Gannett Shoots Straight -- Into Foot

May 3, 2009, 10:00 a.m.; May 23, 2009, 10:00 a.m. (addition of "The Final Chapter")
[Looking for the April 26, 27, 28, 29, 30, Swine Flu blog entry? Click here.]

68-Year-Old Subscription Cancelled:
Seinfeld, Tomlin, and Bedbug Letter Explain Why
(brought to you by FromDC2Iowa.blogspot.com*)

Contents
Our Problems With Newspaper Delivery Solved; Industry's Problems Continue
It's Gannett's Policy; Future of Industry
No Business is Perfect; It's How it Responds to Problems
Jerry Seinfeld's Take on Gannett's Policy
Customer Relations
. "How can I make this right with you?"
. Southwest Airlines
. Lilly Tomlin's Take on Gannett's Customer Relations
Email Exchanges Between Mary and "The Corporation"
. Mary Gets "the bedbug letter"
Gannett CEO Craig "Consumer Centric" DuBow's Promises
The Final Chapter

For 68 years some family member living in our family home has been paying the subscription price for a particular Iowa newspaper, now owned by Gannett. For the past 19 years I have been, once again, living in that home and my wife has been paying for that paper.

Two days ago that 68-year history came to an end.

My wife and I divide the chores around the house. I get the easy jobs -- the daily cleaning of two cat litter boxes, taking out the trash, sweeping the patio -- tasks someone with my limited abilities can handle.

She has the hard jobs, and says the most difficult of all is dealing with Gannett's computerized "customer service."

We've had problems before with newspaper delivery. See Nicholas Johnson, "Of Newspapers and Nails," March 8, 2009; Nicholas Johnson, "Newspaper Delivery an Update," March 27, 2009. The problems I wrote about in those blog entries involved the "multiple-variable delivery problem." If a newspaper subscriber can't know (a) whether the paper is going to be delivered at all or not on a given day, and (b) if it is going to be delivered, when that might be, and (c) where it might be found on the property, that subscriber must look for the paper each morning in a variety of possible places, at a variety of different times.

Since writing those blog entries I have been stunned at the number of people who have told me similar stories of their problems with delivery -- a number of whom have simply canceled their subscriptions in frustration.

That is, stunned until I've come to realize that this is an industry-wide problem. Put "newspaper delivery problems" (without quotes) into Google and you get 18,500,000 hits. I don't know whether newspaper delivery problems exist inside Second Life, but there is apparently a Second Life-like children's Web site, WebKinzInsider.com, in which there is a forum for "employment/newspaper delivery problems."

For us, since those blog entries were posted the delivery problems have, for the most part, disappeared. Indeed, while we never insisted that the paper be within arm's reach from the kitchen door (only that it be in the same place each day at roughly the same time) it has actually been showing up at the door and usually a few minutes before or after 5:00 a.m. No more complaints on that score. We were getting excellent service from the carrier.

No, the problem that finally pushed Mary over the edge was not a delivery problem -- at least not in the usual sense. It was a problem of (a) Gannett corporate policy, and (b) take-it-or-leave-it customer relations.

For her it was frustration, leading finally to anger, and then to action -- canceling the 68-year-old subscription.

For me, today's blog entry is about the future of the newspaper industry -- not the future of a given newspaper, let alone a given subscriber's relationship to that newspaper. I think newspapers -- journalism, and especially investigative journalism -- are important to democracy. Like the U.S. automobile industry, the newspaper industry confronts both (a) serious problems not of its own making, but also (b) problems it has, unnecessarily, brought upon itself.

So, however much I may love my wife, and wish that she not have to suffer frustration and anger, this story is not about her. It is, rather, a case study in the disappearance of American newspapers.

She (and I) are aware that no business, whether manufacturing or service, can deliver perfection. No matter how good the corporation's quality control there will always be defective products and sub-par service: delayed flights -- and missed newspaper deliveries.

Like any other business this creates three separate challenges and needs for the newspaper industry:

1. Quality control techniques designed to minimize the number of days that subscribers are not provided a paper

2. A procedure for providing a prompt supplementary, special delivery to those subscribers who call the paper to report non-delivery on any given day

3. Trained personnel to handle those calls in friendly and understanding ways that will retain customer loyalty

The reason I identify the paper as a "Gannett paper" is because I have the suspicion that those employed by the individual newspaper in question would probably have handled these three challenges differently, and thus that the policies and practices are probably those of the parent corporation.

