roundtable 2004 hay_wheatley

Subscriber

Acquisition and Retention

Case Studies

Roundtable on Strategic Marketing

August 23, 2004

Today’s Topics:

• Circulation Issues Facing Papers

• Case Study: The London Free Press Circulation Challenge

• Retention Tactics

• Case Study: Update The Globe and Mail Subscriber Recognition

• Questions

Circulation Issues:

• Declining Circulation Trends

• Advertising Client Perceptions

• Increased Revenue Expectations

• Magic Silver Bullets are in short supply

Case Study:

The London Free Press: Circulation Challenge

Total Average 6 Day (Mon-Sat)

Paid Circulation – 10 year trend

119,585 116,907 115,342114,761112,614108,755

106,120 106,011104,698102,961 98,19294,371

0

20,000

40,000

60,000

80,000

100,000

120,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Source: ABC Audit Report 2002; Circ is LFP data

Home Delivery Average 6 Day (Mon to Sat)


91,388

89,199 88,405 88,80088,257

85,231 84,029 83,962 84,353

82,972

79,101

77,605

70,000

75,000

80,000

85,000

90,000

95,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002


Telemarketing discontinued Aug. 2000

September 2001 to August 2002

Home Delivery trend

Source: ABC Audit Report; 2002 Circ is LFP data

September 2001 to August 2002 Total Circulation Trend

78000

80000

82000

84000

86000

88000

90000

92000

94000

96000

p9 p10 p11 p12 p1 p2 p3 p4 p5 p6 p7 p8

Circulat ion Linear (Circulat ion)

For e c a st e d t r e nd f or ne x t 6 pe r i ods

79.7% Voluntary (Full Rate)

41.9% Telemarketing: 13 Weeks for $39.99 (23% Discount)

Retention Curves

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total

Sub

scrip

tions W

1W

2W

3W

4W

5W

6W

7W

8W

9W

10W

11W

12W

13W

14W

15W

16W

17

Intervals

Pe

rce

nt

Ac

tiv

e

#1

#13

Retention Curves of starts from Sept. ’01

to Aug. ’02 retained 17 weeks out


The Proposed Solution:

• Focus on longer-term subscriptions

• Calculate the risk/reward potential

• Closely monitor performance

On Thursday, September 26th, 2002 we ran a 24 Hour, ½ price sale in appreciation for our regular customers as well as enticing new customers to start a subscription

One week prior to the sale, we ran teaser ads with a countdown of hours to go, plus there was pre-promotion on radio leading up to, and on the day of the sale.

24 Hour, ½ Price Sale

24 Hour, ½ Price Sale

• On the Saturday prior, and in the Wednesday London This Week paper, we also ran a full page ad which listed the actual prices of this sale and stated that it started next Thursday.

• There was interest from that point on, so much so that on the day of the sale we were overwhelmed by over 6,600 callers. It shut down our phone lines as we did not anticipate such high response.

24 Hour, ½ Price Sale … Results?

• We generated 990 NEW 7 day customers, with the majority taking advantage of the 26 and 52 week terms.

• 1,123 customers changed their frequency from 1,2,3,5 or 6 day subscriptions to 7 days.

• An additional 4,534 regular customers extended their existing subscription by either 26 or 52 weeks.

September 2002 to June 2003

Home Delivery trend September 2002 to June 2003 Total Circulation Trend

86000

87000

88000

89000

90000

91000

92000

93000

94000

95000

p9 p10 p11 p12 p1 p2 p3 p4 p5 p6

Circulat ion Linear (Circulat ion)

For e c a st e d t r e nd f or ne x t 6 pe r i ods

Selling new 26/52 weeks at 50% off and

step up to 33% off on renewal.

Temporarily stopped 26/52 at 1/2

price & reverted to 11/13


Retention Curves of starts from Sept. ’02

to Aug. ’03 retained 16 weeks out

84.9% 26 Week Subs (50% Discount)

Retention Curves

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total

Sub

scrip

tions W

1W

2W

3W

4W

5W

6W

7W

8W

9W

10W

11W

12W

13W

14W

15W

16

Intervals

Pe

rce

nt

Ac

tiv

e

#52

#78

85.3% 52 Week Subs (50% Discount)

Source: ABC Audit Report; Circ is LFP data

Revenue implications

• HD: 2001 Revenue: –1.0%

6 day HD Volume: 79,101 -4% vs. 2000

• HD: 2002 Revenue: –2.5%

6 day HD Volume: 77,605 -2% vs. 2001

• HD: 2003 Revenue: –2.0%

6 day HD Volume: 80,782 +4% vs. 2002

Revenue implications

Variance to 2001

• Jan. to Sept. 2002 (13 week offers)

Average Revenue Decline 3%/month

• Oct. to Dec. 2002 (26 & 52 wk ½ price offers) Average Revenue Decline 1.5%/month

• There was a significant improvement in the revenue decline when the volume of orders picked up with the ½ price long term offers in September ‟02.

