Manage the grace period

The Goal

The objective of the Mail Tribune, located in Medford, Ore.(32,500; 33,125) was to reduce the number of subscribers lost due to non-payment and increase subscriber retention.

The Story

“Each week we produced a list of subscribers who were in the second week of a 25 day grace period.  We held nightly call sessions with existing customer service reps.  The subscriber’s records were on display and the rep was authorized to offer additional discounts or frequency of delivery changes to save a subscriber.  The reps accepted credit cards and check by phone payments.  If the customer stated that they had already sent their payment in, days were added to the existing subscription to keep it going until the payment was posted.  This satisfied long term subscribers who could not understand why the account had been stopped after subscribing for many years,” said Circulation Director Michael Miller.

One obstacle that The Mail Tribune had to overcome was at first some subscribers were reluctant to give payment information over the phone.

The success of the promotion was determined by measuring churn and renewal rates.

The results are as follows:  Non-pay stops were reduced by 40 percent, renewals increased by 3 percent monthly, and churn dropped by 6 percent.

The Moral of the Story

“Non-payment” is often a symptom of a complex billing system. Make it easier and more convenient for customers to pay, and watch retention improve.

The art of "Just-in-Time" Selling

The Goal

The objective of the Star Tribune, located in Minneapolis, Minn. (380,354; 677,929) was to create a new EZ Pay rate that would give the consumer a convenient monthly billing amount, strengthen the newspaper habit and increase newspaper revenue.

The Story

“Our telemarketing department has a program called, ‘Just In Time’ calling that aims at people who are in grace and are just about to be stopped for non-payment. The call has two goals. One is to clear up their existing balance-typically $12.87 for 13 weeks. The second is to put them on a more affordable monthly billing plan-$6.25 for 5 weeks auto-renew. This offer will renew up to 10 times (1 year) before it changes to our regular rate,” said Retention Manager Dave Terwilliger.

The main obstacles for the Star Tribune were training, timing and resources. It was a must to train the telemarketing staff to collect payment, talk about the benefits of monthly billing and let the customer know that the offer is good for renewal up to one year. The paper also had to make sure that the list was called and money was transferred into the appropriate account in a timely manner.

The success of the promotion was determined by whether or not the share of EZ Pay customers raised in the 5 week term.

The program resulted in an increase of 23 percent in the 5 week term. 

The Moral of the Story

Reaching customers whose subscriptions are about ready to expire is a good way to keep those customers as subscribers for up to a year.