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I subscribe to four different newspapers.


It's not because I always have time to read four newspapers every morning (I don't), but rather because I like to be well informed with different perspectives, and I like being able to skim the headlines and then go deeper on the articles that interest me without having to worry about paywalls.


But because I don't rely on any one paper for current events, I'm more price-sensitive about the amount of money I'm willing to pay for each one.

One of my four newspapers subscriptions is to The New York Times.

I began subscribing to the times because of a "Special Offer" available to new customers: for a full year of digital access, I paid only $2 CDN (+HST) each month.


My special offer rate expires today.


I know this because, on June 1st, the NYT sent me a reminder email.

The reminder email explained that my first-year introductory rate was ending, but that because I was a "valued subscriber", they were pleased to offer me a new discounted rate.


Except at $4 per month, the new discounted rate was 100% more than I've been paying for the past year. Further, I was informed the rate would increase to $20 a month 365 days later.


To be clear, I don't blame The New York Times for trying to get me to pay a higher rate: they're a business, and they need to be profitable, and if I saw enough value in my NYT subscription to pay $4 a month instead of $2 month, then there's little reason they shouldn't attempt to make me twice as profitable of a customer.


The problem is that I don't read the NYT enough to justify even $4 a month. I might read two articles each month from the paper, and the paywall they have in place allows me to access so few articles without having a subscription. My $2 monthly subscription was more like a tip for the articles I could otherwise read for free than it was payment for services rendered.


Still, I was willing to continue subscribing if they were willing to continue allowing me to do so for $2 per month. So I logged in to NYT.com and initiated a chat.


When asked what I wanted to chat about, I typed: "My promotional rate has ended, but I would be happy to renew if you can maintain my current rate."


A customer service representative named Nelsy replied to my chat message, and after pulling up my account, informed me the $2 rate was no longer available and that $4 per month was "the best available rate at the moment."


We'll come back to that in a moment.


In the "Retail Marketing Strategies" class I teach for the Schulich School of Business at York University, I spend a full lecture on the concept of "Loyalty and Retention".


For that lecture, one of the articles I ask my students to read was one published in 2013 by the MIT Sloan Management Review: "Should You Punish or Reward Current Customers?".


The article does a very nice job of explaining when businesses should offer better deals to new subscribers, and when current customers should be treated more favourably.


And what may come as no surprise to anyone who has ever dealt with a Canadian bank, it's generally a better idea to reward new customers over existing customers.


In fact, the authors of the article suggest there's only one scenario where current customers should be prioritized: when both the concentration of customer value (i.e. how valuable the particular customer segment is to you) and customer shopping flexibility (defined as the fluidity of customer preferences) are high, as illustrated in the chart copied below:

Shin, J., Sudhir, K. "Should You Punish or Reward Current Customers?". MIT Sloan Management Review. Fall 2013.

Now let's get back to The New York Times.


As a customer:

  • Am I particularly valuable to the New York Times? At $24 a year, I'm not.

  • Is my shopping flexibility high? Very. While there's only one The New York Times, the news they report can be obtained in many other places.

That puts me in the lower right quadrant of the chart, which means Nelsy was right to not provide me with a better deal: as an existing, low-value customer, I don't deserve one.


But does that mean I was being offered "the best available rate at the moment"?


No... Nelsy was offering the best available rate for me.


Those two little words make a big difference, you see.


Let's say my wife were to ask me something like, "What do you want for dinner?"


And I was to reply with, "Don't worry about me, I'm not hungry"... but the reason I wasn't hungry was that I stopped for a Big Mac and fries on the way home, a fact I chose not to proactively disclose.


In the example above, telling my wife I'm not hungry wouldn't be a lie... but it's also not particularly forthcoming about the reason it's true.


And as it turns out, Nelsy knows this little trick.


Because if I use my browser's Incognito mode and type The New York Times subscription, I'm taken to a page with a special offer that's $4 less than my current annual subscription.

I don't blame the news organization for trying to get me to pay more for the same service.


But that doesn't mean I'm going to do it.


I let my old NYT subscription expire today.


But my new one, registered under another email address I maintain, took effect on Saturday.


I no longer fully trust what The New York Times tells me, which is tragically ironic considering the organization's trustworthiness is critical to its long-term success.


So the next time my subscription is up for renewal and the customer service representative tells me that I've been given the best available offer... what do you think I'll do next?


It takes a long time to build a customer's trust.


Be wary of anything you might do to lose it.


Especially when the potential gain is as insignificant as $24 a year.




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