Telemarketing for Publishers

B2B publishers have been using telemarketing for years. Simple tasks such as verifying controlled circulation in advance of the ABC audit have typically been outsourced, and, increasingly, consumer magazines are outsourcing subscriptions and renewals to telemarketing firms. Telemarketing is now a vital weapon in the publisher's armoury for stabilising or increasing circulation.

Some things have certainly changed over the past few years. For instance, where it used to be the receptionist who struck fear into the telemarketer, it's now voicemail that is the challenge to be reckoned with. Dean Wards, director of operations at Infotronics, says, "If you've got all direct dial numbers, voicemail can really slow things down on a Friday afternoon."

Still, a good telemarketer should be able to deal with it. Niall Habba, of the Telemarketing Company, says, "You need a good calling methodology," which is likely to be domain sensitive – what times of day to call, for instance. Rigorous recording enables telemarketers to monitor their success, and tailor their calling plans accordingly.

Bradley Kellard, account manager at New Opportunities, also says that some telemarketers can be too cynical about voicemail. "We always leave a message, and believe it or not, people do ring us back."

The internet too has brought new alternatives to compete with telemarketing. Using email and internet based forms to enable subscribers to fill in their own details can reduce the cost of acquiring a subscriber. However, says Bradley Kellard, "there's still a need for human contact" - particularly if subscribers have queries that can't be answered online. Response rates for email marketing are also much lower than for telemarketing. There's also a problem with emails being caught in spam filters; as much as 40% of an outbound email campaign may never reach their intended recipient. And while electronic response may be cost efficient in 'wired' industries such as IT and financial services, other sectors might not respond so well.

Ian McGowan, sales director at Merit Outsourcing, points out that the internet also gives publishers and telemarketers a good way to research potential subscribers and build fresh lists. "Web spiders are a quick and easy way of getting data on job occupants and titles," he says, and telemarketing can then take over the job to gain opt in for marketing.

Telemarketing also competes with direct mail as a marketing medium. Direct mail offers a lower cost per piece – but response rates are much lower than with telemarketing. In fact, Howard Colvin, CEO of Subscriptions Marketing, says, "Really telemarketing has taken over from direct mail, as far as I'm concerned." Response rates on direct mail can be as low as 1%, while most telemarketers look for 25% or above – and some claim to be getting very much more than that.

Niall Habba says telemarketing is "an expensive way of reaching people but a very effective way." He believes it's particularly useful for tightly focused publications, for instance in B2B, where a highly nuanced approach might be needed to ensure that exactly the right subscribers are being selected. Direct mail, on the other hand, tends to work better for media where segmentation is not so tight and the appeal of the publication is wider.

Media Mix

Canny publishers realise that direct mail and telemarketing are not mutually exclusive; they are using telemarketing to leverage the returns from direct mail and other print promotions. Bradley Kellard points out that the return on 'warm' data – for instance where potential subscribers have entered a competition or registered on a free website – is much higher than on other lists. "Really you need a combination of all marketing channels, not just one," he asserts; "if you're planning a mail campaign, you'll get better returns by adding telemarketing to the mix."

Using print promotions to funnel potential subscribers into a telemarketing campaign can dramatically increase response. Howard Colvin mentions a promotion managed by Subscriptions Marketing for Which? magazine, with off-the-page ads for a tax saving guide. Subscriptions Marketing followed up by phoning people who applied for the guide, and upselling to a trial subscription. Now, Howard says, "they're upping their media spend to send people to us."

Flexibility

Another great advantage of telemarketing over direct mail is the flexibility of the medium. With a direct mail campaign, once it's printed, that's it – no changes can be made. But with telemarketing, says Niall Habba, the campaign can be adjusted at any time; "if a dataset is not working for any reason, we can just stop working on it." Scripts can be changed, data can be refined, and new information made available to agents to assist with objections handling; and all this can be done "in real time" given the immediacy of the medium.

