Last month, Jon Coleman wrote on article entitled “Misreading PPM and What Drives Ratings.” In it, he talked about the tension between in-the-moment performance and brand value. Jon expressed concern that radio programmers and management are sometimes so overly focused on preventing in-the-moment tune-out that they don’t do the big bold things that drive loyalty (and regular tune-in) to the brand. Sometimes the very things that cause short-term pain result in long-term gain.
We have been talking with our clients about this “in-the-moment/brand” tension for many years, particularly since the advent of PPM, and we have drawn parallels to industries outside of radio. A few weeks ago, another great example made the news: CVS/pharmacy will stop selling cigarettes and tobacco products in its more than 7,600 U.S. stores.
Short-term pain? Yes. It is estimated that CVS/pharmacy will lose $2 billion annually from tobacco shoppers.
Long-term gain? I’d bet on it. While there is certainly a moral case to be made for this move, the company is surely also hoping that the change sends a strong positive message to consumers about the CVS/pharmacy brand. In explaining the move, it says:
“The sale of tobacco products is inconsistent with our purpose – helping people on their path to better health…By removing tobacco products from our retail shelves; we will better serve our patients, clients and health care providers while positioning CVS Caremark for future growth as a health care company. Cigarettes and tobacco products have no place in a setting where health care is delivered. This is the right thing to do.”
It’s the right thing to do, and it’s the right thing to do for business. Short-term pain, long-term gain. Is there a lesson for your station to take away from this?
Sorry to tell you, but comparison of CVS and radio is a bit incorrect. CVS’ altruists/loyalty efforts aren’t what they seem. They are getting a Governent subsidie for canceling their tobacco contracts. I sincerely doubt that radio stations are going to get kick backs from Uncle Sam.
Agreed, my friend. However, to the point of the article, the stock market is a better reference for radio. Playing the short game is not a good strategy for long term success.