CRM For Newspapers

Source: www.flickr.com, www.wikipedia.com

It will come as no surprise when I say the Newspaper Industry has been in turmoil for some time now. Despite having joined the Internet bandwagon, Newspaper publishers have had to deal with distributed readership, fluctuating subscription and circulation figures, uncertain advertising revenues and ambiguity in internet adoption.

The struggle has continued with multiple attempts being made to retain readership and increasing revenues… most with some effectiveness but not enough to sail through. Is it that they have done nothing right? No. Chicago Tribune’s Metromix was a sell out, so was New York Times foray into the blogosphere. There are many such examples to go by but the question still remains- Is that enough? Once again the answer is No.

There is a lot that Newspapers can do and one of the options is using CRM more effectively.

With the integration of print and online, there needs to be a centralized CRM. Having a single source of truth as far as the customer goes has become quite pertinent to stay ahead of the game. Where a centralized CRM helps is:

• Providing a centralized view of advertising effectiveness
• Enabling a holistic view of circulation and subscription numbers
• Centralizing sales data for both channels

Most Newspapers have already begun implementing an integrated CRM system. Whether they are exploiting the potential of this data and the reports is anybody’s guess.

What Newspapers need to adopt now is the next generation of CRM, i.e. Social CRM. As the name suggests, Social CRM is all to do with Social Media. Today, if there is one wave that Newspapers need to ride on it is Social Media. There is a plethora of user feedback and sentiment that is available out there which can be put to optimum use by Newspapers esp. for their online content.

• Capture user feedback, comments and sentiments through popular social media platforms such as Facebook and Twitter to create relevant and accurate editorial content
• Use the user data to publish articles/content that is relevant to each demography
• Implement contextual and/or subliminal advertising to increase effectiveness
• Derive sentiments and messaging from user generated content (blogs/citizen journalism features) to aid editorial
• Get proactive feedback on content through social channels
• Implement social analytics to analyze subscription, circulation and advertising feedback and figures
• Provide innovating subscription packages and bundles based on user feedback

Traditional and Social CRM both can go a long way to help Newspapers understand the customer’s need and ensure retention. With the immense data that these systems can provide, Newspapers can achieve what they have struggled with esp. in the online world- proximity to the customer.

How well they adopt and exploit the potential that is within their reach is to be seen.

The Fight for Survival

Courtesy: http://www.west-quay.co.uk

James Daunt (MD, Waterstones) recently made a statement that Waterstones could live with Amazon. While most other publishers are groping in the dark and mulling over how this Amazon could be conquered, Daunt seems to have found the answer.

Dwindling sales made Alexander Mamut (of HMV) bring in Daunt to salvage the company from the trouble it was in.  Daunt revamped the entire book selling process and began to focus on a simple motto that each and every book seller should follow- “What does the customer want”? With this objective in mind each Waterstones book store started focusing on stocking books that were relevant and catered to the customers of the resp. stores. However the icing on the cake as far as Daunt was concerned was partnering with the feared monster- Amazon.

Through this partnership Amazon started selling Kindle and eBooks from Waterstones stores. What attracted me to this post was Daunt’s philosophy behind this move.  Where most publishers have begun dreading the advent of Ebooks, Daunt believes that majority of the population are still print book loyalists… and so do I.

How much ever popular Ebooks might get; the charm and experience a print book has cannot be replaced as far as the reader is concerned. This is a firm belief most book lovers have and continue to stand by.Based on this perspective Daunt introduced Kindle into his book stores and true to his word his sales did not fall.

A bold move no doubt, but Amazon has been leaving no stone unturned to take control over the market. In a market scenario where it is now a question of survival it makes all sense to pull all stops that one can. If Waterstones could claim their stake at survival why cannot the rest?

Unraveling the Ebook Conspiracy

Courtesy: cherylktardif.blogspot.com

It all began with Amazon entering the fray for supremacy in the book selling business. The signs were always there for everyone to read, esp. with the launch of the Kindle that revolutionized the way the book publishing industry works. Print books were no longer the only path to choose, the rise of the Ebook opened up newer avenues for all entities involved in the value chain.

The next step was simple- make money.

Traditionally publishers would set the price for a book and distributors such as Amazon received a fee (usually 30%) on every unit sold. This is popularly known as the agency model. With Amazon stepping in, they adopted what is now known as the Wholesale model. Historically used for print books, this model allows the publisher to sell books to the distributors at a fixed price and the latter has the option to set any price they prefer while selling the book to the end consumer.

Owning approx. 70-80% market share in Ebooks, this model put Amazon in an extremely comfortable position. Pricing Ebooks lower than the standard price would not stand in the way for Amazon to realize its monetization objectives; it in fact benefited the Giant by giving them the opportunity to cross sell and up sell other products thus increasing its overall sales.

However things did not stay rosy for long. Apple decided to enter this market by launching an Ebook store and with the hope of developing a new market for its latest technology marvel- the iPad. To be profitable in this market, Apple had two options to consider

1. Partnering with Amazon: Had this venture taken birth, it would have taken the market by a storm. Both would have acted as a reseller for the other however Apple decided it would be more profitable to sell at a higher price than the Amazon standard of $9.99.
2. Forming a liaison with the Publishers: Apple reached out to five of the top six publishers (Hatchette, Macmillan, Harper Collins, Penguin and Simon & Schuster) agreeing to act as a distributor for them on the condition that Amazon was forced to increase the price. To bring this into effect, Apple designed a most favoured nation (MFN) clause in its agreements which required Apple to be able to sell books at the lowest possible price. This clause would imply that publishers coerce Amazon into increasing its price and thus moving from the Wholesale model to the Agency model. One method adopted to do so was delaying the launch of Ebooks on Amazon. Not to be let down, Amazon retaliated by removing the “Buy” option against the books belonging to some of the publishers and working out a model with Authors where in they were offered up to 70% royalty for pricing books between $2.99 and $9.99 and removing any middle men from the deal. Amazon could not hold fort for too long with all publishers dictating conditions and forcing a move to the agency model.

The latter option that Apple chose led to the DoJ suing Apple and the five Publishers for conspiracy to fix book prices. Three of the five publishers reached an out of court settlement which allowed Amazon to resume discounting books and terminated the MFN clause with Apple. The settlement also prohibited the publishers from entering into an Agency model agreement that prevented retailers from offering discounts. Macmillan and Penguin eventually opted for a settlement while Apple continued the battle eventually losing the case.

This incident if nothing else does imply the fierce competition that exists in this market and the extent to which players can go to stay competitive and maintain their market share. With Ebooks gaining popularity, the publisher is bound to lose control to a large extent. The publisher’s argument that the Agency model will help the book industry survive does have essence of truth in it however given the nature of this market and the rate at which it is growing, the pricing wars will continue and Amazon will play a dominant role in controlling the market dynamics. It is time all publishers and potential distributors accept this fact.