Niall Habba believes that's particularly useful for new magazine launches, where publishers want to build their initial readership with a telemarketing campaign. "Publishers are often faced with a number of potential data sets, and they don't know how good each one is going to be," he says; "we can trial on a low cost basis to get it right."

Most telemarketers point out that there needs to be an iterative process of feedback during the campaign. Bradley Kellard says that New Opportunities' agents make notes of what is said during each call, so that responses to the campaign can be reported back to the publisher. If the publisher can help the telemarketer with objections handling, for instance helping to differentiate the publication from its competitors, the conversion rate can be further improved.

Bradley Kellard says that "reporting for us is a key part of the campaigns. Even if our clients don't think it's particularly important, we say it is!" And Niall Habba goes so far as to suggest that "if your agency doesn't come back to you with feedback during the campaign, they're not really trying." He says good feedback and corrective action can easily make 20% difference to the response rate.

Data Cleanliness

Data cleanliness is still an issue for many publishers. In B2B publishing, lists get out of date very quickly as subscribers move jobs or offices. (Median job tenure in 2001 was just four years according to the Office for National Statistics, and it has probably fallen since.)

Ian McGowan says that the vast majority of campaigns suffer from poor quality data, making the telemarketer's job more challenging. And, he adds, "the way many B2B publishers try to increase controlled circulation is to buy in external lists, which are generally of unknown quality." That obviously affects response rates.

But Bradley Kellard points out that telemarketing is actually quite a good way of keeping the database clean. "With direct mail," he says, "you don't know whether you're reaching the correct person or whether it went straight in the bin." With telemarketing, agents can check whether they have reached the right person, and if they haven't, find out who that person is.

So, in addition to increasing the number of subscriptions, telemarketing can also validate, clean, and enhance the publisher's database. Ian McGowan says that one technique that works well for Merit Outsourcing is to use company reception as a data source - "you can build a list of, for instance, all the other plant hire managers in the company."

India Calling

Telemarketing is a fairly mature part of the marketing mix for most publishers. But the market is changing. One of the big changes has been the emergence of offshore telemarketing companies, using staff in India to reduce costs.

Dean Wards says that, while Infotronics handles telemarketing in other industries, publishing has become an important source of business for the company. 20 to 30% of its business now comes from the publishing sector. "It's variable because it tends to be audit driven," he explains, "so at certain times of year they need more work."

Infotronics concentrates on controlled circulation work, using tightly scripted conversations. These might use from five to 30 or 40 questions, depending on the publishers' requirements. Dean Wards says, "The publishers drive the script – we're not involved in that."

But he warns some publishers are taking the desire for information too far. Asking too many questions, particularly where the relevance is not apparent to the subscriber, can lose goodwill. "Less is more," he asserts.

Ian McGowan also believes structured scripts work best for offshoring. "We don't think consumer selling works from India," he admits. In fact, he believes over-ambitious projects in sales and customer service have given offshoring a bad name. "A tightly controlled script, without too many different variables, will work well," he says. Information gathering is also a task that can be usefully sent offshore; there is little room for error, and it is a finite, end-to-end, tightly defined process.

He gives a useful rule of thumb for making the offshore / onshore decision. "If you could use a summer temp or a new graduate for the job or project, you can offshore it."

The savings can be considerable. Dean Wards suggests that companies can save 40% by using an offshore partner, assuming that the response rate is maintained. That applies to publishers who have already outsourced their telemarketing; the savings would be much greater where the publisher is still doing its telemarketing in-house. "With an in-house team, some publishers may have little idea of the actual cost per acquisition; with outsourcing you have complete control over costs and the offshore model reduces costs even more," he says.

VFD Audit Calling

Regional newspapers are using telemarketing to assist with managing their circulation, and this is an area where offshore companies can reduce the costs substantially. Ian McGowan says Trinity Mirror is now using Merit Outsourcing for VFD backchecking on deliveries. "Declining ad revenues and circulations make it a real challenge to get every little bit of margin you can, and we can help by saving as many rounds as possible," he says.