It turns out that Gannett's new non-delivery policy is that when a subscriber calls to report a non-delivery, (a) the subscriber must talk to a computer (that has always been the case), (b) the computer informs the subscriber that they have two, and only two, choices: (1) have the paper delivered the next day, or (2) receive a refund for one paper, and (c) those subscribers tenacious enough to fight their way through to a human being will receive a Marine Corps drill sergeant's warm understanding.

When I heard of my wife's experience, and read what was ultimately her exchange of emails with the Gannett computer, I was reminded of a couple of old television bits. One is the Seinfeld episode when Jerry and Elaine went to pick up his rental car.

Gannett's policy seems to have been developed by someone totally unfamiliar with the business in which its newspapers are engaged. Those loyal readers who have been hanging on and providing their support to the industry are buying a service (not a product): it is the timely, daily, receipt of a paper and ink report of the news, delivered to their homes or offices (hopefully sufficiently early in the morning that it can be read before going to work). Subscribing to a daily newspaper means subscribers want, and assume they are buying, a continuous, daily, stream of this service. That doesn't mean there won't ever be a day when, for some reason, it doesn't arrive at the usual time. What it does mean is that when that happens, and is reported (hopefully to a human rather than a computer), the paper will make an immediate effort to get it there as quickly as possible.

Here's a transcript of the relevant excerpt from the Seinfeld episode, followed by a YouTube video.

Agent: I'm sorry, we have no mid-size available at the moment.

Jerry: I don't understand, I made a reservation, do you have my reservation?

Agent: Yes, we do, unfortunately we ran out of cars.

Jerry: But the reservation keeps the car here. That's why you have the reservation.

Agent: I know why we have reservations.

Jerry: I don't think you do. If you did, I'd have a car. See, you know how to take the reservation, you just don't know how to hold the reservation and that's really the most important part of the reservation, the holding. Anybody can just take them.

Larry David and Bill Masters, "The Alternate Side," Season 3, Episode 11, broadcast December 4, 1991.



That's kind of analogous to Gannett's problem. They understand the part about how to take the subscription, and the part about getting their money for the subscription, they just don't understand the part about providing the daily service.

The next problem Gannett has is customer relations.

It's a subject I became interested in when serving on the school board and wishing to bring the school district's customer service up to the level of what I called (to the irritation of my fellow board members) "the Wal-Mart standard." ("If Wal-Mart can provide that level of customer focus by training high school dropouts why can't we do it with college graduates?")

A friend with experience as a convenience store manager told me of the training he'd received. Whenever a customer came into the store with a complaint the manager was instructed to say to the customer, with compassion, "How can I make this right with you?" Nine times out of ten, he told me, that was enough to satisfy customers who were primarily just requesting understanding and respect.

And then there is the legendary Southwest Airlines. "'We literally say that we hire for attitude and we train for skill,' said [Southwest's CEO Colleen] Barrett, quickly reassuring the audience that Southwest only brings in top-notch pilots and mechanics. 'And we are far more likely to terminate someone for attitude and behavior and lack of respect than just about anything else.'" "Southwest Airlines' Colleen Barrett Flies High on Fuel Hedging and 'Servant Leadership,'" Knowledge@Wharton/Leadership & Change, July 9, 2008. "Southwest's unusual and now legendary approach to customer service . . . aims to treat the company's 35,000 employees like family, to make the workplace fun -- and then to carry that upbeat attitude to consumers. . . . 'Our mission statement is posted every three feet . . . It's to follow the Golden Rule -- to treat people the way that you want to be treated, and pretty much everything will fall into place.'"

Gannett's take-it-or-leave-it approach reminded me of a famous bit from a very early "Saturday Night Live." Here's an excerpt from the transcript, followed by an incomplete YouTube video (without the "we don't care" line) that will at least give a sense of the performance.

Ernestine: A gracious hello. Here at the Phone Company, we handle eighty-four billion calls a year. Serving everyone from presidents and kings to the scum of the earth. So, we realize that, every so often, you can't get an operator, or for no apparent reason your phone goes out of order, or perhaps you get charged for a call you didn't make. We don't care!

Watch this... [she hits buttons maniacally] We just lost Peoria.

You see, this phone system consists of a multi-billion-dollar matrix of space age technology that is so sophisticated -- [she hits buttons with her elbows] even we can't handle it. But that's your problem, isn't it? So, the next time you complain about your phone service, why don't you try using two Dixie cups with a string? We don't care. We don't have to. We're the Phone Company.

Lilly Tomlin and James Taylor, "The Phone Company," Saturday Night Live, Season 2, Episode 1, 1976 (Ernestine, Lilly Tomlin; Technician in background, Al Franken).



