Austin American-Statesman Subscriber Long-Term Discount Program

If the price is right, people will pay—and stay. At the Austin American-Statesman, a long-term discount program is being tested at different price points with new subscribers, and so far, the strategy is retaining customers at phenomenal rates.

Most subscribers to the American-Statesman, which charges one of the highest rates in the southwest for a newspaper its size, pay a basic rate of $4.79 for a seven-day subscription. The churn rate is 58 percent to date this year.

Under an experimental long-term discount program, new subscribers were offered a lockin rate of $2 per week, as long as there is no lapse in payment, for a full year. On June 8, the paper sold 412 subscriptions at the low rate, and nearly four months later, 93.4 percent were still taking the paper. “That’s way above normal retention,” says Harry Davis, vice president of circulation for the American-Statesman. “Usually, we’d be lucky after 18 weeks if we had 68 percent. People are okay with the $2 price, and are staying. We’ve tested several thousand lock-in rates over the last two years, and will continue to do it for another year.” Davis said that in the past, the paper tried offering a low initial rate, raising it slightly, then brought subscribers up to the basic rate, which kept some readers, but not most. So the strategy shifted to offering a lock-in rate for the life of the customer. “We’ll probably raise the price to $2.50 a week with the next test group,” Davis says. “If we figured out $2.75 was the key, we’d then need to decide how many we’d want to sell at that rate for the life of their readership. We’re in transition with this, and I want to balance out how much readership we can get for the options.” Subscriptions were sold at a kiosk, with no thought to targeting demographics.

NAA’s recent research confirms that how much a subscriber pays for their subscription has little or no impact on how often they read or how much time they spend with a newspaper on an average day.

Davis says future efforts will probably target specific areas, but he wanted to compare results from the experiment against average sales overall.

“As we move forward, there’ll be that switch to measuring readership, instead of paid circulation,” Davis says. “Today’s marketplace is looking for a deal. People shop around, asking for lower interest rates on credit cards. I’ve had customers call me and say, ‘What are you going to give me?’ “I want to get as much paid circulation as I can, but we need to get the eyeballs on the paper to get the results advertisers want. We just have to balance the revenue stream.”

Note: The study determined subscribers in “deep” discount programs read the paper with similar frequency and spent the same amount of time with the newspapers as the control group of full price subscribers. Nearly half spent over 45 minutes reading. NAA’s Understanding the Value of Newspapers: The Relationship Between Price Paid and Readership. November 2007

First Published:
January 10, 2008