Total Average 6 Day (Mon-Sat)


119,585116,907115,342114,761112,614108,755

106,120106,011104,698102,961 98,19294,371 95,966

0

20,000

40,000

60,000

80,000

100,000

120,000

1991 1993 1995 1997 1999 2001 2003Source: ABC Audit Report 2002-03 circ is LFP data

Home Delivery Average 6 Day (Mon to Sat)


91,388

89,199 88,405 88,80088,257

85,231 84,029 83,962 84,353

82,972

79,101

77,605

80,782

70,000

75,000

80,000

85,000

90,000

95,000

1991 1993 1995 1997 1999 2001 2003

Telemarketing discontinued Aug. „00


Retention Tactics

Retention Tactics:

• Welcome Programs

• Discounting with Tiered Pricing

• Win-Back Programs

• Loyalty Programs

Case Study:

The Globe and Mail: Subscriber Recognition

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

• Subscription Price $315 per year

• Most subscribers pay full or slightly discount rates

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

Circulation Strategy

• Growth of greater than 50% paid subscriber base.

• Improve retention

• Improve communication capabilities.

• Maintain high demographic profile of the audience.

Globe Loyalty History

• The Globe tested subscriber response to value added programs in 2003 and early 2004.

• Direct Mail programs offering subscribers discounts to one-off events have been very well received.

• “Random acts of Kindness” have shown significant retention improvement.

• Given this success, a new subscriber Recognition program has been developed and launched.

Previous Program Examples

• The Lion King: March, 2003

• The Producers: March, 2004

The Program Details

• A mailing sent from the Globe to Toronto area subs with a Lion King ticket offer.

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

• The advertiser paid all costs of the program execution.

Subscriber Benefits

• 25% percent off Lion King tickets

• Special “Globe and Mail Night” for 500 subscribers as special guests.

• Perceived as a value add to their subscription

Results

• Orders: 1,440 Seats: 4,153

• The advertisers realized an ROI of six times their investment.

• Excellent response from the subscriber base.

Subscriber Results

• All respondent data (who bought tickets)was captured for tracking.

• Retention is 25% better amongst those who bought tickets versus the control group.

• Retention is 9 times better with the Lion King special night guests than the control group.

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

The Producers

• The Lion King program was repeated with an enhanced offer, this time for The Producers.

• Results were again successful for both the advertiser and The Globe.

• All data was again captured.

The Globe and Mail Subscriber Recognition Program

• Advertisers want access to the subscriber base.

• The newspaper rarely communicated with subs due to high EZ-Pay and no carrier collect.

• Collection and use of accurate email addresses is essential moving forward.

• Subscriber and website registration initiatives are moving forward.

The Globe and Mail Subscriber Recognition Program

• The program rewards the most loyal and valuable subscribers by offering them exclusive offers to superior retail discounts and special opportunities

delivered to them by The Globe and Mail.

• It allows a select group of our advertising clients to extend their marketing messaging in the form of unique, high valued offers to the cream of the subscriber base.

How the Program Works: • Registration with a Username and password

is required.

• No points are collected or redeemed.

• All five and six-day subscribers receive a Globe Recognition Card. (Currently Ontario)

• All offers are found on the Globe Recognition website. (Two tiered).

• There are exclusive Globe Subscriber offers as well as thousands of additional offers around the world.

Subscriber Login page

Exclusive Offers

“Exclusive” Subscriber “Savings”

Launch Events • Downtown Toronto was targeted with two weeks of

promotional activity.

• Media included: Radio

Out of home

In-paper

Magazines

Commuter Trains

• Registering the card made subscribers eligible for several prizes including:

2004 Volkswagen Passat

$5,000 in Taylor Made Golf Equipment

Vacation Packages

Preliminary Results

• The Program was launched in June 2004

• The number of registered card users has significantly surpassed the original expectations.

• Selected advertising clients have readily participated as merchants with exclusive offers.

• Data collection will assist in evaluating the program and provide direction for future uses of the program.

• A critical threshold of registrants is available to facilitate communication with the newspapers most valued subscribers.

Next Steps

• Review Research

• Establish Subscriber Preferences

• Maintain and expand offer selections

• Regularly communicate offers and benefits to subscribers.

• Explore additional advertiser leveraging.

• Measure impact on retention versus control group over time.

Questions?

Thank You!

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