Greg Talbot, National Manager of Newspower, the largest newsagency marketing group in Australia, wrote to Newspower members last week expressing concern at reports of claims being made to Newspower members to get them to switch to another marketing group:
The claims of being able to offer massive increases on sales and profits are not supported by fact or substantiated by documentation.
Newsagents are doing it tough enough without having to deal with this type of rubbish and our industry would do well to reject, expose and remove those who say and do anything to achieve their end. Unfortunately, there have been too many examples of this type of behaviour in our industry over the years and too often, hard-working newsagents have been left to carry the financial burden of their lies and deceit.
newsXpress, the newsagency marketing group of which I am a Director, shares Greg’s concerns. We, too, have heard of wild claims of massive profits and of offers of cash inducements to newsagents if they switch marketing groups and card companies. We have heard that the promises are not put in writing and the obligations on newsagents if they do switch are not fully explained.
newsXpress and Newspower make it easy for newsagents to switch to another group because neither requires newsagents to sign a contract binding them to the group for five years. This easy get out holds newsXpress and Newspower more accountable to their members.
A locked in contract suggests, to me, that the group does not back their claims with action and thereby needs a contract to maintain numbers.
Aggressive marketing and cash inducements can divert newsagents from asking tough questions and wanting the claims documented.
A bag of cash today will do little to add value to your business when it comes time to sell. Newsagents are better off engaging with their marketing group, adding value, increasing profit and reaping the rewards through better goodwill when it comes time to sell.
We saw this last year with a series of good sales for newsXpress members in Queensland.
Last year, I co-wrote How to Choose a Newsagency Marketing Group. The advice in this document is good for any newsagent considering joining a marketing group. It is fair and not aimed at directing newsagents to any one group. Newsagents reading this document would be well prepared for the triple punch from the marketing group targeting newsagents at the moment ad documented in the Newspower letter.
There are two marketing groups in the newsagency channel which lock newsagents in for five years: Nextra and The Lucky Charm. Five years is a long time to be bound to a group if you are not happy.
The last time I saw this heavy-handed type of marketing to newsagents, it was being undertaken by Bill Express. Two of the people involved then are involved in promoting one of the marketing groups today.
Newsagents should be suspicious of high-pressure heavy handed marketing where claims and promises are not put in writing. They should be on alert when the marketing pitch for a marketing group, or any supplier for that matter, is more about attacking the competition than pitching and documenting their offer. The lack of documentation around the Bill Express claims made it challenging for many when newsagents wanted to get out.
Click here for a copy of Greg Talbot’s letter. I have his permission to make it available through this blog.
Ultimately, newsagents have to make their own choices. There is no rush. Take your time. Shop around. Start by working out what you want from your newsagency. Talk to other newsagents and decide what is right for you and your business today and for when you decide to sell.
I can be reached on 0418 321 338 if anyone wants to discuss this or any other post.
