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ROUNDTABLE ON STRATEGIC MARKETING Retention Case Studies August 25, 2003

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  • 1. ROUNDTABLE ON STRATEGIC MARKETINGRetention Case Studies August 25, 2003
  • 2. Overview Retention versus Acquisition What is included in Retention Marketing? Case Studies The Hamilton Spectator The London Free Press Pacific Newspaper Group (Vancouver Sun & Province) The Globe and Mail Recommendations
  • 3. Retention vs. Acquisition Weve all heard how its much easier to keep a customer than to get a new one. But when circulation numbers are under pressure, we generally turn up the heat on acquisition. The demands of month to month circulation targets keep the focus short-term instead of long-term. Retention marketing takes time to implement.
  • 4. What is included inRetention Marketing? Reader Contests? Enhanced Customer Service? Welcome Letters? Surveys? Subscriber Reward Programs? Value added incentives?
  • 5. Case Studies
  • 6. The Hamilton Spectator
  • 7. The Hamilton Spectator 100,000 Circulation Canadas ninth largest market Owned by TorStar The subscriber base demographically reflects the market Faced with declining circulation trends Annual churn rate is close to 100%
  • 8. The Hamilton SpectatorPast Retention Efforts Reader Contests (Bingo, Grocery Give-Away etc.) Open to everyone Intended as a reason to buy the paper Generates a low unique player database Most players are already subscribers The Spec Club Card Over 100 local retailers provided offers to subscribers Difficult to maintain fresh high value offers Operated internally and offers acquired by ad sales reps
  • 9. The Hamilton SpectatorReader Rewards Valuable discounts and offers for Spectator readers Regularly featured as in-paper coupons Approximately 20 per year Locally sourced through Promotions
  • 10. The Hamilton SpectatorRevised Reader Rewards Valuable discounts and offers for Spectator subscribers only Membership has its privileges Regularly featured as page ads Subscribers must go to the Spectator to take advantage of the offer. Offers are the best discount available
  • 11. The London Free Press
  • 12. The London Free Press 80,000 Circulation Affluent, well educated white collar market Owned by SunMedia The subscriber base demographically reflects the market Faced with declining circulation trends of up to 4% annually until 12 months ago
  • 13. The London Free PressRevised Acquisition and Renewal Strategy Formerly they sold 8, 11 and 13 week orders at a slight discount of 5% Now they only sell 26 and 52 week subscriptions, but at 50% off On renewal, the step-up offer is 33% off, again for 26 or 52 weeks only.
  • 14. The London Free Press Results Circulation has grown 2.4% over the past 12 months since implementation All former short-term subscribers are being targeted for conversion Close rates with this segment have been good at 11%.
  • 15. The London Free Press Next Steps Maintain a disciplined approach with the long-term step up offer tactics Understand the real impact on circulation volume and revenue Acquire the necessary tools for measurement (R-Logic is on order)
  • 16. The Vancouver Sun
  • 17. The Vancouver Sun 160,000 Circulation One of Canadas largest and most diverse markets Owned by CanWest CanWest owns the other major daily The Vancouver Sun and several weeklies effectively dominating the market
  • 18. The Vancouver Sun The paper has determined that acquisition alone cannot keep pace with circulation declines. They believe that mathematically they cannot acquire fast enough to offset churn. Most sales were with a 50% discount.
  • 19. The Vancouver Sun The newspaper made a conscious decision to address retention. Subscribers who stopped are not restarted at 50% off for at least 2 months. As part of a larger customer focused program, a loyalty component was developed.
  • 20. The Vancouver Sun The loyalty program includes: Welcome Call Welcome Letter Subscriber Survey Executive Call-Backs Random acts of kindness
  • 21. The Vancouver Sun They have tracked all individuals touch by the loyalty program (1,500 to 2,000 per year). Recent measurement has shown 12% better retention with this group than overall levels of two year plus subscribers. They have established a benchmark level of attrition based on uncontrollable subscriber loses such as death, moving out of the market etc. They believe the group touched by the loyalty program (now 4,000+) is retained as close to this benchmark as possible.
  • 22. The Globe and Mail
  • 23. The Globe and Mail Canadas National Newspaper 1,000,000 readers per day Circulation 350,000 daily Home delivery 200,000 80% EZ-Pay 94% Full Price Home Delivery Subs Subscription Price $312 per year
  • 24. The Globe and Mail Highly educated, affluent audience Managers, Owners, Professionals etc. White collar males make up a large component of the subscriber base Delivered in every major market in Canada Majority ownership is Bell Canada Enterprises
  • 25. Loyalty Issues Subscribers pay a $312/year no discounts The newspaper rarely communicates with them due to the fact that most are EZ Pay. There is considerable data about subscriber interests and hot buttons at a macro level. More detailed information is being collected at an individual level. A test of the impact of providing relevant value adds to subscriptions was necessary.
  • 26. Advertiser Opportunities There is no direct mail currently being sent on behalf advertisers The subscriber list is not rented, but advertisers want to access it. The subscriber base is difficult to reach by traditional marketing channels.
  • 27. The Landscape The biggest theatre advertiser needed to boost Lion King ticket sales The contract with this advertiser was being negotiated during this timeframe Globe and Mail subscribers have a clear affinity to the theatre. It is a very competitive market, nationally and more specifically in Toronto. The paper just had a 4% home delivery price increase
  • 28. The Program Details A mailing sent from the Globe with a Lion King ticket offer reaching Toronto area subscribers providing access to a very desirable but previously inaccessible list. This value-added service should help secure the advertising contract. The advertiser was part of positive offer and message to the subscriber base, helping with their brand image. The advertiser paid all costs (approx. $50,000)
  • 29. What We Did Extracted All Subscriber records through AnalytiX Removed businesses Targeted the Geographic trade area for the client Established a campaign for the project Track results
  • 30. Subscriber Benefits 25% percent off Lion King tickets Special Globe and Mail Night for 500 subscribers as special guests ($50,000 value) Front of the Line privileges for an upcoming production. Perceived as a value add to their subscription
  • 31. Advertiser Results Orders: 1,440 Seats: 4,153 Close to $300,000 in seats were sold. That is an ROI of six times their investment. Excellent response from the subscriber base. The advertiser signed a 2 year contract.
  • 32. Subscriber Results All respondent data (who bought tickets)was provided by the advertiser and loaded into AnalytiX for tracking. Of those who took the Lion King offer, 6% have stopped versus 8% in the control group. Retention is 9 times better with the Lion King special night guests than the control group. (1% versus 9%). Many subscribers took the time to write letters and emails thanking the newspaper.
  • 33. Next Steps There are other advertisers interested in duplicating the program. Considering 4 - 6 similar mailings per year. (golf, travel, theatre, dining) Further development and segmentation of the database is essential as well as continued campaign management. A formal retention program is planned for 2004
  • 34. Recommendations Consider the Membership has its Privileges approach for full-week subscribers Establish benchmarks by channel for: Churn Retention Cost per Order Cost per annual unit of circulation Annual Uncontrollable Attrition
  • 35. Recommendations Know who you want to keep Some prospects are not worth signing up and theyre way too expensive to retain Segment and profile your subscribers based on retention and learn all you can about each group. Establish clear, measurable objectives
  • 36. Recommendations Calculate the value of a Retention Program Reduced acquisition and renewal expenses Advertiser value and leverage (ie: Lion King) Test a program that matches your newspapers key business objectives Get the right tools resources and training to accurately and effectively manage retention.
  • 37. THANK YOU!