FEATURE 

At Home with the Norwich Evening News

After much research, the Evening News decided that a greatly strengthened direct home delivery service was the answer to its circulation prayers. That was the easy bit. The tricky part was working out how to re-energise direct delivery when they had no direct control over it. Philip Preston explains their strategy.

By Philip Preston

How many evening newspapers are likely to post a year on year increase in the latest round of ABC results? OK, let’s have a show of hands.

It’s fairly easy to forecast the response, as the results from previous ABC periods suggest it will be difficult to spot many with their hands up. The Norwich Evening News will not be among them unfortunately, even though our rate of decline has slowed over the past six months.

However, I will make a prediction that among the best performers will be the Colchester Evening Gazette and the Southend Evening Echo. There are two factors driving their success, which we would love to replicate.

First, despite being Division One relegation candidates at the start of the season, both Southend United and Colchester United were promoted to the Championship as champions and runners up respectively. There is nothing like a winning team to sell a few extra copies.

I wish them both luck for the coming season as, having experienced the highs and lows of promotion with Norwich City – both in circulation terms and as a frustrated supporter, I know how difficult it might be to repeat their sales success.

Unfortunately, I cannot justify going to the Archant board to ask for £3 million to sponsor NCFC so they can buy a new Dean Ashton (or even a new manager), so we’ll just have to hope the rest of the teams in the Championship underachieve, leaving the Canaries in the play-off zone by default. Losing the play-off final at Wembley a few years in a row would be pretty good for sales.

Home games

However, the second success factor both Colchester and Southend have up their sleeve shows more long-term promise. I’m talking, of course, about direct home delivery.

Although not all evening newspapers run their own direct home delivery operation, our research has shown that the more successful publishers do.

Similar to other evening newspapers throughout the land, one of the major issues facing the Norwich Evening News is the gradual withdrawal of a home delivery service by a small but increasing number of newsagents. In addition, in some areas, delivery charges have increased much faster than RPI and some of our more price-sensitive regular readers are being forced out of the market.

These factors, together with the growth in the number of convenience stores and supermarkets that sell newspapers, have eroded the proportion of total sale that’s now home delivered.

Starting from scratch

The Norwich Evening News does not have any direct control of the home delivered copy. We rely totally on agents to look after our customers – some do an excellent job, but others regard home delivery as an expensive but necessary evil.

Over the past 12 months, we have invested a considerable marketing spend in canvassing activity, generating over 2,000 new 6-day home delivered orders spread over 40 or so newsagents. We know the average uplift per customer per week is 4.4 copies, so potentially by now we should see 1,400 copies per day added to the base sale.

However, the level of orders placed with agents that lapse, particularly between 13 and 26 weeks, is unacceptable – conversely it is said that evening newspapers that allocate canvassed orders to their own direct home delivery operation improve their retention rates by 50%. Well we’d like some of that.

It is our firm view that launching direct home delivery is essential if we are to stabilise further the sales of the Norwich Evening News and extend the profitable life of the title. In addition, direct home delivery would enable us to move our business into the twenty first century by building a customer database with fantastic opportunities for up-selling, cross-selling and new product development.

Our primary objective is to launch a direct delivery service for the Norwich Evening News in September 2006. By the year-end we aim to have around 1,000 DD customers, rising to between 4,000 and 4,500 by the end of 2008.

We estimate that if we are able to secure 15% to 20% of sale through our own direct home delivery operation then, in three years, the circulation performance of the Norwich Evening News will be 7% better than the current trend.

Redesigning the wheel

As part of the planning process, we have had a look at what a number of evening newspapers around the country are doing – why try to reinvent the wheel? We also bounced a few ideas around with Russell Borthwick from marketing consultancy Press Ahead, and his help and advice has been invaluable.

It quickly became obvious that direct home delivery is not for the faint hearted nor is it a way to make money.

