Introduction

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." Charles Darwin

This Guide is for circulation executives and publishers at newspapers of all sizes across North America. Its purpose is to present state of the art Strategic Selling with respect to subscriptions. Strategic Selling means focusing on the most profitable prospects, giving them a valuable offer, and retaining them as subscribers for the longer term. The topic is timely because of the restrictions placed on telemarketing in recent years. Telemarketing's power had been declining long before the do-not-call regulations. But the advent of these restrictions may prove to be a pivotal moment in the history of newspaper sales – the moment when newspapers shift from one-dimensional dependence on telemarketing to a more sophisticated, strategic array of sales strategies.  The results, as some newspapers have discovered, can include more profitable, sustainable circulation.

In this introductory chapter:

"By the Numbers" Charts and Data on telemarketing and retention

History of newspaper sales
What we can learn from the geese
The cyclical nature of newspaper sales channels
Re-examining sales for the new era in restricted telemarketing

A just-for-fun quiz

The Guide is the result of months of research, collaboration and data collection from newspapers representing all types. Our entire industry owes a debt of gratitude to the professionals who contributed their time, talent and case studies to help expand the body of knowledge at a time when knowledge is the most important asset we have.

No matter what size newspaper you manage, or how much experience you have, we think you’ll find fresh insights in this Guide. Use it to structure your sales channels for sustainable subscriber growth in the era of restricted telemarketing. Whether your system needs a major overhaul or just subtle calibration, we think you’ll benefit from the time you spend with this Guide.

First, let’s put today’s challenges in perspective with a look at the Big Picture.

History of newspaper sales

Need help with compliance? To learn more about telemarketing compliance, refer to the NAA Telemarketing Compliance Guide

As today’s newspaper circulation executives confront the realities of a changing sales environment, they can take strong comfort in this fact: Newspapers have survived and thrived through centuries of tumult and volatility. One of the latest challenges is the need to diversify the sales channels used to sell subscriptions. Telemarketing has been a primary means of selling subscriptions. But more than a decade ago, technology like caller ID began to reduce its effectiveness. Many people came to rely on cell phones exclusively, and are unreachable through random dialing. Consumers long ago began screening their calls with answering machines, essentially removing themselves from the pool of prospects. More recently, the federal government and many states placed restrictions on outbound telemarketing. The new restrictions followed years of rising costs and declining long-term returns on sales from the telemarketing channel.

Despite changes in the regulatory environment, newspapers have adapted quickly. In part because of the public’s insatiable desire for news on the printed page, and in part because newspapers have always been some of the most entrepreneurial enterprises, newspapers today are the dominant news medium in many American cities. Newspapers still drive the news agenda of other media. And newspapers continue to generate handsome profits for publishers.

A look back

Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter." Thomas Jefferson

The history of newspapers goes back at least five centuries. In Renaissance Europe, handwritten bulletins circulated among merchants, spreading the word about economic conditions, social affairs, wars and even features. The first printed newspapers appeared in Germany, where Johannes Gutenberg invented the printing press with moveable type.

In the United States the first newspaper appeared in Boston in 1690, entitled Publick Occurrences. Published without authority, it was immediately suppressed, its publisher arrested, and all copies were destroyed. The first successfulnewspaper was the Boston News-Letter, begun in 1704. By the eve of the Revolutionary War, two dozen papers were issued within the colonies.

In the early 1800s, advances in technology led to an explosion of newspaper growth and the emergence of the "Penny Press." It was now possible to produce a newspaper that could be sold for just a cent a copy. Newspapers were now available and affordable to the masses.

The industrial revolution dramatically affected newspapers. Both the numbers of papers and their paid circulations continued to rise. An astounding 11,314 different papers were recorded in the 1880 census. This is also the first age of media consolidation, as many independent newspapers were swallowed up into powerful chains. By the 1910's, all the essential features of the modern newspaper had emerged.

For much of the 20^th century, newspapers were on virtually every doorstep because they were the primary source for news and information. Eventually the newspaper market confronted competition from the advent of other channels of communication such as radio and then TV; but still newspapers had a large share of the market, and few publishers had to actively go out and sell the newspaper. The readership habit was developed by the family.  When children grew up and moved into their own homes, a new delivery was made to the new home. At mid-century, the newspaper industry was flourishing. Television was in its infancy and radio had made little headway into the newspaper market.

