Give People What They Want

For Segodnya's Guillermo Schmitt, The Real Success Secret is No Secret At All

By Scott Lewis
Managing Director Willard PR, Kyiv

The advice that Guillermo Schmitt gives newspaper owners should resonate with any marketer:  Give people what they want, rather than producing what you think they want.  If consumers don't see value, the business is doomed.  

It's simple advice - clear, concise, and straightforward - and yet apparently CEOs feel reluctant to heed it.

Schmitt doesn't mind being called a newspaper doctor - the kind of person that publishers hire to transform moribund media into profitable publications - but the former Price Waterhouse consultant doesn't limit himself to newspapers.  

"I was trained to be a company doctor," asserts the 65-year old Argentinean, author of "Turn-Around", a Spanish-language book on the art of refocusing troubled enterprises.

The analogy to a physician is appropriate, given Schmitt's approach. "You examine symptoms carefully, looking for the causes of the problem, then make a diagnosis," he says.

He practiced his brand of business medicine on banks, corporations - even governments - before being tapped in 1994 to become CEO of Argentina's leading newspaper, La Naci?n (The Nation), which he set out to revitalize using the same methods he'd applied to other businesses.

"The basic problem was that they had forgotten about the reader," Schmitt says.  "For example, people said that they wanted a horoscope.  The publisher didn't want a horoscope.  After he left, we added it.  Ask the market what it wants, and comply."

That's what he's done for the last three years at Segodnya, the national daily newspaper owned by Rinat Akhmetov's System Capital Management and the flagship publication of Segodnya Multimedia.  Schmitt commissions regular marketing surveys to learn what readers want from the paper, and then respond in kind.

"The surveys say that readers want the newspaper to carry the latest news, to be informative, to have an easy style of writing, to be popular, positive, useful, interesting, impartial, and family oriented.  Do we give them that?  We succeed more than our competitors.  Our market share, based on circulation in the largest cities of Ukraine, has increased: In 2006, we had 39 percent, Fakty had 40 percent, and Komsomolskaya Pravda had 21 percent.  Today, we have 52 percent of the market.  Fakty has dropped to 25 percent and Komsomolskaya Pravda is 23 percent."

He's convinced these numbers are genuine because the company has sources at competitors' printing plants who disclose the size of press runs - a business intelligence coup that trumps traditional circulation audits.

"If I were the owner of Fakty, I'd be very worried," Schmitt said. "Komsomolskaya Pravda is worried.  They just changed their editor."

Schmitt believes the increase in market share and growth in advertising revenue reflects well on the changes he's made at the paper.  "It doesn't seem reasonable to change course," he says.

Some of the changes were easy to implement, others came about more slowly.

"I fought against yellow press for two years," he said, referring to his effort to erase scandal and sensationalism from Segodnya's pages.  

"In the USSR, people got out of the habit of reading.  The Communist Party put an emphasis on scandal and crimes so that journalists wouldn't focus on real problems," Schmitt said.  "We needed to change that attitude. In the past, someone would call the newsroom and a journalist would run to cover a suicide in the metro.  We don't cover those stories anymore."

The newspaper also has strict ethical guidelines.  Reporters can't accept cash to write favorable stories, and the publication doesn't accept paid stories or advertorials.

Schmitt has three years remaining on his contract and before he leaves he intends to train his replacement.  He believes strongly in the training that MBA students receive, and the company is investing heavily in training a new generation of managers.

"Use the best technology, hire the best people, give them the best training and listen to the market," Schmitt says.  "Today, our mission is simple: Serve the people.  That includes readers, advertisers and the community."