Does customer service really matter?

Ask publishers what is the most important service that their fulfilment operation can offer and they are unanimous in their view – high quality customer care. Yet do we really understand our customers? What kind of service do they expect? Do they even notice? These were the kinds of questions we needed to ask when we set out to create Dovetail’s Subscriber Satisfaction Tracker survey.

We created an online questionnaire, using emails to drive traffic to the site. The emails were sent out by five of our leading clients to a sample of active subscribers across 46 of their titles achieving an impressive 17% response rate. A total of 58,600 completed responses were processed, making it the one of the largest magazine customer care surveys ever conducted in the UK.

The survey provides a lot of interesting background data about the basic subscription habits of the consumers of these particular magazines:

* Subscription Lifetimes. The average length of time they have subscribed to their current title is 2.3 years, though this clearly varies massively from title to title.

* Payment Method. Direct debit continues to grow in importance accounting for 63% of our sample.

* Reasons for Subscribing.

While a discounted price is clearly an important factor, it is often forgotten that most consumers decide to subscribe because of the unique elements of the subscription service, principally its convenience and the guarantee of a regular and timely supply. Getting the basics of that supply right is absolutely fundamental, particularly on-time delivery. In addition, "convenience" covers ease of ordering and altering subscription details, not just the home delivery of the issues. So, the efficiency of the whole call centre operation is key.

* Intention to Renew. The survey showed that the vast majority of subscribers intend to renew – a perspective that is reinforced by other research from PPA and Royal Mail. When subscribers lapse, it is rarely because they have made a conscious decision to cancel, but because they have simply not got round to renewing: they are too busy, their attention has been diverted on to something else and the whole re-subscription process just gets swamped by other things.

Yet, at the core of what the Subscriber Satisfaction Tracker is all about is what subscribers think of the subscription service itself. The project breaks this down into three broad areas:

* Issue delivery
* Subscription service
* Free gifts

1. Issue Delivery Problems

The single most common problem is the late delivery of the magazine copy which has affected 22% of subscribers, which is a disturbingly high figure. For something as fundamental as sub-standard delivery to be affecting so many subscribers is simply unacceptable. This does not just spring from problems with the postal service, but can also be created by publishers’ own production schedules where copies are planned to arrive at retail before the consumer letterbox (it is subscribers seeing the latest issue at retail which generally creates the perception of "lateness") and where hand delivery operations are not fully integrated into the whole process of physical fulfilment. Getting these simple, but important things right is absolutely crucial. To do so requires constant monitoring: something that often does not receive enough publisher attention. Yet the bureau also has a clear responsibility in all this to feed back as much information as possible and to focus publishers on the whole area of timely delivery.

Another key factor to bear in mind is how few people actually complain about their subscription problems. For example, only 15% of those who have had a problem with delivery have ever bothered to complain about the fact. This points to a hidden, grumbling discontent on a major scale.

2. Subscription Service Problems
The issues here centre on the contacts between the customer and the fulfilment operation, which range across renewal letters, acknowledgement of order and payments being handled correctly.

* The consumer’s biggest gripes relate to the renewal process: renewal letters being sent out too early in the life of the subscription and the expiry date not being clearly stated in the renewal communication. Yet the low incidence levels of these problems (only 3-4% of subscribers) is also matched by the low complaint rates (under 5% of people who have been irritated have ever got round to registering that irritation).

* There are very low levels of incorrect payment handling (under 1% of subscribers having had any problems), but here the complaint rates soar, predictably, to 30% of those who experienced a problem. Yet this still leaves 70% of subscribers who had a payment problem, but who have never bothered to complain about it.

3. Free Gift Problems

Here again the incidence of problems (non-receipt of gift, gift damaged, etc) is very low, generally under 3% of subscribers ever having had any cause for complaint. Yet what the research does highlight is that consumers are not always very impressed with the quality of the gift itself.

The response is broadly positive, but is a little luke-warm. The magazine subscriber is becoming much more critical of the added-value elements of the whole subscription package. Their pickiness came through in the 2006 Brandlab / PPA research project, The Loyalty Challenge, where a number of subscribers said that they would like to choose their own gift from a selection, or have the choice between a gift and a price discount, as many thought the gifts were not relevant to them.

The percentage of subscribers who do have problems with their free gift and then go on to complain is also quite low, confirming the impression that the subscriber sees the gift as a bit of an add-on rather than a core element of the subscription offer.

CRM or CMR?

There is a view that Customer Relation Management (CRM) is dead and that the market has moved on to the Customer Managed Relationship (CMR) where the consumer is in real control. That debate is a bit theoretical, as in practice, control is what the consumer wants and what we have to deliver.

Dovetail operates an online subscription management system and the table below shows what subscribers use the system for, with most using it for more than one task.

The high satisfaction levels registered among users of the online management system show that readers do like to manage their subscription in this way. However, only 57% of subscribers were aware that an online management website existed for their magazine, illustrating the requirement for the publisher and the bureau to work together continuously to promote awareness of these sites.

Does quality of service actually matter?

At the end of the day, it is whether the reader still likes and wants the magazine’s editorial which is the principal driver behind the decision whether to renew or not. Yet the Dovetail Subscriber Satisfaction project provides substantial evidence that consumers are very aware of service lapses and that they find them irritating even though only the minority complain about them. Ask a subscriber directly, whether the quality of customer service has affected their decision to renew and they will place it as a relatively low-ranking factor. Yet engage that consumer in discussion and they will at some stage start to vent about a delivery problem they have had. Supply issues are not "front of mind" for most subscribers. They are a hidden, but vitally important part of the whole "subscription experience".

There is something else to bear in mind as well. Unlike many other consumer products, consumers have a choice of purchase channel with magazines and they can always slip back into retail purchasing if they do not want to continue subscribing for whatever reason. Yet when a subscriber reverts to retail, they do so at a much lower purchasing frequency than when they were subscribing. So, while the reader has not been lost entirely, their value has decreased significantly.

Sometimes, publishers find it difficult to justify investing in customer service because the pay-back is not always immediate or obvious. Yet in an environment where we are fighting for consumer time and spend as never before, the aim to make subscription customer service a faultless and seamless part of the "subscription experience" must be an absolute no-brainer. To achieve that is not complicated, but it does require transparency and openness from the bureau, a spirit of partnership and commitment from the publisher and a relentless focus from everyone on getting the boring basics right first time, every time.