Carrier buy-in improves your home delivery service

Floyd Lewis

This is an idea that will reduce missed deliveries and reduce carrier turnover. It should be paid for by a reduction in carrier rates and a reduction in re-delivery cost.  It worked that way for me in NW Arkansas.

Step one: Review your delivery cost, cost of re-delivery and route subsidies.

Step two: If all routes have a subsidy or base flat earnings, reduce them by the first earnings of your expected cost.  In the example below, $40 a month would be the amount. If your routes have a per piece rate, use a reduction that is close to $40.

Step Three: Meet with your carriers one-on-one with information and examples of how this will affect them.  For their route (not a general info sheet), show the profit reduction based on a month (total dollars).  Then from their present complaints per thousand (CPM), show the expected earnings to be added back, plus the annual CPM earnings. Then show the carrier how many fewer delivery complaints they need to reach the next earnings level, and how that translates to one more step up on earnings because of their improved service.   Any carrier who complains about this program is most likely already providing poor service and probably needs to be let go.

The annual CPM earnings will have more meaning if they are paid during the first week of December.  For carriers who have not delivered for a full year, you can prorate to a monthly amount and multiply by the number of months they were on route.  If the newspaper caused a poor service day (for example, late press), that day is taken out of the calculations. I believe these earnings should be paid by check and distributed at a celebration hosted each month by managers.  Serve donuts, etc. and get upper management to attend.

If your newspaper is all office pay and your carriers receive checks, I would still pay with a separate check, around mid-month when their funds run low.   Of course, should a carrier owe you money, the amount earned could be applied to their bill.

Below are some examples, although your area may need different reward amounts and CPM goals.  Also, once the carriers buy into the program, your CPM per route will likely run between .5 and .9 – so re-delivery cost reduction will need to pay for what the route profit reduction does not cover.  If your customer service is still in house, you may be able to reduce staff or hours to cover some of the cost.  If you give subscribers credit for missed deliveries, the reduction in those credits will help to cover this cost.

EXAMPLES:

Each month your service is below 1.4 CPM, you earn these amounts:

1.3       =          $40                              .9         =          $80

1.1       =          $50                              .5         =          $100

1.0       =          $60                              .3         =          $140

If your average service for the year is below 1.4 CPM, you earn these amounts:

1.3       =          $200                            .9         =          $400

1.1       =          $300                            .5         =          $500

1.0       =          $350                            .3         =          $600

Lewis Floyd is a senior associate with W.B. Grimes & Company, with responsibility for the Southern states.  He may be reached at (850) 532-9466 or lfloydmedia@gmail.com.