As TVs became more prevalent in the homes across America, this newer medium began dominating the populace’s time. Although newspapers were losing a portion of their market, there was little to fear. Newspapers were still going to the majority of homes in 1970. What newspaper publishers didn’t realize was that the time spent with the newspaper was slowly being replaced. Even though newspapers were being delivered to the homes, less time was being spent with the newspaper. Newspapers began losing market share, and the publishers didn’t immediately realize what was happening. People were no longer calling to voluntarily start the newspaper service.

In the late 1970s, newspapers began to react. Newspapers began aggressively marketing their “product” using newspaper carriers and door-to-door solicitors. This transformed later into door-to-door sales crews and phone-room operations that eventually led to telemarketing call centers.  While door-to-door sales crews were effective, they were also costly.  In the early 1980s, telemarketing began taking over market share in terms of how newspapers would attract subscribers.  Crew sales, telemarketing, district managers, carriers and volunteer starts were the prevalent circulation acquisition channels. 

As we fast forward into the 21st century, circulation has shrunk, and the number of newspapers has been reduced, despite continued growth in the population. As the fight for circulation has intensified, circulation executives have added to their toolkits. Sales channels have expanded to include the traditional methods mentioned above but also direct mail, e-mail, Internet marketing, newspaper inserts, personal “intercept” selling, third-party paid programs, new-mover campaigns, self-promotion in the Sunday edition, and others. Newspapers have been creative in their efforts to get the newspaper inside the home to readers. Today, newspapers that became dependent on telemarketing are confronting restrictions and regulations that limit their calling lists. Innovation that has been the hallmark of newspaper sales for centuries is more important now than ever. Newspapers on the leading edge have pioneered new models of more strategic selling, by structuring their sales channels for subscriber growth in the era of restricted telemarketing. Telemarketing continues as an important tool, but it is used more strategically, to attract higher-value customers and circulation that sticks. It is also used as just one asset in a broad portfolio of sales tactics.

Do your due diligence! Before undertaing any ideas published in this Guide, each newspaper must do its own due diligence with respect to ABC and DNC compliance. Do not assume that simply because an idea is included in this Guide that it meets compliance requirements. Regulations are subject to constant change, and each promotion must be subjected to a vetting process by the newspaper on a case by case basis.

This publication will take you through some of those innovations.  It addresses the changes in telemarketing, such as regulations that restrict our calling lists. Like a star athlete that is getting older, telemarketing can continue to produce valuable results in a more strategic role. While telemarketing had once become the primary means of attracting new customers, it now will be used as just one important part of a more diverse and inter-dependent mix of sales tactics.

• We’ll examine state of the art techniques in applying each of the various sales channels. 

• We’ll explain what each sales channel is, the positives and negatives of the channel, and how you may make effective use of them through planning, strategy and implementation. 

• We’ll discuss the nature of testing various channels, because what works well in one market may not work quite as well in other markets. 

• We’ll discuss the sales channels from a cost-effectiveness point of view, using measures such as cost-per-order (CPO) and the more significant benchmark, cost-per-unit (CPU).

Ø      Naturally, we’ll also provide relevant examples that are designed to show you what you can do with your resources

Throughout the Guide, we’ll look at the role of retention in the mix. We’ll shed light on things you can do to improve
your chances of retaining customers:

• Selecting the right mix of sales sources.

• Using payment methods as a retention lever.

• Communicating with customers with retention as the goal.

• Enhancing verification calls.

Reducing subscriber attrition is nothing new – but it has begun receiving more attention as subscriber acquisition costs have soared.

Finally, we’ll try to deliver this information in a useful, engaging way. This publication was produced by your peers – a group of some of the top circulation talent in the land. Each chapter of this Guide begins with a strategic overview and then provides numerous case studies, success stories, and lessons learned by newspapers from coast to coast across North America. Our hope is that whether you are a novice circulation manager at a small paper or a veteran VP at a major metro, you’ll gain new insights and useful perspectives to help you mix up your sales channels for maximum growth and retention.

Before moving on, click here and let’s take a moment to see what we can learn from the geese.

The cyclical nature of sales channels

Some of the great mistakes in military history are the result of great generals “fighting the last war.” They repeat strategies and maneuvers that won them great victories in past battles, even if their current conditions have changed dramatically.

