Joining Bellatrix in the newspaper market is MJ Systems of Charlottesville, Va., which is so well-established in magazine distribution that it claims 50 percent of that market in North America.

Also pursuing newspaper clients is DMS/Plus Automation of Margate, Fla., which uses the same device as MJ Systems, the European-made Psion computer. (MJ charges $1200 per copy; the DMS price is $700.)

Canada's Newspaper Technologies Inc. of Calgary, Alberta, markets a different kind of hand-held device, a "palm-top" computer that uses a pen instead of a keypad. It's backed up by the Newsline collection of data-crunching software.

When a driver hits the road with an MJ Systems Route Max Psion, he or she has a little workhorse riding along. Its playing card-size screen can deliver daily messages to each driver or all drivers. Detailed instructions for following a route can be called up from its 1-megabyte memory.

At each vending box or rack location, the driver uses the keypad to put in critical numbers -- draw, returns, cash collected -- and to extract such information as each location's sales history. The system can be configured for two-way real-time communication with the circulation department, but most operations rely on an end-of-day batch dump to a database through a cradle, or over a modem connection.

The Bellatrix system is more substantial, and yields somewhat greater detail about sales. Newspapers can install Coin Wizard cash mechanisms in each vending box and optionally attach a chip that will record the time of each sale, a feature not found in other systems.

Included is an infrared system which transmits data from the box to a second-generation wand carried by the driver; the wand doubles as a rack-sales entry device through a keypad. A newspaper can spend as much as $150,000 to go the full Bellatrix route.

What do newspapers get for their money?

The Daily Oklahoman in Oklahoma City has been a Bellatrix customer for almost a decade. In a nutshell, the system provides data to show "how many papers are sold at a particular location, how many were left, how many were stolen and how much money the rack takes in," said Ciri Corbin, a single-copy sales clerk.

Comprehensive information -- including time-stamped sales to map the peaks and valleys of single-copy purchases -- comes to her desk about three days after it was recorded, Corbin said. Each Friday, for example, "I look at the information for last Tuesday and I project draws for next Tuesday," quickly and accurately, she said.

At the Chicago Tribune, which began working with DMS/Plus in 1989, "we used to focus on managing the returns, because wasted newsprint is very expensive," said Mike Schneider, single-copy field operations manager. "With this system, we're focusing on managing the sale. It's a whole new way of looking at it."

Single-copy numbers under control
Why would a newspaper lay out big bucks to provide drivers with "a new toy," as one newspaper executive affectionately called the hand-held computers? Simple:

"It solves the problem of allocating the copies directly for single-copy sales and it reduces the paperwork for recording the sales at each location. In fact, it eliminates the paperwork at each location," said Les Feasey, MJ Systems director of business development.

In addition, because the system replaces "intuitive judgements" about single-copy sales with "rapid feedback" provided by the growing database of sales, Feasey said, sales go up and losses go down.

"For example, every Friday there's going to be a ball game at the ball park," Feasey said. "For those locations that are near the ball park, you need to increase the draw and you need to have a reliable mechanism for recording those sales."

Using MJ Systems, USA Today is exploring computerized data collection in Miami, Philadelphia and Washington, D.C.

"You can leverage the power of a computer to help you predict future sales based on computer programs that take into account sales history. That was very hard manually," said Allen Haws, manager of circulation systems at the national newspaper's offices in Arlington, Va.

A USA Today distributor may have as many as 200 locations to manage, and before on-site data entry allowed an expansion of sales history, decisions were made on the previous three weeks' sales.

Better days lie ahead.

"A computer can go back three, five, 15, 30 weeks and use that history to predict a more accurate sale," Haws said. Because the program can weight certain weeks more than others, "it smooths out the peaks and valleys."

(MJ Systems tailored its software to handle USA Today's range of draws. The algorithm used to provide an optimum draw "had to be sensitive to small sales," Feasey said -- as few as three at some locations.)

MJ Systems uses a finger-based data entry system, as opposed to Bellatrix Systems' infrared reader, so the possibility of keying in a wrong number exists.

"What we're finding is that that's more accurate than the traditional manual method, which involved in our case writing it on a piece of paper and then calling it in or writing us," Haws said. "If anything, our accuracy has improved because you have less hand-off of manual information."

Building a database of just about everyone
One newspaper anticipates creating a comprehensive market-wide database once it begins on-site data entry. The Spokesman-Review of Spokane, Wash., is ramping up with Newspaper Technologies Inc., which offers a pen-based hand-held computer for data entry.

"It's going to be a great marketing tool once we get the whole system in place," said Circulation Manager Bob Thomas. NTI and The Spokesman-Review already have worked up a database for the paper's TMC distribution. Combined with the upcoming flood of data from single-copy sales and NTI's home delivery module due to start running in October, the paper will have a detailed map of its market -- subscribers and nonsubscribers alike.

"We've always been in the database marketing field, trying to segment the market and deal with people's interests so we can offer them packages that would interest them," Thomas said.

While he doesn't expect to learn much new about single-copy sales ("it's historical data that we get anyway"), Thomas looks forward to timeliness.

"It's not going to help us a whole lot on adjusting the draw to minimize returns," he said, "but we will be able to see that sooner than when we normally would."