The key to this business is getting the software package right to ensure calls are properly distributed among households and areas. Calls are short – 40 seconds on average – but with 30,000 calls a week, it's a high volume business where cost reduction is vital. Merit claims three of the top ten regional publishers are now using its service – and it's saving more rounds than the previous UK research agency.

Offshoring is obviously putting pressure on the ‘lower’ end of the market. Niall Habba says the Telemarketing Company is doing less audit work than it used to, and Howard Colvin believes audit is now a very low margin business. "We do it if a client requests it, but anyone could do it, and possibly cheaper," he says. Both prefer to focus on subscription sales, where nuance and domain knowledge are more important and offshoring can't really compete.

Not just about cost

Niall Habba points out though that the effectiveness of a telemarketer doesn't just depend on the cost per call. "It's not so much about how cheap the agency is per hour," he says, "it's about how efficient they are." If they don't use good methodologies to generate their calling plans, or they're working on poor data, they're likely to get lower rates of response. Training is another differentiator – telemarketers with high staff churn or poor training and knowledge transfer are likely, again, to generate poor results, negating the impact of lower costs.

Broadening the Service

The scope of telemarketing operations has increased, with publishers outsourcing more processes than they were a few years ago. For instance, New Opportunities is now putting together teams and systems enabling the company to handle the entire publisher-subscriber relationship, including accounts payable, renewals, and handling inbound calls. That is a huge advance on the initial use of telemarketing simply to check controlled circulation subscriber lists – it brings the telemarketer right into the heart of the publisher's business. Bradley Kellard says, "Rather than just outsource one particular process, publishers are looking to outsource the whole relationship with the subscriber. We're encouraging our customers to outsource as many customer interactions as possible."

The mix of business for most telemarketers has changed, too. Niall Habba says, "We had no [paid-for] subscription selling five years ago; we now do a fairly large amount." Subscription sales have taken off with B2B publishers who are offering high value subscriptions, for instance in legal and financial publishing. Although given high response rates, it can cost, even at a fairly low level, say £60 a year, where subscriptions are much higher priced (£500-600 a year for instance) the return is obviously greater and the attractions of telemarketing are clear.

Although Niall Habba admits that subscription selling still generates a minority of the firm's revenue, he says it is growing all the time, while audit work is static or declining. For onshore telemarketers, it's clear that subscription sales will become the main area for growth.

B2B publishers were the first into telemarketing, but they are now being joined by consumer publishers. Howard Colvin believes the move into consumer publishing will continue, as publishers become more aggressive in chasing new subscriptions. Marketers need creativity, though, to create compelling mixed media campaigns; just cold calling won't work in the consumer environment.

A Question of Definition

But the most interesting changes in the business are challenging the definition of 'telemarketing'. New Opportunities is becoming what looks more like a business process outsourcing company; it can even handle fulfilment (though admittedly it does so through a related company, not as part of its own operations). And Howard Colvin actually denies that Subscriptions Marketing is a telemarketer at all. "We're not telemarketing. What are we? That's a good question. As far as I'm concerned I'd say we're leaders in subscriber acquisition and retention."

He's changed the entire business model for the operation with the launch of Letssubscribe.com. Instead of charging publishers for the telemarketing service, he's taking a pure commission on results – with the advantage that publishers can see, very clearly, their cost of subscriber acquisition. And, he says, "we're taking the risk out of generating customers and data for future marketing."

That suggests that a new generation of telemarketers might be on the horizon. The market seems to be polarising between the offshore, low cost, high volume business – mainly working on audit related business – and the 'creative' telemarketer helping publishers gain new subscription sales through a mixed media approach, or taking over the entire subscription management process.

What's certain is that, whether publishers are looking to reduce their costs, or to increase their circulations, there's a telemarketing offer out there to suit them.