By: M.L. Stein
LEON LEVITT, DIRECTOR of circulation and readership at the Newspaper Association of America, said his organization, through a task force of newspaper representatives, is developing a program to benchmark superior circulation performance.
Speaking at the Cal Western Circulation Managers Association annual meeting, Levitt said the study will include customer service, distribution management, single-copy operations, and subscriber acquisition and retention.
Referring to the latter, he observed, “The question has always been, Is circulation a profit center by itself or an expense to be used in translating additional advertising revenue?
“Well, not only has the game changed, but unfortunately, decisions have often been made without knowing the true cost of subscriber acquisition or the number needed to effect a positive circulation gain.”
NAA has completed tabulation of 600 questionnaires, he said. Although they are not enough for industry projections, preliminary findings suggest that typical subscriber churn is 56% annually and appears to increase with newspaper circulation size, he added.
Smaller papers, according to the survey, had a yearly churn of about 30% while the larger ones measured close to 75%.
Preliminary numbers indicate that obtaining a new “pressure” order costs an average of $10 ? $6.97 for smaller newspapers and $13.33 for metros, Levitt said. A pressure order was defined as solicitation of a new subscriber through various means, including telemarketing, carrier, sales crew and direct mail.
Levitt said the study may show, for example, that a 100,000-circulation paper with a 60% churn rate, compared to a group average of 50%, could reallocate funds into other programs to reduce the percentage, saving $115,000 a year.
Besides the immediate financial impact, an internal analysis “would also provide a tremendous analytical tool when budgeting and planning,” Levitt said. “How many bodies are needed to effect a circulation gain? What will it cost? What will the return in circulation and advertising revenue be on this investment?”
Using 23 different criteria for determining circulation performance, the study, when completed, will allow newspapers to analyze their performance in relation to the industry instead of in a vacuum, the NAA representative pointed out.
Levitt, a former circulation manager at four newspapers, said NAA has developed a starter kit for newspapers wanting to follow the trend of starting frequent-reader clubs. It is working on database-marketing techniques and scheduling more training sessions for circulation managers.