On-location printing a big draw
Immediacy is appreciated by customers and distributors alike.

With hand-held devices, delivery people can print out that day's record, "where in the past you were limited to invoices that were preprinted several hours, days or weeks" before, Haws said. Inaccurate invoices could go one full billing cycle before being corrected, during which time one party or the other in the transaction was paying too much or too little.

"It's really a customer service issue," Haws said. "With a computer you're able to resolve any billing issue on-site and simultaneously print a correct receipt and transmit that correction back to the home office."

The same thinking prevails at DMS/Plus. The ability to print lists, invoices, receipts and run sheets on demand is an enormously popular feature, said Ken Schmidt, the company's technical support and resource manager.

"This printing thing has really become huge," he said. Drivers "love the fact they can walk into a store with a hand-held printer and just print the bill on the spot."

In addition, they can print run lists on demand, which is useful when working with a "Sunday helper" who assists with that day's heavy load.

Tribune Co. contracted with DMS/Plus to supply hand-held devices and on-line data massaging to its four newspapers in Florida, Illinois and Virginia. (The Dallas Morning News and Detroit Newspaper Agency, the JOA of the News and Free Press, are testing DMS products now, Schmidt reported.)

While DMS uses a hand-held device similar to the one offered by MJ Systems, they part company when it comes to data gathering and manipulation: DMS takes responsibility for storing records for each of its client papers.

"We have an on-line dedicated network," Schmidt said, which is accessed through http://www.singlecopy.com/. "We don't sell traditional software and install it on-site. We install the pieces to get the data to us."

One advantage is that no client ever has to hassle with software upgrades; they all occur at the host site.

Another is that DMS can train users in the environment they'll be using.

"We can be sure people are doing the right things on-line," Schmidt said. "We can be sure they're using the software the way they want to use it."

Using that software in its own way is the Tribune, which has a two-tiered data collection operation. City drivers are employees, and they dump their data every day. Suburban locations are managed by independent contractors, who send in records weekly.

This methodology acknowledges the differences between the markets, Schneider said, since suburban distributors "sometimes don't collect returns every day."

The Tribune has accumulated two years' worth of data which Schneider delves into for such things as sales on a group-outlet basis -- say, the White Hen Pantry chain of convenience stores in Chicagoland.

"We're getting some trends. We know that we can expect White Hen to sell more papers on [a Friday] Christmas Day than they possibly would on a normal Friday."

These reviews aren't made only day-to-day; year-to-year comparisons have brought to light unexpected things. Schneider cited commuter station sales, for example, where in the past extra papers were distributed on what was deemed an event day.

On an event day, such as one with a Chicago Bulls game, "we find that sales might be the least affected" at commuter stops, he said.

A rare appearance by a much-loved term
Nowadays, few suppliers can trot out ROI -- return on investment -- as a definitive reason for buying a product.

Bellatrix can.

"We can say we project that we can reduce returns by X amount, increase sales by X amount and provide these benefits," Morris said. A newspaper contemplating an outlay of $150,000 might like to know how long it will take to recoup that investment, and in most cases, the ROI is realized in 18 months or so.

"We've had papers who've had ROI in less than a year," Morris said, which in some cases has included showing how to reduce the number of circulation trucks needed. But for some publishers, that isn't the issue -- "some want the element of control and don't care about ROI."

One element of that ROI is theft patrol. With Bellatrix, "we can determine the difference between cash theft and paper theft," Morris said, because the system provides a cash audit trail.

The Sacramento Bee realized savings when Bellatrix went on-line there about four years ago, said Brad Perrault, single-copy sales and technology manager.

"Our cash yield was up from two to three percent just by keeping people honest," he said. Distribution to the Bee's 1500 locations is handled by employees, not contractors, "and you don't suspect that they're going to be taking money from the newsstands, but just the fact that they knew that we were auditing them" cut losses.

"Now that we know what our sales are from each location, by default we know that we put 20 papers in a rack, we only got 15 sales and we had only one return. If you do the math on that, what happened to the other three or four papers?"

Chris Hunter, Perrault's administrative assistant who works up close and personal with single-copy sales data, cited the automatic time stamp and detailed cash reports as useful, both for adjusting draws "a little more exactingly" and for tracking losses.

"It highlights if there's a discrepancy, so the sales manager can see if there's a particular problem with this rack," Hunter said. "If there is a problem, we've done things like stake out racks to see if we can catch a particular repeat offender -- that happens quite a bit, actually."

DMS/Plus reports its system has an immediate impact on the bottom line -- newspapers have reported a one percent increase in circulation and a one percent decrease in returns, Schmidt said.

"The big issue is timing. In the past, if you didn't have a system it would take you a good two, three weeks to accumulate any data you were looking for.

"Now, immediately after closing out last week, they can identify where the sales are."

-- Pete Wetmore

Bellatrix Systems,
(541) 382-2208,
e-mail: bellatrix@empnet.com;
DMS/Plus Automation,
(954) 340-7318;
MJ Systems,
(804) 977-2732,
e-mail: lcreasy@mjsi.com;
Newspaper Technologies Inc.,
(403) 234-0230,
e-mail: jacquies@nti.ca.

Also see Mechanism is a supplier's sales booster

From THE COLE PAPERS, September 1997, Copyright © 1997, All Rights Reserved.