Kannon’s client is a Canadian daily metropolitan newspaper with a weekday circulation of about 420,000, and a Saturday circulation over 600,000. The client wanted to evaluate its current reader reward program and assess alternative approaches to retention/loyalty strategies. There was an increasing concern to understand how successful loyalty programs were best executed and managed within newspaper organizations, and what the measures of success for such a program are.
Through its Outside-In approach, Kannon built a baseline understanding around loyalty programs across both non-media and media companies, with an emphasis on start-up investments, ongoing operation costs, direct revenue opportunities, and value added from the standpoint of customer retention or good-will. The team agreed that a new loyalty program would only be a worthwhile investment for the client’s company if it could reduce churn, increase consumer engagement, deliver a positive ROI, or help drive additional revenues from either circulation or advertising.
Kannon also facilitated a focused session with key team members, as well participants from select sibling and partner organizations, with the goal of building a common view of current subscriber retention issues and identifying near-term opportunities for retention marketing. Common themes and opportunities identified at the meeting centered on improved customer service and responsiveness, as well as enhanced subscriber data gathering and management.
Based on the strategic implications that emerged from the project, the team recommended not to move forward with any formal type of loyalty program at that time. Kannon’s findings also helped the client decide not to continue with its current reader reward program. As the client’s Vice President of consumer marketing explained, “Kannon helped us make the decision to get out of the loyalty program business, which saved ourselves about $2 million a year.”
Additional recommendations including exploring value-added services and products, and other retention activities to address churn in a more direct and cost-effective manner than through a loyalty program. Shortly after the project concluded, the client developed a previously untapped customer relationship-building business venture, which combined email marketing and consumer rewards involving special access to local events and programs.
“The work that Kannon did ended up opening a new business opportunity for us that we had never even considered before starting the project, which we estimate can generate over $3 million in incremental profits once fully operational,” the VP of consumer marketing explained. “We were pleased with the outcome of the project. Kannon did not just give us the type of answers they thought we wanted to hear. They pushed back and challenged everything, which led to a better, more persuasive end result.”