Sunday, March 18, 2018

Mail Tribune squanders credibility.

Watch out for the "loyal customer surcharge."  They charge their best and most loyal customers more.  


$130 extra charge for being loyal and reliable.


Why would a newspaper squander its reputation for being trustworthy?  It is a business decision, and it might work if they can keep you in the dark, but it disappoints me.


Pulitzer Prize Winner
Local newspapers struggle in the current media landscape.  Newspapers have become less of an advertising platform than a news source paid for by subscriptions. Classified ads moved to Craigslist, where ads are free, include color photos, and are easily searchable.  Display ads are scarce--too expensive and they don't draw customers. 

Newspaper audiences are getting older--and therefore less interesting to advertisers. Young people get their news digitally, with news feeds from local TV stations web sites, from Facebook, from Twitter. In the digital environment the original source of the news is less evident when it comes to ones screen than when one is sitting down with a physical newspaper. The experience of sitting down with a newspaper with morning coffee is a habit, primarily one of older people.

$374.40 for loyal customers.
Since advertising income has dropped, newspapers need subscription income.  I just learned there is more than one price.  There is the price for loyal, regular subscribers.  That would be me. $374.40 per year. 

It seemed like a lot, but I appreciate having a local newspaper to cover local institutions: city and county government, the airport, the fair, crime news, elections. The newspaper is thin now, with fewer stories, and those often written not by reporters on a regular beat, but by free-lancers being paid by the story. Still, it is more complete than TV news and it is better than nothing. I read obituaries.  They are a paid part of the advertising department now, but I need to know if an acquaintance has died. I began reading the Mail Tribune when I was age eight, looking at the comics and sports pages.  I have read it daily for 60 years. 

It is a habit and I was on auto-pilot.  When the subscription notice came, I paid.

There is a business model with some institutions in which long-term "legacy" customers are treated worst--by intention. They are taken for granted, and they pay a higher rate but don't know any better.  An example is telephone service plans for long term customers, which are given names like "Gold Package", and the companies hope that those loyal customers, acting out of habit and loyalty and in-attention, pay that "special rate."  It is special--especially high. The business model plan is "let sleeping dogs lie." 

The Mail Tribune uses this model.  

$244.40.  $130 less.
Customers who accidentally or intentionally let their subscriptions lapse are no longer loyal, reliable customers. Now the rate drops

The Tribune would charge them $130 less for exactly the same subscription--52 weeks of daily, home delivery. 

This is totally legal and may even be smart policy in a Business School study of profit maximization. If the loyal saps are willing to pay $130 extra, let them.  Tell people the price is $374.40, and the people who trust you will pay that, but there is also another price, one for people who don't know and trust you.

A lower price.

The problem with this is that it relies on loyal, habitual customers being kept in ignorance, and that if they discover the price difference the institution hopes they won't consider it manipulative and dishonest. But it is in fact manipulative and dishonest because it relies on misplaced trust and customer ignorance.

Trust and information are what the newspaper has to sell.  It is their institutional brand. What they do at the subscription office reflects on the whole brand. If they snooker you for $130 on the subscription price then the newspaper revealed as untrustworthy. They tell you what they want you to know--$374.40 is a good and fair price--not what you would like to know--that you could get it for $130 less.

Amid the Trump attacks on "Fake News" one of the assets newspapers had was the credibility that comes from inertia and habit of mind of having considered your local newspaper a trustworthy institution.

Now not so trustworthy.


1 comment:

Anonymous said...

(Hmmm, tried to comment, wouldn’t post, trying again...)
So, the MMT w/ my morning coffee has also been my ritual for years. When I get my renewal at the higher rate, I go in to complain. They’ve explained that the lower price is an “introductory rate”. When I tell them that I think that sucks, and to cancel my subscription, they agree to bill me the lower rate for the next year. Same with Charter cable/internet. I call and ask for the retention department and tell them to cancel my account; I’ll sign up with Dish, or something. They agree to the lower rate I’ve had. Been doing this for years. They’ve trained me well.
(It’s not the money, it’s the principle. Peter, I also resent being penalized for being a loyal, long-standpoint customer.) -Carolyn Shaw