Winning back the newsstand, one territory at a time

Folio: The Magazine for Magazine Management, Feb, 2002 by Geoff Van Dyke

Winning back the newsstand, one territory at a time one small culinary title decided not to stand for its tier-two status and set out to convince wholesalers it could kick it up a notch on the newsstand with some Texas-sized contests.

Two years ago, when magazine wholesalers relegated Chile Pepper to tier-two status and slashed its draw by 25 percent, publisher and co-owner Joel Gregory felt like he was facing the final hand of a Texas Hold 'Em poker game. He could fold his cards and settle for reduced distribution, virtually erasing any hopes for future growth; or, he could fatten his bet and fight for the pot.

Gregory, being from Texas and all, decided to stay in the game. He knew that, given the chance, his magazine could prevail at the newsstand. American palates were changing and spicy culinary trends were spreading like wildfire into the mainstream. With articles like "Squeezin' Out the Cajun Fat. Right!" and 'Born in the USA: The Roots of Chili, an All-American Dish," Chile Pepper was positioned for a circulation bonanza--but didn't stand a chance without the visibility that only the newsstand can provide.

The magazine, which currently has an unaudited circulation of about 80,000, has the potential to reach 500,000, says Gregory. But under its new tier-two status, Chile Pepper forfeited a chunk of its national distribution and was consigned to small regional pockets. It lost outlets in Florida, the Kansas City metro area and California, and was allocated only minimal display in Louisiana, the Pacific Northwest and the St. Louis and Cincinnati metro regions. All told, the magazine lost distribution in 25 percent of local wholesaler agencies.

And that, wasn't sitting well with this particular Texan. Wholesalers heard Chile Pepper, and thought Texas and Mexican food, says Gregory. "That's far from the case. Our biggest circulation state is California. Second is Texas," he says. "But third is very interesting--there are five states jammed together: Illinois, Ohio, Pennsylvania, New York and Florida. Now, a lot of people would not think of, say, Ohio, in terms of zesty, hot spicy food. You think of Chicken Pot Pie."

PIZZA AND PEP RALLIES

To gain back lost ground and work its way into some new dominions, Chile Pepper instituted a program of wholesaler contests. Sales reps charted key areas of attack and went to local wholesalers with a unique pitch for each agency. The team determines the additional draw (usually five to six times the normal allotment) that it believes will be needed for the four-month contest, and Chile Pepper kicks things off with a party in which the rules are explained to drivers and merchandisers.

"They did a very, very large kick-off presentation to our sales associates," says Cindy Kuykendall, distribution manager for Anderson News in Dallas. "They had pizza and they gave away lots of other little prizes---it was like a pep rally. I think it made a big impression on the sales associates because it really made them aware of a title that they'd never given a second thought to."

The driver who has the highest increase in sales, year over year, walks away with the grand prize--such as a weekend trip for two to Cancun. To boost sales, drivers often try to improve the visibility of the magazine by moving it to a more desirable position on retail racks. Drivers also use promotional floor stands to call attention to the magazine. (Secondary prizes, like color TVs, are awarded to merchandisers who have placed the most floor stands during the contest.)

"These [drivers] are very hard-working, modestly compensated people," Gregory says. It pays to offer a little incentive to the people at this level "because they are at the end of the supply chain. They are the people who put the books on the shelves and find new independent positions."

These wholesaler games can be costly, however. "I would have to say that the amount [of money] that we put into this--flying staff around, giving prizes and so on--this was a wash the first year," says Gregory. "It's tough--it's a lot of micromanaging." To date, the contests have cost the magazine about $75,000.

THE PAYOFF

Among the five agencies with whom Chile Pepper first held the contest in 2000, the magazine increased sales from 1,428 to 6,441 copies, or 351 percent. In New Orleans--a town that appears to be tailor-made for Chile Pepper--sales increased from a paltry 139 to 1,142, or 722 percent. In a contest held last year in the Kansas City metro area, where the magazine had not previously been distributed, Chile Pepper sold about 2,700 copies on a draw of 3,500. And the investment keeps on giving when the pep rallies have ended. "The sales continue even after the contest is no longer in place in these agencies," says Bobby Younger, regional sales director at the title's national distributor, Curtis Circulation Company. "It's an ongoing gain because you've picked up the reader during the contest, and that continues right on through."

The outcome of the contests has encouraged Chile Pepper to broaden its scope--20 wholesaler agencies participated this past fall, and the magazine is currently holding contests in Louisiana and the St. Louis and Cincinnati metro areas. Until the contest concept starts to show diminishing returns, Gregory plans to keep pushing Chile Pepper's distribution.