roundtable 2003 hay
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ROUNDTABLE ON STRATEGIC MARKETING
Retention Case Studies
August 25, 2003
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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
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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.
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What is included in Retention Marketing?
Reader Contests?
Enhanced Customer Service?
Welcome Letters?
Surveys?
Subscriber Reward Programs?
Value added incentives?
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Case Studies
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The Hamilton Spectator
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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%
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The Hamilton Spectator
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
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The Hamilton Spectator
Reader Rewards
Valuable discounts and offers for Spectator readers
Regularly featured as in-paper coupons
Approximately 20 per year
Locally sourced through Promotions
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The Hamilton Spectator
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
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The London Free Press
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The London Free Press
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
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The London Free Press
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.
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The London Free Press
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%.
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The London Free Press
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)
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The Vancouver Sun
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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
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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
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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
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The loyalty program includes:
Welcome Call
Welcome Letter
Subscriber Survey
Executive Call-Backs
Random acts of kindness
The Vancouver Sun
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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
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The Globe and Mail
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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
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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
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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.
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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.
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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
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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)
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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
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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
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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.
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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.
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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
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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”
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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
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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.
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THANK YOU!