That's kind of Gannett's attitude: "Those are your two options. You don't like 'em? Tough. We don't care. We don't have to. We're a newspaper monopoly." Except it's not. And it's losing customers. And there's still a newspaper outside our kitchen door -- it's just not theirs.

Here are excerpts from the email exchanges between Mary and The Corporation. (Gannett employees names have been deleted; there is no purpose or desire to embarrass any named individual. This is a matter of corporate policy and behavior.)

Introduction: Mary's description of how it began.

There was no paper the morning of May 1. I called the 800 number. The automated response asked for telephone number beginning with area code. It then asked for address. I responded to a list of computer voice options saying it was a delivery issue. The automatic response asked if I wanted the paper delivered tomorrow or a refund for today. I said neither, that I want the paper today. After several tries I was connected with a live person who asked for my telephone number and address and then asked rather brusquely what the problem was. I said I had responded to the automated thing and was told that my only two options were as mentioned above. The person said that if that is what the computer told me that was how it was. I explained that I liked to have the paper on the day it was printed and that it wouldn’t do to have it the next day. The person repeated that that was just the way it is. We had a few more exchanges until I said I really did think it was time to cancel. The person's only response was “fine.” There was no "How can we make this right with you?" There was no, "I really understand your frustration. I'm not someone who is able to do anything about it but here's how you can register your complaint with someone who might be able to." Just, "that's the way it is," and "fine."

The first email. 8:50 a.m.

We did not get our paper this morning. I called the 1-800 number and was told that my only two options were to receive the paper tomorrow or receive a refund. That, of course, is not acceptable. I then talked with a live person who explained rather tersely that if the automated response gave me those two options then those were the only two choices. This was so frustrating. No reasons were given for why the paper was not delivered nor were any given for why none would be delivered today. I felt that the only choice at that time was to cancel. We have been customers for years and this is not an easy thing to do. If you can give me a rational explanation and assure me that this will not happen again I will, of course, resubscribe.
Mary

First reply. 1:39 p.m.

Dear Mr . . .,

[NJ: Why someone named "Mary" would be addressed as "Mr" is beyond me, unless the Gannett representative thought "Mary" was also used as a man's name.]

Thank you for contacting the [Gannett paper]. Miss it once...MISS A LOT! We appreciate your business and apologize for our poor delivery service.

[NJ: "Miss it once . . . MISS A LOT!" seems an odd motto to include in responding to a subscriber who has just made precisely that point.]

We certainly want to address this immediately. I will get this matter resolved to your satisfaction. It is our goal to make sure we are meeting the needs of our subscribers.

I have contacted your current carrier about this matter,as well as our circulatory department. We apologize for the inconvenience you have experienced and have taken necessary steps to insure this matter comes to an end. If you have any further questions or would like to give home delivery another try please contact to further assist you. We hate to lose you as a customer and hope to hear from you soon. Have a great day!

Please allow us to take care of this matter promptly so you can continue to enjoy the convenience of home delivery.

Sincerely, . . .

[NJ: As will soon be made clear, this response totally misses the mark. The concern was not with a single day's missed paper; the concern was with the corporate policy that provides no option for its same-day delivery in cases of non-delivery. As a response it is, therefore, even worse than the Pullman car passenger's complaint about bedbugs in his roomette.

You know the story? The passenger got a reply from the Pullman Company CEO, "a letter so courteous and logical that he was greatly soothed." It explained that they had never had bedbug complaints before, could not imagine how this could have happened, that they were sure it would never happen again, and that they hoped he would continue to travel by train.

He then discovered that his letter to the company had inadvertently been enclosed in the envelope along with the CEO's letter to him. In the margin was scribbled in pencil, "Send this guy the bedbug letter." Anonymous, Jokes for All Occasions, BiblioBazaar, LLC, 2008, p. 107.

Gannett's reply was, in effect, "Send this man (named "Mary") 'the bedbug email.'" (Except for the fact the bedbug letter at least addressed the customer's complaint; the Gannett reply did not even do that.)]

The second email. 6:11 p.m.

I want to be clear. It was not the failure of delivery. One expects that to happen now and then. My complaint was specifically about your policy not to bring the paper to the customer on the DAY of the paper. Your options were either to have the paper delivered the next day or to have a refund for that day. THAT is what was unacceptable. In the past the paper was brought out right away after a report of a missed delivery. If you can assure me that your policy of not making same day delivery has changed I will certainly continue with the [Gannett paper].
Mary (not Mr.)

The Second Reply. 6:23 p.m.

Dear Ms. . . .,

Thank you for contacting the Iowa City Press-Citizen. Miss it once...MISS A LOT!