Similarly, sales managers who stick to tactics that worked once upon a time, are destined to fall behind. Back in the 1970s and 1980s, for example, with a youthful carrier force, door-to-door sales were prevalent. Telemarketing later became the darling of acquisition sources; after all, you could talk to five people over the phone in the time that it took to knock on one door. Weather was not a factor. And the technological “arms race” continued, giving us predictive dialers and multiple stations with one supervisor. Callers could use a script and overcome objections at the touch of a button in a boiler room in another state. Indeed, the appeal of telemarketing was clear. 

After time, however, the dark side of telemarketing became apparent. Newspapers became more like every other type of company using telemarketing, from vacation time shares to aluminum siding sales specialists, telephone companies to credit-card companies.  Everyone was using the same weapon to sell just about everything to everybody.  The average person received over 300 telemarketing sales calls per year.  Something had to happen. Governments stepped in and put restrictions on telemarketers and their technology.  Politicians introduced the Do Not Call list, restricting the role of telemarketing for must of us. The elected leaders created a few exemptions – most notably, for themselves. Politicians are still using telemarketing to its utmost potential. For the rest of us, the battlefield has fundamentally changed. The question for the generals in our circulation departments becomes a classic strategic dilemma: Do we hang on to the tactics that yielded victories in the past? Do we fight the last war, or the next one? For more information see the NAA Telemarketing Compliance Guide.

Re-examining the way we acquire customers

As selling over the telephone has become more restricted, less effective and more costly, some newspapers are returning to crew sales using young adults and in some cases senior citizens.  Other channels that are gaining market share include “intercept sales,” where a representative creates a sales encounter in a public place like a store. This tactic is less obtrusive than someone calling or coming to your door.  In most instances, the consumer is out in public and looking to make a purchase. Direct mail has gained some share as well. Unfortunately much of this activity is a reaction, not a strategy or a solution.

What’s the difference between a reaction and a strategy? It’s like the difference between two games: “Rock, Paper, Scissors,” and chess. The first game is reactionary -- based entirely on luck. You are statistically just as likely to lose as you are to win -- the best odds you can hope for are 50-50. On the other hand, chess is a game of strategy, based entirely on the execution of your own plan. The quality of your thinking determines the odds of your success. You put your brainpower to work to craft a plan, analyze the environment, assess the competition, choose your maneuvers, adjust to changing conditions, and arrive at an outcome. You use an entire array of pieces -- all of which offer different roles, and each interdependent on the others. Luck has nothing to do with it -- you are in complete control of your own fate.

In the chess game that we call Strategic Selling, you have many pieces at your disposal in the form of sales channels. Just as with chess pieces, these channels have different functions in your plan, and they all can work together more effectively, or less so, depending on the quality of your planning and analysis.

Strategic planning will answer some fundamental questions:

• Am I doing all I can to increase circulation? Am I leaving any opportunities on the table?

• Am I taking advantage of all the different sales channels that make sense for our paper?

• Am I using them in the right proportions? Do I have a balanced allocation of sales sources?

• Am I measuring the right things? Do I know what works, and the relative value of different types of orders? Do I measure the cost of acquiring an annualized unit of circulation as well as the cost of acquiring an order?

• Am I looking externally to see what’s working elsewhere that might also work here?

• Am I targeting the right prospects – the ones mostly likely to pay a fair price and stay more than a few weeks?

• Am I offering a variety of subscription terms, offers, payment plans, price points and packages to appeal to the best prospects?

• Are my sales sources aligned so that they create synergy? For example, does my direct mail support the more limited-but-strategic telemarketing function?

With that backdrop, let’s look at an Executive Summary of what’s ahead in this Guide.

Before moving on, though, take this Challenge Quiz on the contents of the introduction you just read.

1. The advent of radio immediately caused newspaper circulation to drop dramatically.

                                                True    False (answer = false)

2. The effect of TV on newspaper sales took time to become apparent, as people spent more time watching TV even as newspaper deliveries continued to be strong.

                                                True   False (answer = false)

3. Newspapers have successfully confronted challenges from emerging technologies and changes in market environments for many centuries.

                                                True   False (answer = false)

4. Restrictions on telemarketing mean telemarketing will soon be of no use as a sales channel.

                                                 True   False (answer = false)


Contact: Steve Cebalt, Bottom Line