FEATURE 

Building the customer relationship

Newspaper publishers are waking up to the potential of database marketing – and not just for managing subscription programmes. Tony Coad finds that publishers are now using the database to drive everything from editorial content to broadsheet-to-compact conversions.

By Tony Coad

People now want to be involved in their news media, so newspapers are building their rapport with their readers. Managements of daily newspapers – whether national or regional – are increasingly recognising the importance of their relationship with their individual customers and potential customers - and of winning the long-term loyalty of each one. We now often hear circulation managements making statements like …

* ‘If we could get our 3 day a week buyers to buy on one extra day, just imagine the impact on our sale’ .. or ..
* ‘We could more than reverse our sales declines just by getting our home delivered customers to stay with us for 50 weeks instead of 10 weeks, while reducing our marketing costs’

So far, this interest in managing individual relationships has focussed upon acquiring new newspaper buyers and retaining them. So-called customer management strategies have therefore appeared as subscription programmes within the national press – the most substantial and long-lived being operated at the Times and at the Daily Telegraph – or as data-driven canvassing activity in the regional press (such as in the Yorkshire Post, Northampton Chronicle and Sheffield Star).

Culture change

The benefits of building and sustaining individual relationships, however, are now being understood and realised more widely within newspapers. Editorial departments are starting to appreciate the need to move from the ‘top-down’ and ‘one-way’ culture of communication to one that is reciprocal and based upon dialogue. Readers now wish to be involved in the creation and presentation of news. It’s important that we understand how people’s needs are changing and however clever we are at promoting and distributing our newspapers, we would probably all agree that if the product isn’t right, then growing sale will be an uphill task.

It’s the internet that is catalysing this change. In a recent address to the American Society of Newspaper Editors, Rupert Murdoch said that a revolution was taking place in the way young people, in particular, accessed news. "They don’t want to rely on the morning paper for their up-to-date information. They don’t want to rely on a God-like figure from above to tell them what’s important. And … they certainly don’t want news presented as Gospel."

In other words, says Richard Tomkins of the Financial Times, young people don’t want newspapers deciding what is news. For young people, says Tomkins, news is something they get, when they want it, through the internet – not when printed newspapers or broadcasters tell them they can have it. But more important, it is something they want to participate in, not to have handed down to them. Thanks to technology and new media, says Tompkins, "we are entering a world of grassroots or citizen journalism in which anyone with the right handheld device and an internet connection can not only download news from the web whenever they like, but upload it."

In this new world, how are newspapers responding to this demand for inclusion? Let us look at two examples, one from the Business and the other from the Times.

Reader panels shape editorial

Managements in both titles have made the development and maintenance of reader databases a key element of their editorial strategies. In the process of gathering reader data both titles take care to gather email address with the correct data protection consents to enable further contact and to facilitate the development of real time dialogue. This has allowed the Business to form a reader panel of their email literate, upmarket readers appropriately called ‘AB Britain’ and enabled Andrew Neil, its publisher and editor-in-chief, to make current reader opinion the story.

The Business publishes each Sunday. The process of dialogue therefore starts each Thursday when a series of questions and statements that reflect the editorial subjects of the moment are emailed to the panel which immediately starts to respond, giving the editor detailed feedback for his Friday editorial meeting. In the run-up to the recent election, therefore, Mr Neil reported (April 17th) that "Readers fear Labour taxes but lament Tory timidity." A week later (April 24th) the story was "Readers back Conservatives in spite of party’s tax plans" and on May 1st "Tories get Business readers’ vote, but do little to earn it." Courtesy of the AB panel, and the immediacy of response to questions put to this panel, the story was the dialogue. Says Paul Woolfenden, managing director of the Business: "Media is having to adapt to a new world where the reader expects to be involved in their newspaper, and we at the Business are investing to facilitate this. Through the AB panel, not only are we able to involve our readers in the dialogue, but we are also able to help our advertisers to understand and reach this affluent and attractive market."