I apologize for the inconvenience. We did offer re-delivery in the past. I understand your frustration but the cost of doing business continues to grow and as a result we've had to make some difficult decisions. We are no longer able to offer re-delivery Monday through Friday. It is our goal to continue providing you with a high quality newspaper at a low price. To ensure this error does not occur again, I have notified the carrier. Please feel free to reply to this e-mail if I may be of further assistance.

Sincerely,

The Third (and last) Email. May 2, 7:28 a.m.

It is obvious that you have never understood the nature of my complaint. My complaint to you and my decision to cancel my subscription is NOT because of the carrier. I understand that there are occasions when papers are not delivered. My sole reason for canceling is your policy of NOT redelivering the PC on the day it was missed. I think customer satisfaction plays a big part in your business and it looks like you are being penny wise and pound foolish.

Mary

Gannett CEO Craig A. Dubow explains to shareholders Gannett's "customer centric," "customer-based," goal to "link our efforts better to customer desires," "focused on the customer's wants and needs," "delivering the content customers want"

The basic principles of our strategy are these: Become customer centric in everything we do. . . .

Another key strategic goal for Gannett is to become a digital powerhouse. In 2008, we achieved a major milestone in this regard by making more than $1 billion pro forma in digital revenues across all our divisions. . . .

In Detroit, while producing award-winning journalism, they also were busy creating a whole new approach to the business of newspapers. We believe this innovative, customer-based method will lead the way for our industry.

Again, the changes to our newspapers were done with an eye to the strategic plan’s goal of becoming leaner, faster and much more focused on the customers’ wants and needs. . . .

As you know, in 2008 we had operating revenues of nearly $6.8 billion and operating cash flow of nearly $1.5 billion. . . .

At the same time, we need to link our efforts better with customer desires. In 2009, you will see us providing content verticals that reach into the hearts and minds of our customers in ways we haven’t before. . . .

We are very customer focused, delivering the content customers want on any platform they want it.

Excerpts from Remarks by Craig A. Dubow, Chairman, President and Chief Executive Officer, Gannett Annual Shareholder’s Meeting, April 28, 2009.

Think about it. Here is a newspaper company, with revenues of nearly $7 billion a year, that has as one of the "basic principles of [its] strategy [to] become customer centric in everything we do." Wouldn't you think that it could afford to make one of those things, among its "everything we do," the delivery of its daily papers to subscribers?

The Final Chapter

Like all stories this one, too, has a final chapter.

It has turned out that it is as hard for Gannett to carry through with a cancellation of a newspaper subscription as it is for it to deliver a paper to a subscriber whose paper doesn't arrive on any given day -- or to rethink a "cost savings" policy that results in subscribers not receiving their papers on the day of publication.

Bear in mind, as set forth above, the subscription was canceled, by phone, on May 1. A credit to the subscriber's bank account (for the subscription price of the papers paid for but that would not be received) occurred a couple of days later. Emails from Gannett indicated that the carrier had been communicated with.

And yet the paper continued to arrive -- May 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 -- then for some reason skipped the 15th and 16th, came again on the 17th, skipped the 18th, came again on the 19th, and then finally stopped, apparently for good, on the 20th.

The newspapers -- virtually all newspapers, not just Gannett's -- are in economic trouble. Their subscribers are drifting away -- and dying off -- and not being replaced by a younger generation of readers. The papers are giving away their copy for free on the Internet. They've lost classified advertising revenue to Craig's List and other online services. They've lost commercial advertising both to other media and because of the recession that's caused all businesses to cut back on expenses generally.

They need new business models, because we clearly need their investigative reporting for democracy to survive (and for bloggers to have source material!). Firing journalists from news bureaus that were often understaffed in the best of times is neither a solution nor a business model -- regardless of what Wall Street thinks.

What they clearly can do is to continue to serve the declining subscriber base they have, rather than alienate them.

And it is, among other things, sad that Gannett has chosen not to do so in this case. For Mary was not one to bad mouth the paper in question, as some Iowa City residents do. She liked the paper. Really looked forward to reading it thoroughly each morning. Liked the local coverage, the editorial and op ed pages. She's a computer whiz, and is still getting the news online. But she's not happy about it. She was happy to pay for the pleasure of holding the hard copy newspaper in her hands as her parents and grandparents had done before her.

It is Gannett that abandoned her, rather than the other way around. And if the email and conversations I've had since writing this are any guide, they've abandoned a great many other formerly loyal subscribers as well.
_______________

* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself. -- Nicholas Johnson

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