A successful circulation revenue stream starts at the top. For my initial blog topic, strategic circulation pricing and revenue, I am going to start by giving you a brief historical perspective on my journey to Dallas and my current roll as Director of Audience Development at The Dallas Morning News.
In my now 13-year newspaper career I have been through two significant circulation pricing actions. In both cases, the roll of the Publisher and President defined the success of both pricing actions.
There is a saying which states, “Culture eats Strategy for breakfast.” As you are considering various strategic pricing actions, culture must be addressed early, and head on, or your pricing action will not succeed.
I vividly remember my first summer as a sales rep in the circulation department at The Oregonian in Portland, Oregon. It was May 1997 and I had just graduated from the University of Washington. I had completed two previous summer internships at The Oregonian in the advertising department (do you remember when we had the budget for interns?), and I was excited to go into my senior year at the university knowing I wouldn’t have to sweat finding a job upon graduating. Arriving for my first “real” day of work in May 1997 my Automotive Sales Manager came by my desk and asked me if I had a few minutes to go see the President of The Oregonian, Patrick Stickel, with him.
For those of you who have never had the pleasure of meeting Patrick (he just retired this past December), he is a man of very few words. A former Marine, Patrick is appropriately intense, a stickler for detail and has an incredible feel for the newspaper business. “Mark,” Patrick said, “Welcome back. We are happy to have you, and we are moving you to the Circulation Department.” Patrick continued: “You see Mark, you can go to school and specialize in business marketing, but you cannot go to school and specialize in circulation – and this industry needs good circulators.”
As I sit here and type, Patrick’s statement and action was on point – regardless if I agreed with his opinion or decision at the time. To say I was in shock would be a drastic understatement. The last thing I wanted to be doing was getting up in the middle of the night, checking on contractors, making sure Ms. Jones’ paper was placed “just right” on her porch, and God forbid, knocking on someone’s door and having to actually “sell” something.
The next couple years were a blur, a good blur. I fell in love with circulating the paper. Maybe one reason was at $11 a month for a seven-day subscription, selling the paper was such an “easy” sale. The Oregonian is a great paper, it has a great connection to the community, yet the paper was drastically under-priced.
I distinctly remember thinking that when I become the sales manager the first thing I am going to do is increase the subscription price. The content is too valuable for an $11 monthly price point.
1999-2000 were watershed years at the Oregonian in terms of circulation size. Beginning 2000 the internet began to eat away at circulation volumes. By 2003 west coast newspapers were under full attack. Tertiary newspaper subscribers were finding free content alternatives online and Craigslist was capturing the once highly profitable private-party classified revenue base. The perfect storm had begun.
Seeing the potential for circulation revenue to be next – in true Marine fashion – Patrick Stickel went to the flank and made a critical business decision. “Raise the basic rate and discontinue the use of discounts immediately.” This was a bold decision but not undoable. I remember the all-circulation-hands meeting where Patrick Stickel – without the use of any data or research to guide his decision – stood in front of his circulation department and essentially gave the marching orders and literally demanded success.
At the same time Patrick and Publisher Fred Stickel made a key admission. Both Patrick and Fred knew ultimate success depended on their determination to stay the course. This began the transition at The Oregonian of quality audience. As other papers across the United States turned to third-party and bonus days, The Oregonian became increasingly conservative and raised price. Over the next few years, even as volumes declined, we stayed the course and concentrated on building quality audience, reducing churn and driving circulation revenue.
The key to all of this was The Oregonian’s strong corporate culture. Executing a pricing strategy is difficult in our industry. Advertisers, still today, look for quantity reach, and it is hard for a Publisher to take a call from a senior citizen on a fixed income who can no longer afford the paper because the price is out of their reach. The fact is, these are the decisions we have to stand by, and the ultimate success of strategic pricing is a Publisher’s ability to stay focused.