Pricing Your Product

This Is A Newspaper

Today’s topic is an issue I am dealing with right now regarding my local newspaper. For those of you under 30 a newspaper is the thing that old people use to protect delicate items from being broken when being shipped. Yes, I read a newspaper and I am not ashamed to admit it. They have a great deal of value for local news and that is the only reason I like to have one delivered to my driveway.

Now, back to the issue at hand — my newspaper and its pricing policies. I have subscribed to my local paper on and off for about three years. That is the problem. It has been on and off. I first got an introductory one year subscription for $89 for one year. When the subscription expired, the renewal was $115 and I reluctantly renewed. As the next year was ending I was definitely thinking I needed to offer the newspaper my renewal at $89 or less. I could no longer justify the $115 price. The renewal arrived and I wasn’t offered the same $115 that I already thought was too high but $155! This was a 35% increase! I didn’t even bother to call and haggle, I was done with the paper.

It has been a about year since I did not renew and over that time I have gotten offers to come back but none were good enough to entice me back. Finally, a few weeks ago I got an offer that I could not refuse. It was 6 months for $35! I imagine after the 6 months is done they will go back to their $155 rate per year and I will drop them again. My question is; why did they not just set a reasonable price and they would have been more likely to keep me without interruption and we all would have been better off.

They way I look at it if they would have stayed at $89 per year they would have been better off since they got nothing from me for a year, $89 for a year and $115 for a year and now $35 for a half-year. The delivery person would have liked this since my neighbor has been getting the paper continuously throughout this saga.

I fully understand that newspapers are undergoing extreme changes in their industry but they need to ascertain the proper selling price (the perceived value) of their product and develop a good estimate of the revenue stream from subscriptions and advertising and adjust their cost structure accordingly. This is probably easier said than done especially when technology has disrupted the status quo so greatly.

One thing they should do is improve on the quality of the product. Get more in-depth and better local reporting that is still essential to any concerned citizen or business owner. Why there is any space devoted to any national issues in a local newspaper today is beyond my comprehension. For years we have been able to get national and international news in real-time on radio, TV, Cable, the internet and now Twitter or Instagram.

I will end with the admonition to all business owners to price accordingly because discounting your product cheapens the value and in the end you may get less than you otherwise could have if you set a reasonable price in the first place.

Have a great week; I need to drop my special renewal rate card in the mail box (They are paying for the postage!)