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October 2009

CEOs Beware Failing Business Media

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magazine is history.  The Wall Street Journal is turning into a general interest newspaper. The New York Times business section shares space with the sports columns on most days (and is almost always less insightful). CNBC is business reporting with a roller derby attitude.  BusinessWeek, Fortune and Forbes could show up on ebay any day.

Should CEOs care?  Bill Holstein thinks so.

Holstein is a business writer who has covered the waterfront. His book, Managing the Media (Don't Let the Media Manage You), should be on every CEO's bedside table.  It's small enough to fit next to the clock radio and short enough for most titans of industry to read before Letterman gets to his musical guest.  

Holstein's astute observations on how the decline in business journalism will impact CEOs are not in the book.  For that, turn to the latest issue of Strategy + Business, published by Booz & Company.

According to Holstein, cost-cutting in business media means most CEOs will be dealing with younger, less knowledgeable reporters. Believe it or not, that's bad news -- very bad news. Inexperienced reporters are more easily manipulated by a company's competitors and third-party opponents.  (What large company doesn't have third-party opponents?)  

Furthermore, it means there are fewer credible platforms for telling a company's story.  And therefore, fewer places a CEO can find stories from which he or she can learn something. And finally, the decline in the quality of business media makes it less likely that the really serious policy questions will get much coverage -- like whether globalization is a net positive force in the world, what government constraints on business are legitimate, etc. 

Holstein also gives some generally solid advice on what a CEO can do differently in this environment.  I say "generally" because one piece of advice he quotes -- "seek out the smartest and most experiences journalists ... to do serious and in-depth reporting about (the) company" -- may be on the naive side. 

But who can argue with one of his central recommendations?  "It falls to PR professionals to spend more time explaining how a company fits into a broader social or economic trend -- articulating their company's stories in a way that the reporters can understand and appreciate."  

Ironically, Holstein himself would have argued with that advice three years ago when he was editor of Chief Executive magazine. In those days, he didn't think too much of PR people.  "PR people don't understand your business," he warned his readers in an unusual editorial rant.  "If they did, they wouldn't be PR people."

We all learn.  Must have been the lunch we shared at the Overseas Press Club when he was researching his book.  (He paid.)

Real Service Is Personal

NJPAC If I were rewriting Secrets of the Marketing Masters, I would definitely include the chief marketing officers of nonprofits.  And at the top of my list would be Catrina Boisson who does marketing for the New Jersey Performing Arts Center.  (Full disclosure: I used to be on NJPAC's board.)   

All nonprofits face unusual challenges these days, including the weak economy, slim resources, and stiff competition from equally compelling good causes. In NJPAC's case, add proximity to the cultural offerings of Manhattan, which is a short train ride away, and the less-than-inviting-if-largely-undeserved reputation of its location in downtown Newark. 

Nevertheless, NJPAC recently completed one of its most successful seasons. One of the reasons -- unusually sophisticated Customer Relationship Management.  CRM is one of those acronyms that consultants like to throw around, but Boisson and her colleagues have turned it into the way they do business.

Thanks to a ticketing system that captures information such as the number of events a household attends, the number of tickets they buy, and how much they pay, Boisson's team was able to score all NJPAC patrons by their lifetime value.  That led to a unique customer loyalty program for the 4000 households that were most critical to the center's success.  Interestingly, not all of the most valuable households bought subscription tickets and not all were "members" or donors.  Some, in fact, had not been to the center for two seasons.

Boisson's team assigned a personal representative to each of the 4,000 households. The idea was to give them personalized end-to-end service for everything from ticket purchases, to parking, restaurant reservations, and gift-buying from the center shop. Armed with information such as the last performance their client attended, how long it had been since their last visit and their entertainment preferences, their personal representative could even call to let them know of upcoming shows.

The results?  Customer churn is down.  Attendance has stabilized. Ticket sales are up. And a whopping 97 percent of the households with personal representatives say they would recommend NJPAC to others?

Here's the kicker -- serving all 4,000 households took a total of four personal representatives. You can read more about NJPAC's customer loyalty program here