"Would You Like A Newsletter With That Magazine?"

Chandra Johnson-Greene – www.circman.com

Compared to 2007, this year’s telemarketing vendor survey
reflects a few names changes and business consolidation, as well as a few
upgrades in the types of services offered. Vendors are slightly more inclined
to offer almost everything their clients desire, including Web chatting and
cross selling.

But the focus is not so much on what telemarketing has to offer, but where the
tactic fits in a circulator’s source mix. CM spoke with a variety of
circulators to see how they’re using telemarketing to obtain new subscribers
and retain current ones despite the sluggish economy’s bruising effects on
their budgets as well as on list quality. What’s emerging is a push to sell
more than just the print product.

The Lasting Effects of the BPA Telerecording Rule

When BPA implemented its Telemarketing Recording Rule this past January, there
were a lot of questions among circulators about how it was going to affect
their budgets and response rates. How much extra is it going cost? How will
consumers react? How complicated will the audits be to complete? But despite
all of the apprehension, the circulators CM spoke with seem to be handling the
transition fairly well.

“We’re going through the audit process right now,” says Jeffrey Zabe,
circulation manager, Edgell Communications Inc. “We haven’t really seen much of
a difference in getting people to subscribe or renew. I’ve listened to some of
the recordings and there haven’t really been any objections from consumers. And
as far as working with BPA, it seems to be a pretty smooth transition as far as
us getting the information they need. So far, nothing’s blown up in my face.”

It’s still too early in the year to determine how much of a cost increase
publishers will see as a result of the telerecording rule, but according Zabe,
as well as others, the cost will be minimal at best. And as previously stated
before in CM, “the overall findings of BPA and its Teleservices Advisory
Committee are that they do not expect a drop off in response rates—rather some
expect response rates to rise because it will no longer be necessary to ask a
personal identifier question.” (CM, March 2008, pg. 23)

What circulators should be more concerned about is choosing the right vendor to
do the recording (if your current one doesn’t offer it), according to
circulation consultant Judith Giordano. “I was very concerned because when the
rule first went into effect some vendors began offering lower rates on
recording,” she says. “They would offer $3, $4 or $5 less [per call] than the
others. But they also tended to be the ones that didn’t have the high response
or conversion rates. But overall, every market is sort of affected differently
by the rule. Some may be more affected than others, especially in this economy.
We need a year or two to see what the effect really is.”

Julie Nachtigal, VP, audience development, Cygnus Business Media, says there
hasn’t been a huge amount of concern regarding the rule, but there is another
issue on the table. “The post office traditionally has not counted telemarketing
at the same level as a written request,” she says. “We haven’t been through a
postal audit recently, but from what I understand, if you have telemarketing
sources, the post office will send them a verification letter asking if they
requested the magazine and when. Do you remember when you requested magazine A
versus magazine B? Not many do. This process makes it seem too difficult to
even pass a postal audit.”

Zabe concurs. “I think it’s unfair to the publisher in that it could spark an
unnecessary audit,” he says. “I would prefer that they contact the publisher
directly, and allow us to provide them with the information they need, and
conduct an audit similar to BPA and ABC.”

The Future of Telemarketing As A Subscriber Source

As direct mail response continues to decline and it becomes more difficult to
send faxes without all of the legal hassle, telemarketing—particularly for
b-to-b magazines—continues to be a fairly easy way to obtain new subscribers or
retain current ones.

“We still do a lot of telemarketing even though things seem to be gravitating
towards the Web these days,” Michelle McKeon, circulation manager, PennWell,
says. “It’s maybe not as popular as it used to be, and it’s a bit of a smaller
part of our source mix, but we still rely on it.”

It varies by title, but Internet and telemarketing are the top two sources her
company uses to gain new subs and requals. And McKeon says she doesn’t see that
changing anytime soon. “We don’t have any fears about the costs increasing, but
we are working right now on more creative ways of telemarketing,” she says.

Telemarketing is also working for Cygnus Business Media, according to
Nachtigal. “Based on the number of telemarketing campaigns we did between in
June 2007 and May 2008, our numbers are up 20 percent,” she says.
“Telemarketing is becoming a more popular source for us and is a great part of
our mix. Direct mail is not returning, so we’re having to change things around.
And this is the approach we’re taking.”

Nachtigal added that although her company is performing more campaigns in both
new subs and requals, there has been a decrease in overall list performance. “I
don’t know if it’s list fatigue or whether the quality of the lists aren’t what
they once were,” she says. “But we are experiencing problems with lists when it
comes to both new names and requals. They’re not producing as much as they used
to.”

