Customer service matters. We know that from our personal experience as consumers. All of us at some stage have also been on the end of the phone line when an irate subscriber has called in to complain. Yet the importance of customer service is also a well researched fact. PPA research shows that 62% of readers with an active magazine subscription claim that the quality of the subscription service influenced their decision to renew (Source: PPA & Brandlab: The Loyalty Challenge). That is a powerful and worrying statistic.
Within every subscription file, there are different levels of loyalty and commitment as the table below, also from The Loyalty Challenge demonstrates.
| Do you plan to renew your subscription to this magazine when it is due? | |
| Yes. I will definitely renew. | 54 |
| Yes. I will probably renew. | 25 |
| I haven’t decided yet. | 16 |
| No. I will probably not renew. | 3 |
| No. I will definitely not renew. | 2 |
| Total | 100 |
| Base: Magazine Subscribers | |
Only 5% of subscribers have actually made the conscious decision to opt out and not to renew. The remaining 95% are at various degrees of indecision. That is the context within which customer service sits and why it matters.
That is also the context for Dovetail’s Subscriber Service Survey which polls the views of active paid subscribers with regards to the different dimensions of their subscription service. The first survey was in 2007 as a Dovetail initiative involving five of our publisher clients. In 2008, it grew to cover 330 titles across 42 publishers who were a mix of Dovetail clients and external publishers, including many of the UK’s major consumer publishers. The 2008 survey gathered the views of over 68,000 active paid subscribers – the largest survey of its kind in the UK. The aim has been to provide consistent measures across a wide range of markets which can then be tracked through time from year to year so that publishers have a framework within which to assess customer service standards more objectively and to place them within a broader "subscription experience". So far, we have concentrated on Physical Delivery and Inbound Subscription Service as the two prime areas of Subscribing, but we intend to broaden this out in future years.
How many subscribers intend to renew?
We started by asking a very simple question: do you intend to renew your current subscription? The number who said "yes" has slipped slightly year on year by 1.5 percentage points: an indication of reducing loyalty in the subscription market generally. Yet what was fascinating was the very wide range of figures, title by title, with a 30% spread from top to bottom. This immediately set the alarm bells ringing for a number of titles at the bottom end!
Of those who intended to lapse, the biggest single reason given (32% of intending lapsers) was cost which was up by 10 full percentage points year on year, showing the increasing price-awareness and price-sensitivity of magazine readers generally.
What are the key factors influencing renewal intentions?
* A key factor, with a 9% spread in renewal intention percentages from the top to the bottom, was the length of time that the subscriber had been subscribing to the title. It is a subscription truism that the longer the length of time a person has been subscribing, the more likely they are to renew. Yet the survey results underline the critical importance of building the subscription relationship early in the lifetime.
* Of slightly less importance, with a 7% spread in renewal intention percentages, is the subscription payment method. Direct debit payers are the most likely to say their intention is to renew, but only slightly more than credit card payers who say they will renew. Credit card payers are almost as loyal as direct debit payers: it is simply that the direct debit mechanism helps to lock consumers in when it comes to actually paying up the cash. The table shows the profile of payment method across all 330 titles. While the figures vary massively from title to title depending on the profile of the consumer and the strategy of the individual title, there is a clear trend towards direct debit across the whole industry.
| Payment Method | % of Total Subs |
| Direct debit | 58 |
| Credit / debit card | 30 |
| Gift sub | 5 |
| Cheque | 6 |
| Invoice | 1 |
| Total | 100 |
| Source: 2008 Subscriber Service Survey | |
* Much more influential as a factor (with a 16% spread in renewal intentions), predictably, is the original reason for subscribing. Those who wanted to subscribe for service factors such as "guaranteed copies", "early delivery" or "convenience" have much higher renewal intentions than price-driven subscribers or those who received a free gift.
* Yet the core statistic is that those who are "very satisfied" with the core subscriber service have renewal intentions that are 19 clear percentage points higher than those who are "dissatisfied." So, the quality of the subscriber service makes a real difference to renewal levels.
