Thursday, May 13, 2010

Magic, My Brother Mark, and The Butts of Newspaper Execs

My younger brother, Mark, has a newspaper distribution business.  He has a staff of 25 folks that deliver newspapers the old fashioned way, door to door.  He delivers a variety of papers including the New York Times, Hartford Courant, Wall Street and some others.  And at a time when newspaper readership is shrinking, his business is growing.  Don't get me wrong, I don't think he's going to become a millionaire with this but on a recent rare in-person visit (and Mark if you're reading this you need to visit more often in particular to see Mom) he commented that his customer base had increased in first quarter by 6%.

I think there's some magic here.  The kind of magic I espouse to.  His business is customer focused, the customer selects what papers they want and Mark delivers that assortment.  Yes, it is a logistics nightmare with each customer getting their 'special' blend.  Customer A getting newspapers X and Y on Sunday and customer B getting only newspaper Y but daily.  You get the idea. Needless to say he seems to spend a lot of time working on spreadsheets for his delivery crew.  But his focus and the basis of his success is that he is providing a personalized product in a mass audience environment.

More magic, he's targeting Boomers and their parents.  People who still have a love affair with Sunday mornings, great coffee and the New York Times (adding "after church" is optional).  Let's not forget that Boomers have a ton of buying power, many want and can afford the newspaper and also the stuff advertised in it.  This is smart (and also is a comfort to me that provided there are newspapers, he'll have income for a long time - see my post on living to be 120). 

In addition to Mark being in the newspaper biz I have a friend, a consultant, working with a newspaper that evidently hasn't updated their subscriber list since sometime in the late 90's.  All I can say is, "Unbelievable" as I come from a direct marketing background, and know from personal experience that customer files need to be "scrubbed" routinely, at least every 6 months in my book.   

Based on this experience, I have questions like how do newspapers update their customer files, what's the frequency and what's the current list status?  Who determines if the paper is "deliverable" and is that determination up to date?  How is new customer information integrated into the files?  Don't they have a business plan and is it being used?  What do their advisers say? 

Or is the commonplace scenario, one that Greg Satell described in his post Newsweek's Failed Strategy about Meacham's plan evidently enacted without customer research.  I also offer you Peter Kafka's insights on the value of newspapers as information resources in his article, Google's Secret Plan to Save Newspapers.  And I'm wondering, if some of the financial bleeding couldn't at least be slowed by a serious review of the operations structure, in particular as it relates to meeting customers' desires.

Perhaps GSI Commerce's CEO, Michael Rubin, isn't the only chief that needs to go undercover.  Maybe the folks at the top need to get off their butts and out of their safety silos and spend sometime with the folks involved in the actual delivery of their papers.  I bet they'd discover some ways to fortify their business while seeking profitable ways to evolve their product, not the paper product, the other one - information.

update on Newsweek and a perspective from David Carr, June 7, 2010,   The Media Equation:  Changing the Course at Newsweek