List quality, in fact, may be the real reason why publishers are seeing a rise
in telemarketing costs. “Everyone in the circulation industry is talking about
how their telemarketing costs are rising, and recording seems to be getting the
blame,” Diza Burnett, VP, business development, American Pacesetters, says.
“The facts are that recording has had little impact if firms were already following
the BPA rules. What is impacting the cost and performance is the quality of the
lists.

“We, and it seems most clients, have noticed a dramatic decrease in terms of
list quality. Essentially, the number of bad and disconnected numbers as well
as the number of people who are no longer at the listed company has really
increased this year. This could be linked to the economy and, perhaps, lists
are not being updated as often as they were in the past.”

It seems, however, that publishers are able to move past any obstacles that
lists may cause. Zabe says that Edgell Communications, which publishes nine
b-to-b titles (six are audited), has been seeing more success since it started
using telemarketing more often. He states that the company has seen about a 30
to 35 percent better response when compared to direct mail. “We were doing a
good mix of requal tip-ons and faxing, but we’ve now cut back on that,” he
says. “Telemarketing is now at the forefront of all of our campaigns, renewal
and new subs.”

Consumer magazines, however, don’t seem to be faring as well. According to
Capell’s Circulation Report, telemarketing is the biggest declining source
based on the last 10 years worth of ABC Publisher Statements. “Fundamental
Changes In Subscription Marketing” (CCR, Vol. 27, No. 14) notes that
telemarketing sold business is off 53 percent from its peak volume year in 1997
of just over 21 million.

While Nachtigal says she hasn’t seen much success with using telemarketing for
consumer titles, Roe Tierney, billing and renewal manager at Consumers Union,
says that it’s working well for the renewal side of the business. “Our volume
has pretty much remained the same during the last 10 years,” she says. “It’s a
big part of our promotion in terms of getting our subscribers to renew. We use
it combination with direct mail and email.”

Tierney says that the company also uses telemarketing for their gift
subscriptions, prompting the givers to renew for their family and friends. “We
make the calls in and around the holidays just as a reminder to them,” she
says. “We say, ‘You’ve given gifts in the past, would you be willing to renew
that gift?’ We’ve seen a lot of success with those campaigns.”

New Telemarketing Strategies

While in the past telemarketing was mainly used to get subscribers to purchase
or renew a title, the industry seems to be moving toward using it to increase
engagement across all media. “Publishers now want to make use of technology, so
we see them wanting follow up the call with an email,” Burnett says. “But it’s
even more than that. They want to extend their brand and not just push for the
magazine. They want us to try and sell subscribers on Webinars, whitepapers and
trade shows too.”

McKeon says that her company’s working on doing just that. “When we were at the
CM show, I was asking my vendors to come up with more ways to drive people to
our Web site,” she says. “I want to them to become partners with us in SEO. So
we’re working on ways to do that. But we’re not just looking at magazine
audiences anymore—we’re looking at newsletter subscribers, Web site users and
show attendees. For the last year or two, we’ve been asking on script if the
subscriber would like to know about what else we offer.”

In fact, McKeon and her team recently did a test with Infostor where they were
able to convert 65 percent of subscribers to the Web via telemarketing. They
also worked with their vendor to convert the international print subscribers of
another title to the digital edition. The campaign resulted in a successful 60-70
percent conversion rate.

But shopping additional products also means more time on the phone, which could
increase costs and annoy the subscriber. “It really depends on what you’re
doing,” Giordano says. “I’ve coordinated at times where, for example, you offer
the e-newsletter after getting them to sign up for the print. But it depends on
how long the subscriber form is in the first place and whether you have time to
explain another product. I’ve always told publishers that the objective is to
sell the subscriber the main product first and then say, “By the way, we want
to make you aware of...’ and if they sound willing, go ahead.”

Zabe is apprehensive of the idea. “I haven’t done any cross selling or cross
promoting with telemarketing because I fear it will drive up costs. I do it
through email or a small amount of direct mail.”    

Choosing A Vendor

The one area that most circulators agree on that’s most important when choosing
a telemarketing vendor is feedback.

“The one thing that helps me determine if I want to work with a vendor is how
responsive they are to me,” Zabe says. “I want to know that if I email or call
them, they will provide a solution or some advice. I want to know what they
might have seen with other clients, even if the publications aren’t totally
related. It turns me off when I have to work with someone who’s just going
through the motions.”

Circulation consultant Judith Giordano offers these additional tips when
looking for a new vendor:

1. Look for a company that’s willing to be tested. The vendor should not be
concerned with being stacked up against someone else.

2. Look for a company that is knowledgeable and understands BPA rules as well
as the fundamentals of circulation marketing.

3. Find a company that’s willing to provide ongoing feedback. You shouldn’t
have to fight for information.

4. Pay attention to how many questions the potential vendor asks you. Be sure
you’re not just another product to them—the representative should be interested
in what you’re doing. You shouldn’t be just another job coming in.