Leading US Daily Newspaper Doubles Response Rates

Client

A leading US Daily Metro newspaper with close to a million subscribers.

Challenge

Loyalty Matrix has worked extensively with one of America’s largest metro daily newspapers, which has experienced stagnant circulation through most of the past decade. Its management had attributed this as a sales issue, with lost subscribers always being replenished with new sales. As a result, their marketing programs were focused aggressively on new sales volume, which often resulted in a misallocation of marketing resources toward inexpensive but low quality sales. This in turn caused high subscriber churn and a constant need to replenish lost subscribers.

Analysis

In April 2005, the newspaper engaged Loyalty Matrix to apply marketing analytics to address these issues. Its subscriber data was uploaded to MatrixOptimizer (“MO”), our on-demand marketing analytics platform. We began by running predictive data models from MO on this data to identify the principal drivers of long term value, and to define the key subscriber value segments, as well as the projected lifetime value for each segment based on retention and revenue.

These metrics, along with cost-per-sale data for each segment, were built into a planning dashboard. Using this tool, marketing planners can easily enter assumptions based upon a given budget, a circulation target, or a sales target. The dashboard allows the planner to shift dollars between media, channel and target segment, and to see immediately the likely outcome.

This newspaper’s marketing is further optimized in each channel via focused analyses into customer segments, marketing tactics, and pricing & promotions strategies. Where historical data is not sufficient to deliver needed marketing insights, sophisticated, multi-variate test programs are employed to further empower of marketing decision-making.

Results

Loyalty Matrix enabled this leading newspaper to focus on the drivers of its most meaningful metric – long term subscriber growth, and helped them implement tools and processes to turn subscriber data into actionable insights. As a result, data-driven marketing programs are having a profound impact on the business. In the circulation statement issued on March 31, 2006:

Compared to last 10 years of declining circulation, home delivery circulation rose by over 24,000 for weekday subscriptions, and over 32,000 on Sunday subscriptions
In growth markets within their geographical reach, home delivery circulation saw double digit percentage growth during those same six months.
By deploying the tactical winback plan produced by MO for the “former subscribers” segment, the newspaper saw the response rate increase from 0.1% to 0.2% for that segment, a 100% improvement that translates into $1.25 million in revenue.

Follow Up & Optimization

New subscriber and marketing data are updated into MatrixOptimizer on an ongoing basis, so that marketing decisions are always made with the most recent and meaningful data. For each channel, MO provides focused analyses for customer segments, marketing tactics, and pricing & promotions strategies, which continuously get refreshed with each new data feed. For cases where historical data is insufficient to deliver insights, MatrixOptimizer enables creating sophisticated, multi-variate test programs to further empower of marketing decision-making.