Seeking and receiving rapid feedback from readers through the internet has been the norm at Times Newspapers which, for several years, has operated its reader opinion panel through the internet. Again, from a database of web-enabled readers, the Times contacts several thousand panellists with questions seeking reaction to advertiser creatives, copy and product as well as to various designs or front page news treatments, and is rewarded with feedback within hours of broadcast. Another use of the internet as a source of ‘real-time’ research has been the measurement of national newspaper customer satisfaction through the fastMAP research panel which is drawn from 20,000 representative consumers provided by the Acxiom company. National editors now have the facility to measure changes in customer satisfaction month-on-month from a panel of their readers.

Managing the switch to compact

Nowhere has this revolution been more obviously embraced than at the Times which recently made the historic switch in size from broadsheet to compact. Mindful of the quality overtones of the compact size, and the strong affiliations that broadsheet readers would have for the broadsheet product, the Times sought to involve its readers in the switch in a way unparalleled in the industry. "We realised we had to change as a business" says Paul Hayes, the Times’ general manager, "because we had to think of new ways to grow our sale and to grow our business commercially." So, says Hayes, "we are listening to customers more, we are building one-to-one relationships, and are building and using new platforms to enable us to communicate with our customers on many levels (and as a result changing our commercial models). We used these new skills in making one of the most dramatic transformations in our history."

Hayes recognised that there would be many loyal readers for whom a change to the smaller size would be difficult. "So", says Hayes "we knew we had to talk to them to prevent them from leaving." Hayes already had a database of loyal subscribers who were easily contactable, but realised that he had to identify - and communicate with - his other vulnerable readers. Research showed that about 7% of the sale was vulnerable and, unsurprisingly, many tended to be older, loyal subscribers.

Tracking the vulnerables

The Times was then being published in two formats, broadsheet and compact, an exercise that was costly and difficult to sustain. As pressure was placed upon the availability of the broadsheet, a letter from the editor, Robert Thompson, was published asking readers to get in touch if they were having trouble getting the broadsheet. Readers were offered a phone number or a website to register their details. Calls that came in through customer services about broadsheet availability were logged and flagged as ‘vulnerables’. Through these and other means, some 200,000 readers were identified as ‘at risk’ when the broadsheet ceased to be available.

The stage was set for the full transition to compact. On October 30th 2004 the last broadsheet version of the Times was published containing another letter from the editor, explaining the decision and offering a free helpline number. The 40,000 subscribers who had not confirmed that they were reading the compact received a posted letter from the editor and another from the subscriptions manager. Both invited comments, and some enclosed vouchers to induce trial of the compact. A further 9,000 enquiring non-subscribers also received a letter, a phone call or an email (depending on details held).

The reaction was positive. Said Hayes, "readers who received communication from the editor were highly impressed to have been contacted directly. As a result of the contact strategy, only 11,352 of the 200,000 readers classified as ‘at risk’ contacted the Times to make a complaint and it was possible to follow-up 7,000 of them, 4,188 by telephone. Of those contacted by telephone, 95% of complainers that were non-subscribers are continuing to read the Times while two thirds of subscribers who cancelled their subscription have since re-subscribed.

Market share up

Did the transition work? At the point of switchover, some 607,000 copies of the paper were sold, but some two months later a 665,000 sale was being recorded with a 29% market share enhanced to 31%.

Clearly the great effort that had been made to foster and grow customer relationships had paid off. Says Hayes "media continues to move from addressing a mass audience to a massive number of individual audiences, and this fragmentation is due to developments in technology, online, DRTV, TV viewing choice, radio and developments in database technology". "As a result" says Hayes, "individual relationships with readers and listeners are ever increasing and are of importance in planning most corporate strategies. Whether we like it or not, technology has changed consumer behaviour and expectation forcing organisations like Times Newspapers (whose core product is not dependent on customer data) to take data-driven activity very seriously."

Newspapers are showing that they can adapt to change .. and that they can have an important place in this increasingly interactive, data-centred world.