Newspaper publishers spend millions of dollars annually to ensure that the newspaper arrives at the newsstand or the subscriber’s doorstep every day. Reporters track down stories and editors diligently maintain the editorial integrity of the newspaper. The production department meticulously guarantees that ads make it onto the right page. It is no small feat that this daily production process has continued for centuries across every city and town in the world.

Molloy

Therein lies the rub. With a resolute focus on both the published newspaper and production efficiencies, newspapers have become true stalwarts of the industrial age. The last decade has ushered in a new era, the information age, which is characterized by an unwavering focus on customers. A newspaper’s most valuable asset is its customer base. Today, customer service means more than delivering the newspaper on time, every time. Many newspapers are transforming their organizations from manufacturing-oriented enterprises to customer-centric businesses and relying on customer relationship management solutions to help catapult newspapers into this new age.

A customer of the newspaper

According to the Readership Institute, customer service is a major driver of the commercial relationship between the newspaper and its reader. The ability to consistently provide top-class customer service is eluding newspapers today because there is not one unified view of the subscriber’s interactions with the newspaper.

Customer relationship management solutions enable the newspaper to represent a single corporate identity to the customer. The core of a CRM solution is a single database where customer information is stored and updated with every interaction. CRM solutions allow the newspaper to take advantage of embedded best-practice business processes in sales, marketing, and service to quickly and cost-effectively deliver superior customer experiences.

Newspapers can leverage well-known best practices, including efficient and effective skills-based routing in their call centers, to achieve higher customer satisfaction, reduce average call-handling times, and improve agent productivity. Customer calls are handled efficiently and effectively and are routed to the most appropriate service agent for first-call resolution.

Integrated analytic capabilities within the CRM application enable newspapers to analyze advertiser and subscriber data to generate reports indicating trends in customer behavior, service activity and pricing metrics. As a result, newspapers have the solutions they need to make critical, insightful business decisions.

Reader churn - a corrosive problem

Subscriber churn costs newspapers money — both in lost revenue on products sold today as well as forgone dollars on future products. Most U.S. newspapers lose 50 percent of their circulation base within one year. In today’s context of declining readership, reader No. 156,265 suddenly becomes significant. A cancelled subscription represents an individual — perhaps even a household — critical to the success of the newspaper and its advertisers.

A useful way to visualize the subscriber relationship is to consider each stage of the subscriber lifecycle as part of a process, including lead generation, acquisition, service, renewal, and cross-sell processes. At each interaction point along the customer lifecycle there are three possible outcomes: churn (in either defection or a downgrade from seven-day delivery to the weekend edition, for example), up-sell, or plateau.

A CRM application with encapsulated best practices in customer segmentation, campaign management and differentiated service enables a newspaper to intelligently and efficiently generate the optimum outcome with every interaction. For example, when a customer issues a service complaint three times in a given period, an embedded mechanism can automatically trigger a service representative to promptly ensure customer resolution, using insight from the newspaper’s CRM application.

Readers are often willing to share individualized preferences with a credible newspaper, however, many newspapers do not capitalize on the opportunity to collect and analyze this information. Properly administered, newspapers are uniquely positioned to forge a symbiotic role by connecting readers with advertisers. Each time a customer calls to the newspaper or receives a telemarketing call, a representative can not only effectively cross-sell additional services, but also leverage the opportunity to deepen the newspaper’s understanding of the reader and capture this information using the CRM application. As a result, advertisers will pay more for targeted prospects and readers will receive the information they need.

Advertiser churn also costly

More than 30 percent of most U.S. newspapers’ 1999 display advertisers did not renew placement in 2000, resulting in millions of dollars of lost revenue. Acknowledging that a portion of these advertisers may have gone out of business or decreased their budgets, publishers concur that the majority of lost advertisers can be attributed to antiquated sales processes and inadequate tools. There is a significant drive at many newspapers to transform sales representatives from “order takers” to “consultative sales professionals” who understand the advertiser’s marketing goals and can propose solutions to meet these objectives.

CRM solutions integrated with proven business processes in contact management, account management, and forecasting can streamline the sales process and allow sales representatives to spend more time selling and less time on administrative tasks. Complete visibility into advertisers’ contact history, including the ability to model the advertising company’s relationship with its advertising agency will improve even a new sales representative’s ability to meet advertisers’ unique needs.

The objective of CRM is to maximize the lifetime value of a customer by building stronger and deeper relationships. CRM solutions help newspapers break the cycle of subscriber and advertiser churn and enter a virtuous cycle of monetizing loyal readers and advertisers. Integrated customer management is a critical competence for any company, and the newspaper publishing business is uniquely suited to benefit from customer loyalty.

Margaret Molloy is the segment lead of the media organization within Siebel Systems Inc.’s communications and media business unit. She can be reached at 212.520.7454 or via e-mail at mmolloy@siebel.com.