roundtable 2003 hay

ROUNDTABLE ON STRATEGIC MARKETING

Retention Case Studies

August 25, 2003

Overview

Retention versus Acquisition

What is included in Retention Marketing?

Case Studies The Hamilton Spectator

The London Free Press

Pacific Newspaper Group (Vancouver Sun & Province)

The Globe and Mail

Recommendations

Retention vs. Acquisition

We’ve all heard how it’s much easier to keep a customer than to get a new one.

But when circulation numbers are under pressure, we generally turn up the heat on acquisition.

The demands of month to month circulation targets keep the focus short-term instead of long-term.

Retention marketing takes time to implement.

What is included in Retention Marketing?

Reader Contests?

Enhanced Customer Service?

Welcome Letters?

Surveys?

Subscriber Reward Programs?

Value added incentives?

Case Studies

The Hamilton Spectator


100,000 Circulation

Canada’s ninth largest market

Owned by TorStar

The subscriber base demographically reflects the market

Faced with declining circulation trends

Annual churn rate is close to 100%


Past Retention Efforts

Reader Contests (Bingo, Grocery Give-Away etc.) Open to everyone

Intended as a reason to buy the paper

Generates a low unique player database

Most players are already subscribers

The Spec Club Card Over 100 local retailers provided offers to subscribers

Difficult to maintain fresh high value offers

Operated internally and offers acquired by ad sales reps


Reader Rewards

Valuable discounts and offers for Spectator readers

Regularly featured as in-paper coupons

Approximately 20 per year

Locally sourced through Promotions


Revised Reader Rewards

Valuable discounts and offers for Spectator subscribers only

“Membership has it’s privileges”

Regularly featured as ¼ page ads

Subscribers must go to the Spectator to take advantage of the offer.

Offers are the best discount available


80,000 Circulation

Affluent, well educated white collar market

Owned by SunMedia

The subscriber base demographically reflects the market

Faced with declining circulation trends of up to 4% annually until 12 months ago


Revised Acquisition and Renewal Strategy

Formerly they sold 8, 11 and 13 week orders at a slight discount of 5%

Now they only sell 26 and 52 week subscriptions, but at 50% off

On renewal, the step-up offer is 33% off, again for 26 or 52 weeks only.


Results

Circulation has grown 2.4% over the past 12 months since implementation

All former short-term subscribers are being targeted for conversion

Close rates with this segment have been good at 11%.


Next Steps

Maintain a disciplined approach with the long-term step up offer tactics

Understand the real impact on circulation volume and revenue

Acquire the necessary tools for measurement (R-Logic is on order)

The Vancouver Sun

The Vancouver Sun

160,000 Circulation

One of Canada’s largest and most diverse markets

Owned by CanWest

CanWest owns the other major daily The Vancouver Sun and several weeklies effectively dominating the market

The paper has determined that acquisition alone cannot keep pace with circulation declines.

They believe that mathematically they cannot acquire fast enough to offset churn.

Most sales were with a 50% discount.

The Vancouver Sun

The newspaper made a conscious decision to address retention.

Subscribers who stopped are not restarted at 50% off for at least 2 months.

As part of a larger customer focused program, a loyalty component was developed.

The Vancouver Sun

The loyalty program includes:

Welcome Call

Welcome Letter

Subscriber Survey

Executive Call-Backs

Random acts of kindness

The Vancouver Sun

They have tracked all individuals touch by the loyalty program (1,500 to 2,000 per year).

Recent measurement has shown 12% better retention with this group than overall levels of two year plus subscribers.

They have established a benchmark level of attrition based on “uncontrollable subscriber loses” such as death, moving out of the market etc.

They believe the group touched by the loyalty program (now 4,000+) is retained as close to this benchmark as possible.

The Vancouver Sun

The Globe and Mail

The Globe and Mail

Canada’s National Newspaper

1,000,000 readers per day

Circulation 350,000 daily

Home delivery 200,000

80% EZ-Pay

94% Full Price Home Delivery Subs

Subscription Price $312 per year

The Globe and Mail

Highly educated, affluent audience

Managers, Owners, Professionals etc.

White collar males make up a large component of the subscriber base

Delivered in every major market in Canada

Majority ownership is Bell Canada Enterprises

Loyalty Issues

Subscribers pay a $312/year – no discounts

The newspaper rarely communicates with them due to the fact that most are EZ Pay.

There is considerable data about subscriber interests and hot buttons at a macro level. More detailed information is being collected at an individual level.

A test of the impact of providing relevant value adds to subscriptions was necessary.

Advertiser Opportunities

There is no direct mail currently being sent on behalf advertisers

The subscriber list is not rented, but advertisers want to access it.

The subscriber base is difficult to reach by traditional marketing channels.

The Landscape

The biggest theatre advertiser needed to boost Lion King ticket sales

The contract with this advertiser was being negotiated during this timeframe

Globe and Mail subscribers have a clear affinity to the theatre.

It is a very competitive market, nationally and more specifically in Toronto.

The paper just had a 4% home delivery price increase

The Program Details

A mailing sent from the Globe with a Lion King ticket offer reaching Toronto area subscribers providing access to a very desirable but previously inaccessible list.

This value-added service should help secure the advertising contract.

The advertiser was part of positive offer and message to the subscriber base, helping with their brand image.

The advertiser paid all costs (approx. $50,000)

What We Did

Extracted All Subscriber records through AnalytiX

Removed businesses

Targeted the Geographic trade area for the client

Established a campaign for the project

Track results

Subscriber Benefits

25% percent off Lion King tickets

Special “Globe and Mail Night” for 500 subscribers as special guests ($50,000 value)

Front of the Line privileges for an upcoming production.

Perceived as a value add to their subscription

Advertiser Results

Orders: 1,440 Seats: 4,153

Close to $300,000 in seats were sold.

That is an ROI of six times their investment.

Excellent response from the subscriber base.

The advertiser signed a 2 year contract.

Subscriber Results

All respondent data (who bought tickets)was provided by the advertiser and loaded into AnalytiX for tracking.

Of those who took the Lion King offer, 6% have stopped versus 8% in the control group.

Retention is 9 times better with the Lion King special night guests than the control group. (1% versus 9%).

Many subscribers took the time to write letters and emails thanking the newspaper.

There are other advertisers interested in duplicating the program.

Considering 4 - 6 similar mailings per year. (golf, travel, theatre, dining)

Further development and segmentation of the database is essential as well as continued campaign management.

A formal retention program is planned for 2004

Next Steps

Recommendations

Consider the “Membership has its Privileges” approach for full-week subscribers

Establish benchmarks by channel for: Churn

Retention

Cost per Order

Cost per annual unit of circulation

Annual “Uncontrollable Attrition”

Recommendations

Know who you want to keep

Some prospects are not worth signing up and they’re way too expensive to retain

Segment and profile your subscribers based on retention and learn all you can about each group.

Establish clear, measurable objectives

Recommendations

Calculate the value of a Retention Program

Reduced acquisition and renewal expenses

Advertiser value and leverage (ie: Lion King)

Test a program that matches your newspapers key business objectives

Get the right tools resources and training to accurately and effectively manage retention.

THANK YOU!

roundtable 2003 hay

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