by Tatiana Repkova

Wayne Burton, circulation director of the 20,000-circulation Decatur (Ala.) Daily, knows that newspapers can maximize their circulation revenues if they tap into the power of their core subscribers - those who have subscribed for over one year.

Burton tested the power of core subscribers by making drastic changes when he first arrived at the Daily in July 2006. He slashed discount and delivery options and raised prices, all without losing a single subscriber. The changes will net the Daily $120,000 in revenue by year's end. His actions went against conventional industry wisdom - but they worked.

"Everything I did was absolutely not supposed to work," said Burton. "But I just went for it to see what this market would bear."

Before Burton arrived at the Daily, he examined the paper's circulation statistics, including recent start-stop histories and frequency reports. He noticed that circulation went flat in 2006. The gains and losses for the six months before he arrived in Decatur were almost identical.

"They had dropped down to what their core numbers were," Burton said. "Sales and stops were levelling themselves out. Seeing the numbers the way they were, I just felt it was a good time to fix everything at once." The paper was trying to manage a mess of 84 frequency and discount combinations, many priced at rates that didn't make financial sense.

"All these frequencies at different discounted rates for the entire year - it was just a nightmare," Burton said. For example, he discovered the paper was losing money on its EZ Pay customers. The paper was charging EZ Pay customers for $10 monthly subscriptions, yet carriers were being paid $10.50 to deliver those papers. Burton is a big proponent of EZ Pay, but not the discounting that frequently goes with it. "This saps the benefit," he said. "It makes it easier for the customer, but you're losing money on those papers."

Burton slashed delivery options down to two: Monday through Sunday and Sunday-only. Then he imposed a price increase across the board, levelling out all subscriptions at $11.40 per month. Burton had expected 300 to 400 subscribers would quit over the drastic changes. None did. "Core subscribers - they are unshakeable," said Burton. "They are the ones that truly want the paper and see the value of it. If you're only running 50 percent core, that is not the time to do anything," he said. "But if your core is 80 to 90 percent, you are standing in a very good position."

http://www.inlandpress.org/main.asp?SectionID=60&ArticleID=1297&SubSecti... May 11, 2007