By: Jennifer Saba
Circulation may be taking the Nestea plunge, but there is some good news in the tea leaves. Churn ? or the percent of subscriber turnover ? is falling at newspapers across the country. That’s crucial, because if newspapers can’t add readers, they need to at least hang onto the ones they have.
John Murray, vice president of circulation at the Newspaper Association of America, did a back-of-envelope calculation from the March 2007 FAS-FAX and found that stops are down and retention is up. “They are selling fewer orders, but when they sell them they are making sure they count,” he says.
There are a number of factors in this, explains Jeff Walsh, director of audit compliance at ValueMags: “A lot of newspapers right now are cutting off high-risk channels, like door crews, telemarketers ? high-pressure sales that have a high turn rate. The ABC scandals over the last couple of years showed that those channels could be manipulated more easily.”
Automatic credit or debit card payments via EZPay is another way of keeping hold of subscribers. Gyms, magazines, and cable companies have been using this method of payment to great effect for years.
Mark Henschen, circulation director at the North County Times in Escondido, Calif., swears by it. When he first arrived at the paper 11 years ago, churn was at 134%. “That level is horrible,” he says. “The only way I can describe it is running uphill at a 90-degree angle. You are never going to get up, but your legs are churning like mad.”
He decided then and there the paper was going to start using EZPay aggressively, and now churn has been reduced to about 49%. An impressive 72% of his home subscribers use the payment system.
Henschen enticed readers by offering deep discounts exclusively for EZPay users. After several months, subscription rates go up. Most subscribers stop paying attention after a six-month period, and that’s when the cost rises (subscribers are alerted before the change). The paper also took advantage of vacation stops by getting restart dates up front.
The Indianapolis Star cut its churn to under 30% thanks to EZPay and other incentives. “For the last three years we have been concentrating on selling quality orders,” says Vice President of Circulation Bryan Sturgeon. The paper ties EZPay to a quarterly rewards program, in which customers are put in a drawing for the chance to win such prizes as shopping sprees or a trip to Boston to see the Colts play the New England Patriots.
“We made [EZPay] a priority,” says Sturgeon. “We promote it in outbound sales, inbound customer service, and direct mail.” Since 2003, the paper has increased the number of subscribers on EZPay by 233%, to 111,878.
Dan Schaub, senior vice president of circulation at The Sacramento (Calif.) Bee ? which in two years has cut its churn from 64% to 46% ? suggests that “putting our money where our mouth is” helped tremendously. Over the last two years, the paper shifted 20% of its circulation budget from the acquisition side to the retention side.
The paper doesn’t try to convert all of its subscribers to EZPay, but instead targets customers who are a bit behind in their payments rather than those who mail out checks every month like clockwork. Schaub also attributes the Bee’s low churn to its popular reader-rewards program.
And get this: Previously, the Bee didn’t track down subscribers who failed to pay. Now, Schaub says, “if you don’t pay, we find you. It’s just like any other bill.”