I have been approached by newsagents over the last couple of weeks about an apparent increase on pressure from News Limited to get the newsagents to convert newsagent-won home delivery customers to direct with News Limited subscribers.
In one case, a newsagent claimed that they would lose money as more than one hundred direct home delivery customers switched to the cheaper and lower margin News Limited subscription packages.
Other than pressure from News why would a newsagent switch a customer from a long term arrangement to another which provided a lower margin?
I can understand the News mission, they think that every newspaper home delivery customers is owned by them and they would therefore want a direct relationship. This is what gives them flexibility for the future. If the newsagent controls the customer relationship they have less flexibility.
This is spot on. I can get a new customer for say the Tele. The Tele then contacts them through telemarketing or via an add in the papper and they then get a cheaper package. I then help pay the discount given by the Tele to take my customer by a reduction in what I would have earnt as having the customer myself. My Payment by the Tele is cut to reflect the subscription price charged.
Other observations is that Tele Marketing does not care who they put on:-
1. Invariably when the subscription is flagged for me to collect about half the time it is because the subscribers Credit History is bad.
2. I have seen Telemarketing put on a lady who could not read or write with me to collect the bill. The lady was a client of Elouera (worked in recycling) with a tribe of kids and does not like blokes for some reason. Sometimes it easier to walk away.
They are out to convert as many of our customers as possible to themselves.
Peter I have heard many stories like this. It’s a challenge for the associations as they feel the need to maintain a positive relationship. In the meantime, newsagents are being bullied – from as far back as two years ago on this.
This was one of the reasons we quit deliveries.
In one weekend fairfax, news and apn rang the bulk of my delivery area and did not care if they already had papers delivered or not but put on the hard sell offering huge discounts (discounts on papers I already delivered). Anyway about 1/2 my customers switched as you cannot blame them, as they are getting the same paper for a fraction of the cost but it cut me out of the loop.
Some of these customers still owed me money for deliveries but the papers could not care less, anyway it was the best move I ever made as I no longer have to chase bills or get up at ungodly hours and holidays for no return.
Mark looking at this sort of behaviour by News it makes me look at the Fairfax offer in a whole new light as Fairfax can then discount to its hearts content and I do not loose on commission for it.
As it is home delivery is a low to non profit business any way. You need serious scale to make it work. A way forward could be that we hand all home delivery customers to news papers . They can have the trauma of collecting delinquent accounts, and we could be paid a delivery fee which is calculated on a cost-up basis. What the associations need to do is define a cogent strategy and pursue it assertively. The current discussions seem to nothing more than directionless hat wringing sessions.
I do view home delivery differently… We are in an older demographic, where the paper still means something to the customers. Our run continues to grow, and whilst not a money making bemoth, through the provision of accounts it is a reason to customers to come to the centre.
Taking that last point, we are not a major woolworths or coles complex. We have one of them 3KM down the road. Centres like need customers to survive, as we are not a destination point, customers need a reason to come to to the centre. The monthly accounts provide a reason. This benefits not only us the Newsagent, but all tennats. It helps make a centre feel more vibrant and that attracts more customers.
The taking control of customers, and out inability to offer to the same deals means that there is one less reason for a customer to attend a local centre… Not having a go at those that operate in major centres, but thi approach if killing the local centres…