Many people know USA Today as the newspaper found at their hotel room door. It engages readers with a balanced variety of news topics in an easy-to-understand format that is informative yet fun to read when traveling on business or vacation. However, home delivery, currently reaching 300,000 subscribers, is another very important part of USA Today‘s circulation, and direct mail plays a very important role in meeting our circulation and revenue goals.
If direct mail is USA Today‘s most expensive order source and requires more time than any other channel to manage, then why is it such an important sales channel? The reason is that direct mail is one of the few channels where growth can be achieved and the appropriate demographics can be targeted without increasing the budget. The better we target, the better the results can be.
There are three major challenges that USA Today has in accomplishing its goals with direct mail. The first is that USA Today only accepts paid in advance (PIA) orders. We have tested out of the “Bill Me” option. This has lowered our response rates and required patience to evaluate the cost per unit (CPU) for annual circulation. By eliminating billed orders, USA Today can maintain a level of circulation with a lower CPU.
The second challenge is that USA Today offers carrier delivery to more than 50 million households. This represents opportunity, but also limits where we can offer our product because most people want a newspaper delivered early in the morning, not through the mail.
Yet another challenge is illustrated by research done by USA Today, which illustrates that the typical home delivery subscriber utilizes USA Today to complement their local newspaper. Therefore, we need to find subscribers that have time to read two newspapers or need to read multiple newspapers for their business.
Despite of these challenges, USA Today has had success with its direct mail efforts. One of the keys to this success has been ZIP code targeting. USA Today measures all direct mail by zip code. We continue to fine tune what ZIP codes work and narrow our focus by ZIP code. We provide a ZIP code file for every list that we mail.
Another success has been our hotlines only policy. USA Today has tested compiled data sources with mixed results. Our control lists are monthly hotlines, DM-sourced, paid orders only. Our improvement in response rates more than makes up for the added expense.
Auto renewal offers have been a third success story. Our offer now includes an incentive to go on automatic renewal on credit card. This does suppress our upfront response rate, but our improved retention rate more than compensates for the loss of upfront response. We have also have a check option and make sure that all payment options are easy to understand.
By focusing on where we mail, the selects of the list, and getting the subscriber on auto renewal at the time of order, we have lowered our CPU by 30% over the past 2 years. Because it achieves these results, direct mail has become a more important part of USA Today‘s sales plan than ever before.
Steve Upton is director of subscription sales and marketing for USA Today. You can reach him at [email protected].