It’s no secret that the newspaper industry is going down hill. They’ve had major cash flow problems for a while, way before the economy decided to go in the tank. And there are normally two primary ways to increase cash flow — increase sales or reduce expenses (of which they’ve done plenty).
Yesterday I got my annual renewal notice in my email box (ironic, isn’t it?). I don’t have any problems paying for products or services when I’m getting the same value in return, but it seems like every day the newspaper gets smaller and there’s a higher ratio of ads to content.
The price for a year of the paper was $195. When you break that down, delivery for only $3.75 a week isn’t a huge cost. Call me a dinosaur, but I love sitting down to read the paper — which takes me a lot less time these days because it’s so small. Plus, by the time I read the paper these days, most of the day’s news has already popped into my email box so it’s old news.
Old habits die hard though 
so I started looking around on the web for the subscription price of the same term, same newspaper for new subscribers.
And I was shocked.
I found the exact same subscription for $117 a year and $52 a year. These were both introductory prices and the price increases at the subscription end to $117/year, however let’s do some simple math. At the $117 price point, new subscribers can get two years for a mere $39 more than a loyal customer will pay for one year. For the $52 subscription, a new subscriber will get two years for $26 less than a loyal customer’s one year renewal.
They have to be losing their shirt on that discounted price.
Discounting your prices to bring new customers in the door is not a smart way to do business. It will have a severe effect on your cash flow in the short term and drive loyal customers away in the long term.
Your loyal customers should be treated like kings and queens. And your cash flow will show the proof.
What do you think? Am I making a big deal out of nothing? Do you think discounting to bring new customers in the door is a good approach? Please leave a comment.
P.S. If you need cash flow help, sign up to get my FREE cash flow tips delivered directly to your email box. Just click here and fill out a simple form to get your free cash flow tips.
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