The changing world of subscription fulfilment!

It’s hard to say exactly when it happened, but at some point in the not too distant past the business of subscription management (or fulfilment as it’s also known) changed. What used to be an industry that was mainly operational, revolving around manual tasks such as opening envelopes, keying orders and sending out back issues is now so much more.

All of the operational tasks are still there (although a lot of these are now automated), it’s just that they are now accepted and happen quietly in the background. The focus now is much more strategic and involves long-term planning, systems development and customer intelligence.

A number of factors have contributed to what is a ‘sea-change’ in the industry, with publishers expecting so much more from their fulfilment bureau, a term which no longer describes the breadth and complexity of the task, but one I’ll continue to use as I haven’t managed to come up with an alternative yet.

During the next few hundred words I am going to try and explain some of these factors, discuss how the industry has reacted and also hazard a guess as to what might be in store.

The importance of subscriptions

Since the 1970s, fulfilment bureaux have provided publishers, to varying degrees, with fulfilment services that they couldn’t or didn’t want to handle themselves. These services were predominantly the labour-intensive tasks such as data entry, answering telephone calls and sending out customer correspondence.

Apart from the likes of Readers Digest, the volume of subscriptions was fairly insignificant at the time, with a few specialist titles operating postal delivery of their copies, but the majority relying on the newstrade network of wholesalers and retail outlets to promote their magazines for sale to customers. With a lot fewer titles available, there wasn’t the same challenge that there is now to get shelf space, but more of that later.

There was not much need for fulfilment bureaux, and the ones that did exist were hardly beacons of innovation. The majority of publishers didn’t see this as a core area of their business, or value the route to market and so weren’t willing to invest time and money in the service. They were happy for the few subscribers they had to be managed in a low-cost, minimum-hassle sort of fashion.

Obviously a lot has changed in the last thirty or so years. The newstrade has altered beyond all recognition, and is likely to continue to change with the OFT expected to rule on anti-competitive behaviour early next year. Although most publishers will be hoping that the case will be dropped, following the "Competition Prioritisation Framework" initiative issued by the OFT on 12th October 2006. Now power resides firmly with the retail groups and supermarkets, as opposed to the wholesalers. And with such an abundance of magazines available, they can, and do, dictate which titles they stock.

This has resulted in a large proportion of magazines (particularly the specialist interest titles) having a minimal retail presence, leaving subscriptions as the primary route to market.

Just as important is the realisation by publishers that dealing direct with the customer (as opposed to dealing with a myriad of ‘middle-men’) has an inherent value, not just in publishing but across all business. Just cast your mind back to the raft of sales promotions that appeared on FMCG products in the 1980s that asked customers to provide their details in return for a product or service. This gave marketing departments powerful information on their customers (who they were, what they bought and when) that was previously unavailable.

Sea Change factor No 1

Subscriptions are now a fundamental part of the circulation strategy for all but a very few magazines. For some, it’s the primary or only route to market. Publishers now invest hundreds of thousands of pounds every year in acquiring and retaining subscribers. They spend time and money in segmenting and analysing their customers and develop specific marketing strategies for these groups. And they have dedicated subscription marketing teams.

Where, previously, publishers simply needed some help to process subscription orders, receive a few phone calls and sell some back issues, they now require a lot more support in areas such as web development, subscription marketing, customer analysis and data management.

With so much focus, energy and money being directed at subscriptions, the demands on their external partners have increased significantly, with the spotlight directed squarely at the fulfilment bureau. And so it should be. It’s a role that is critical to the success of publishers’ subscription strategies.

(Real) CRM is alive and kicking

During the 1990s, and on the back of massive advances in technology, CRM (Customer Relationship Management) became one of the most popular acronyms in the business world. It was touted as the answer to all of our prayers and many organisations invested millions in complicated systems and expensive implementation consultants.

Unfortunately this missed the point of CRM and, as we all know, most of these projects failed due to the focus being on technology and not on the customer.

Since then, CRM has matured. It’s now more about a strategy and less about systems (thank goodness) and this, I believe, is ‘sea-change’ factor No 2. CRM is now seen as it was originally intended, ‘making the experience excellent for each customer.’ For me, this means providing efficient customer service across your multiple touch-points and using customer information to ensure all communications are accurate, timely and, most of all, relevant.

With fulfilment bureaux providing a number (if not all) of the customer touch-points such as calls, email, SMS and letters, they are now at the forefront of every publisher’s CRM strategy. Fulfilment bureaux need to be able to support a publisher’s multi-channel approach to in-bound customer communications.

Developing and managing these different channels is not the difficult part; the challenge begins when you need to identify, capture and store all this customer information centrally.

Publishers are now embracing CRM wholeheartedly and putting the customer at the heart of their business and fulfilment bureaux are the enabler to allow them to do this. Solutions are being developed to support the multi-channel customer strategies they are implementing, and arm publishers with the knowledge and insight they need to measure and plan effectively.

Publishing is more complex than ever before

Before the advent of so many different technologies, being a magazine publisher was pretty straight-forward (although it didn’t seem so at the time!). There was a magazine, some branded products or merchandise and, if you were lucky, an event or exhibition to allow face-to-face interaction.

Nowadays, they are likely to have a plethora of different branded products and services being delivered across multiple platforms. And, with every product or service comes the need to produce content, attract customers, secure advertising, arrange distribution etc. Single magazines have morphed into multiple product brands.

With so many different products or services being produced for different customer segments, the world of publishing (or media) is much more complex. Where, before, you had magazine subscribers, magazine buyers and event visitors; you now also have to add to the mix: website subscribers, mobile subscribers, digital edition subscribers, PDA subscribers - to name just a few. In some cases, publishers also offer package subscriptions containing a combination of products and services, adding yet another customer group.

Each of these customer groups needs to be marketed to, communicated with and managed and this responsibility often falls to the circulation department (due to their knowledge and experience). In turn, they usually look to their fulfilment bureau to manage these new customer groups alongside their existing print subscribers. But it’s more than that, as they actually want them to be managed together with their subscribers, creating a broader customer solution.

You only need to look at the increase in the use of the words ‘audience’ or ‘community’ to see how this diversification has impacted subscription and circulation teams throughout the US and more recently the UK. Circulation (or ‘audience’) directors now have responsibility for other customer groups and are looking to their bureau to provide them with a solution to manage them.

And so what of the future

I believe we will continue to see publishers diversify as they use the power of their brands to launch new products and services. They will take advantage of the plethora of technologies available now, and probably help establish a number of new technologies through their forward-thinking and risk-taking approach. As the purveyors of much content, they are always going to be at the leading edge and therefore so must fulfilment bureaux.

At the same time, the value of the customer will continue to increase (as will the number of customer types) making the ability to manage them all centrally and effectively even more important to the publisher. Knowledge is a powerful tool and the demands to provide customer insight will know no bounds.

I can see the fulfilment industry branching out further to service the needs of publishers as they continue to produce content, develop new products and attract new customers.

The challenge for fulfilment bureaux is to continue to provide exemplary core fulfilment services, whilst at the same time developing their businesses to support broader customer management needs and service an increasingly diverse product selection. Not much then!