has become more sophisticated but a lot of marketing directors still aren't aware of the benefits of customer magazines and what they can do," says Julia Hutchison, APA director.

COMMUNICATION TOOL

"Customer magazines are a powerful communication tool that needs to be more widely recognised," says Andrew Sculthorpe, deputy managing director of Illustrated London News Group, which publishes customer magazines for the likes of property developer St George, The Orient Express and South West Trains. "They buy time in front of your customers in a way that most other marketing collateral doesn't."

Customer magazines help brands build closer, better-informed and more profitable relationships with their customers. "You want your magazine to encourage brand loyalty," says Roger Wilsher, managing director of contract publisher Wrap, which produces titles for brands including Co-op's travel division and Telewest Business. "However, it also has spin-off benefits including generating sales, enhancing brand awareness, cross-selling products and database cleaning. It gives you a lot more quality time with customers than anything else."

And because they tend to be either posted to the customer base or distributed through stores, they provide a direct channel to a brand's customers. As magazines, consumers are also more receptive than to many marketing communications. "It's one of few marketing channels that is welcomed into the house," says Graham Lake, managing director of Just, a relationship publishing agency that produces customer magazines for brands including Lexus, Microsoft, Bluewater and Goldfish.

And yet when it costs extra money to produce a magazine, do they really make the investment more worthwhile than mail in pure ROI (rather than branding terms)? According to Telewest, the answer is a definite yes. Telewest Business's Business Outlook magazine uses competitions and offers as a way of gathering customer data. It recently ran a competition to win a Palm Pilot with a view to collecting email addresses. "We got a six per cent response rate and everyone gave their email address," says Wilsher. "We're currently running a similar competition with a 10 per cent response so far."

Customers also come to see it as their magazine, making it a powerful tool for the client in terms of being able to find out what customers really think of it. "Instead of the customer having a bad experience and disappearing, they perceive they have a friend in the magazine that they can write to, which gives the client the opportunity to make amends," says Wilsher.

ACCOUNTABILITY

They also need to provide a way of communicating back, which is why getting the balance between attention-grabbing content and calls to action right is so crucial. When this is so, the magazine owner can track ROI as well as the overall success of the magazine. "This is crucial," comments Paul Farthing, managing director at Target Direct. "You need to assess it's making a difference, whether through surveys or tracking sales."

How a brand tracks this success can differ depending on the reason for the magazine in the first place. Whether it's primarily a response mechanic or a way of building brand awareness can depend on a brand's lifestage.

"With Lexus, the key driving point behind the magazine is to get people to understand the brand," says Lake. "With Goldfish however, the key driver is response. They want people to fill in coupons, phone the call centre and do things straight away. The beauty is they deliver across both."

As such, customer magazines need to be part of a brand's overall marketing plan. "The important thing is to look on the magazines as part of the customer communication strategy," says Graham Green, chairman of agency Meerkat, which does customer publishing for Dulux Trade. "Relevance, tone of voice and frequency are key."

What works depends to an extent on the sector, and also whether a magazine is B2C, where lifestyle content is often welcomed, or B2B, where it might not be. "In B2B, customers don't look to you to provide them with general information or entertainment.

They want specifics," says Green. "With Dulux, although painters and decorators are quite possibly interested in football, they don't want this from a customer magazine. You've got to have content that's relevant to them."

Increasingly, brands are varying the content in their magazines to appeal to different audiences, some of them send out different magazines to different sectors while others vary sections inside the magazine. "As print becomes more sophisticated, companies are looking at bespoke sections for specific segments," says Hutchison.

It's also not uncommon for a company to have more than one magazine. "We do two magazines for property developer St George," says Sculthorpe. "One is mailed to the database and advertised in the national press, and is also available in marketing suites with 60,000 circulation. The other is called Platinum, for £1m properties only, and has a circulation of 20,000."

This shows just how flexible customer magazines can be, and many brands are taking advantage of the opportunity they give to build closer, more profitable relationships with their customers. According to Wrap's Wilsher though, there's still a job to be done in building awareness of just how valuable a tool they can be. "The number of people benefiting currently is still the tip of the iceberg," says Wilsher. "The beauty of these publications is the time they give you with your customers and their flexibility."

THAMES WATER'S NEW WAVE

New Wave is Thames Water's customer magazine. Launched in Spring 2001, it goes out to 300,000 customers two or three times a year. The magazine offers tips on where to go and what to do in the region, plus cooking and gardening advice. It also includes water-saving advice and the ECHO Buying Guide that roadtests energy and water-efficient white goods such as washing machines and offers readers the chance to buy everything featured.

"It goes out to our top 10-15 per cent of customers - those we feel are most likely to buy from us," says Andy Tunstall, Thames Water's head of marketing. "We do database analytics to come up with these people.

"It's a showcase of everything we do and gives us the chance to get important messages across on our core water product. Next year for example, our prices will go up, so we've run a series of articles explaining why and it's proved helpful in this PR case. I think people are quite reassured by it - people are genuinely quite interested in their water. To measure its success, we do a lot of quantitative analysis - mainly on people who have bought from us and we also run focus groups.

"When we first launched there was the potential that the water industry might go the way of other utilities and become deregulated so it was partly a defensive move to build loyalty. We also wanted a route to advertise our non-water related products, like energy, because we can only put water-related products in with the bill. And we wanted to build regular communications with customers."