However, because we are starting from scratch, we are in a position to adopt best practice from day one. So we have made some fundamental decisions about the service we want to offer consumers:

* Branding: without trying to be too clever, we want a strong brand for the service. So we are calling it At Home.
* Deliver at lunchtime: we now only publish one timed edition of the Norwich Evening News, which, on a good day, is printed at 10.30am. Our ambition is to have all copies of the paper delivered to At Home customers by 2.00pm. There are an increasing number of people at home over the lunch period - part-time and home workers, mums with small children, pensioners – so they will have more time to read their paper. One of the most often sited reasons for a cancellation is "no time to read", which is short for "I’m too busy during the evening to find time to read my paper every day", so extending the shelf life of the title will improve customer retention. We hope.
* Adult deliverers: because we want to deliver over the lunchtime period we have to employ adults. More expensive than employing children, but we believe this will offer customers a more reliable service, again improving retention. We hope.
* No cash collection: one of the biggest headaches for evening newspapers running their own home delivery operation is the door to door collection of cash. So we don’t want to do it. At Home customers will be able to pay a 4-weekly invoice by cheque, credit card or debit card either by post, phone or through a dedicated web site. Alternatively, they can pay by monthly direct debit. Whereas invoiced customers will have to pay a 10p delivery charge per day, customers on direct debit will have free delivery.

Our business model is based on 40% of customers opting for the direct debit payment method. If we have 100% of At Home customers on direct debit, the improvement in retention rates should offset the loss of any delivery charge income. We hope.

We have identified areas in and around Norwich where there is no home delivery service or where the service being provided by an incumbent newsagent is either sub-standard or very expensive (or both in the case of a few individual stores). We will either canvass in those areas or buy rounds if the price is right.

Trade reaction

At Archant Norfolk, we pride ourselves on the excellent trade relations we have with local independent newsagents and roundsmen. However, we could have faced stiff opposition from the retail trade to our plans, so we devised a communication strategy designed to head them off at the pass.

Actually we did a bit more than that. The first step was to review our variable discount scheme and increase terms to 27.5% for our Premier newsagents (essentially the better home delivery agents that make up about 20% of all trade customers). This is significantly better than the terms offered by national titles, and clearly demonstrates our commitment to home delivery newsagents. We also announced a freeze on carriage charges for the third year in a row, another move warmly greeted by the trade.

We then held a series of meetings with a number of key newsagents, the IDEAL buying group and the NFRN and made a commitment that we would not launch our At Home direct delivery service in areas covered by Premier agents. That still gives us plenty to go for.

We are still keen to work with Premier agents to help them grow their home delivery rounds, and have committed to spend marketing and canvassing budgets on trade campaigns.

We have also set up a ‘Home Delivery Think Tank’, involving half a dozen of the best newsagents, to brainstorm ideas, particularly focusing on customer retention. The first meeting of the think tank was held in March and was a great success.

We have also now published two issues of a quarterly newsletter, which is sent to all trade customers. Again the response has been very positive – all in all, we can’t be accused of keeping them in the dark.

Hardware, software and people

We have a plan, a budget (signed off after answering many probing questions from the board), a dedicated Home Delivery unit within the newspaper sales and marketing team and the retail trade on our side – or at least they are not baying for our blood. So now all we have to do is do it!

We have selected an off-the-shelf direct delivery and database-marketing system, which will not only handle the nuts and bolts of home delivery, but also has the capability to meet our longer-term needs to cross-sell other Archant products and services to At Home customers.

The hardware is in place, the system installed and Super User training is underway. Once we have sorted out the software interfaces with our accounting and distribution systems, we will be ready to rock and roll.

We will then only need to promote the service in the geographical areas selected, generate viable numbers of home delivered customers in each area, employ the home delivery teams, sort out the logistics and print the papers on time and everything will fall neatly into place!

Actually, we are not that naïve, but whatever problems we may encounter we will have to overcome them, because we can’t see a better opportunity to improve the sales performance of the Norwich Evening News or build a customer database that will generate new revenue streams for the future.