The Emergence of Inbound Telemarketing

Folio: The Magazine for Magazine Management, Oct, 1999 by Mary Harvey

Advanced upselling and cross-selling techniques are transforming customer service calls into new business opportunities.

Out of respect for consumer privacy, publishers traditionally have been reluctant to reach out and touch prospects at home with annoying telephone pitches. But when a consumer calls a publisher--well, that's another story altogether.

"The opportunity of having a subscriber on the phone when they've called you is too good to pass up," says David Obey, consumer marketing director at Conde Nast. "It's a golden moment. They're ready to buy, they're in the mood, and they've been trained to have their credit card numbers handy. It's a completely different dynamic from when you're calling them."

For most consumer magazine publishers, telemarketing has primarily been limited to renewals, and billing and collection efforts. Inbound telemarketing, in particular, has long been "like wallpaper"--an easily forgotten background source that produces limited volume, says Obey. "Nobody's really thought to pay it too much attention."

But the current circulation crisis is forcing consumer marketers to scrutinize and re-evaluate every available source. In recent years, despite increasingly controversial privacy issues, publishers have given outbound telemarketing more play. The use of third-party agents--the primary users of outbound telemarketing--increased by 3 percentage points in 1998, according to "Capell's Circulation Report."

But publishers are not stopping there. Today, the unique opportunities that inbound telemarketing offers are being reassessed as well. According to this year's FOLIO:/Circulation Management consumer circulation trends survey, 54 percent of publishers report that they are currently using inbound telemarketing as a source, compared with 41 percent in 1997--making it the fifth most widely used source today. Two years ago, it ranked ninth.

However, generating and maximizing incoming calls has its challenges, and those "golden moments" do not necessarily always yield golden results. "It's like picking up the rind after you've made orange juice and trying to squeeze another couple of drops out," says Obey. "You think, 'There must be something in there,'"

Increased opportunity

The use of toll-free numbers is apparently on the upswing. According to the North Hollywood, California-based American Teleservices Association, approximately 80 million toll-free calls are made daily through AT&T's network alone. In 1997, the last year for which figures are available, a total of 27.6 billion toll-free calls were made nationwide. ATA also projects that in 1999, the call center industry will grow by 12 percent.

While publishers acknowledge the increased use of toll-free numbers, most hardly expect them to be a saving grace for circulation--mainly because the medium in which these numbers are most effective, direct response TV, is cost prohibitive for many.

Naturally, there are exceptions. Next spring, Emap Petersen plans its first use of a toll-free number on national television to promote its recently launched, one-million-ratebase NFL Insider. In conjunction with the NFL, Emap Petersen is currently running Sunday and Monday TV ads for newsstand promotion of the new title, but will switch to subscription ads once the title has a regular frequency next year. "It's an opportunity we haven't investigated before," says Liberta Abbondante, Emap's vice president, general manager, consumer marketing.

But, more commonly, publishers are placing added emphasis on inbound call opportunities. "We're absolute fans of 800-numbers," says Business Week consumer marketing director Joyce Swingle. Business Week, which currently uses 800-numbers for both customer service and orders on such things as renewal mailings, cover wraps and the Internet, is taking advantage of the moment a customer calls in by attempting to sell additional products. In a cross-sell scenario, publishers might attempt to sell the consumer a magazine or an ancillary product from the same publishing group. Upselling, on the other hand, seeks primarily to retain a customer by extending a subscription.

"Historically, we haven't done a lot of cross-selling and upselling in our customer service operation, but we're in the process of doing more now," says Swingle. Although Business Week is not necessarily expecting customer service calls to generate a lot of business--and the company has no plans to promote 800-numbers more aggressively at this time--Swingle expects to see order volumes increase as a result of new in-house efforts involving improved scripting and training.

Others are intentionally trying to increase call volume in order to create additional chances for a sale. "The opportunity to upsell has increased as calls increase," says Emap Petersen's Abbondante. While the company does not promote 800-numbers on insert cards or direct-mail pieces, it began including an 800-number on the masthead of all of its 160-plus titles at the beginning of this year--a move that's doubled its incoming call volume, says Abbondante.