The survey then digs into great detail about different service issues. A key conclusion is that only 20-25% of subscribers who have experienced a service problem actually bother to complain about it. Publisher customer service teams only see the tip of a very large iceberg.
Delivery problems make a difference
Take delivery problems as an example. Here, the most common issue is late delivery which affects 16% of subscribers. Thankfully, the incidence of this has dropped from 20% in the previous year’s survey. Only 19% of those who have had a problem actually complain. Yet subscribers appear relatively forgiving of late delivery with renewal intentions among those who have had a problem only three percentage points lower than those who have never had a problem. What does appear to register more strongly is a long wait for the first issue of the subscription: 6% of consumers recorded this as a problem and 18% complained about it, but this is the delivery factor that has the biggest impact on renewal intentions, pulling the scores down by nine percentage points.
Service problems make more of a difference
If the consumer is relatively forgiving of delivery problems, they are much less tolerant of areas which they see as the clear responsibility of the publisher or the bureau – eg. credit card being debited incorrectly, address details recorded wrongly, etc. Two areas in particular stand out as impacting on the intention to renew. The first is when the expiry date on the renewal documentation is not clearly stated, emphasising the sensitivity of the whole renewal process, when subscribers want facts, not the wool pulled over their eyes. The second is late initial order acknowledgement, underlining the importance of those early first contacts in the subscription relationship which shape the consumer’s whole perspective and have a lasting effect on the decision to renew.
The appeal of online self-service
A key finding is the high satisfaction scores achieved by the online subscriber self-service areas now operated by the major players – the main applications are shown in the table below.
| Website Used For.... | % of Web Users |
| Renew sub | 40 |
| Check number of issues left | 32 |
| Change of address | 30 |
| Check last / next payment | 18 |
| Check last issue sent | 15 |
| Other | 10 |
| Source: 2008 Subscriber Service Survey | |
Consumers clearly like the service and feel very comfortable with it, but awareness levels are still relatively low – only 54% of the sample know about the self-service option. So, a key action point for publishers is to promote the whole service more prominently.
Looking across the industry
One of the benefits of such a broad-based survey is the ability to make comparisons across such a wide range of titles and their bureaux. An important conclusion is that subscription service standards generally are considered by the consumer to be relatively high, scoring an average 8.5 out of 10, with little appreciable difference between the major subscription bureaux – in a sense a disappointment for Dovetail, where we pride ourselves on our obsession with customer service, but it would have been a surprise if we had been light years ahead of our competitors! Another important conclusion is that service levels are generally edging up while consumers are also becoming more likely to complain when things go wrong.
Information for action
The exciting thing about this whole project is that it is not abstract or theoretical. The publishers who have taken part in both waves of the project have seen improvements in their service scores year on year. This is because they have taken practical actions in the intervening period – altering publishing schedules to improve subscription delivery times, promoting the online self-service option in the magazine, etc.
Conclusions
The survey provides a number of additional and more detailed insights. For example, we have consumers’ views on their subscription incentives: 36% of the sample had received a gift and their view of its quality was solid (7.6 out of 10) rather than strong.
Yet, standing back from the detail, what does this all mean? The first and very clear conclusion is that customer service does matter and does impact on renewal levels. The second point is that the levels of customer service in the magazine business are generally seen to be quite high and improving with few major differences between the key players in the bureau market. Having said that, there are clearly things that consumers notice and their sensitivity to the whole renewal process and to those first few contacts early on in the whole relationship (in the "nursery period") show that more focus needs to be put on these areas in particular. A major issue is that most magazine subscribers will not complain about service shortfalls. They always have an alternative in buying from retail. And in the end, they will simply vote with their feet and let their subscription lapse rather than create a great fuss at the time.
Our industry’s challenge is to identify the issues that matter, track them relentlessly and improve them constantly. That practical output from the Subscriber Service Survey is what makes the whole project so important as it gives us the ability to see the hard-edged financial impact of doing the simple things better: getting the boring basics right first time, every time. The reason for that obsession is that customer service does matter. And poor customer service costs!
| If you are interested in taking part in the 2009 Subscriber Service Survey, please visit www.demographix.com/dovetail2009 |
