Telemarketing: no longer the end of the line

Folio: The Magazine for Magazine Management, March, 1990 by Paul Frichtl

Telemarketing: No longer the end of the line Magazine circulators are currently taking a closer look at telemarketing. Once relegated to the end of the renewal series and viewed as a costly, last-ditch effort to bring a subscriber back on the books, telemarketing is playing an increasingly important role in circulation strategies. It not only brings in good response rates, circulators say, but makes good economic sense as well.

That's especially true as direct mail response rates continue to deteriorate and as the cost of mailings increase with postage rates and materials and printing costs. Leading circulators and suppliers in the telemarketing business claim more publishers are now testing telemarketing, budgeting for it, and integrating telemarketing more tightly into their overall efforts. "And, they're looking at it from a cost effectiveness point of view," asserts Peg Kuman, president of The Power Line, a Publishers Clearing House company.

Those circulators who take steps now to test and integrate telemarketing strategies, Kuman adds, will be at an advantage when the next postal rate increase takes effect in 1991. With many expecting postal rate hikes to at least equal 1988's 33 percent jump in third class rates, circulators see the cost-per-order for telemarketing becoming even more attractive in coming years.

One of the greatest attributes of telemarketing, of course, is speed. A campaign can be up and running in three to four days, compared to four weeks with direct mail. Telemarketing is a highly interactive testing vehicle. You can have five different agents calling with five different prices--and within a couple of hours, have a feeling for what's the best offer. Sharp circulators can determine what the prospects' primary objections are and make adjustments the same day in the offer, the script, the timing of calls and so forth.

Pacing sales

Telemarketing also allows a circulator to pace sales. For instance, a circulator may prefer to receive a steady influx of orders, rather than the lump total of new orders or renewals that is usually the case with large direct mail drops. A circulator can regulate the number of calls made in a given period.

Even for business publications that have no subscription revenue to cover or offset the cost of telemarketing, the phone is becoming a more important tool. "Particularly since it has become so much harder to get mail into a business/corporation," says Susan Sherwood, associate corporate circulation director, Medical Economics. She adds that her company "is not doing nearly as much as I think we should be doing.

"If you are promoting to a business where people are at desks," she adds, I can't imagine why you're not using phones. At least for paid publications, it's quite an efficient way of acquiring new subscriptions--certainly renewals. Because if you can reach them, you can sell them."

Yet the high up-front cost of telemarketing--with costs to the publisher averaging $30 to $35 per hour--kept Irving-Cloud out of the telemarketing business for about three years. It only recently began using telemarketing again. Sometimes the publishers don't want to put out the initial payment," notes Steve Amella, vice president of circulation. "At $5 to $6 per respondent, if you tell the publishers you need to qualify 20,000, they get a little gun shy." Although, he adds, "in the long run, it is a lot cheaper than all the direct mail efforts you'd have to make. Anyone who can afford it will be saving money."

Telemarketing is used most commonly for renewals and requalifications. A way for publishers to use telemarketing more effectively is to change the position phone calls have in the renewal schedule. Cahners Publishing Company, for example, used to turn over names from its paid circulation titles to a telemarketing firm once the subscriptions had expired and at least five other efforts had failed. But telemarketing is now the number three effort in the renewal sequence. "Instead of telemarketing being the last avenue of recourse, we're finding that we get a bigger yield using it as the third effort," says Anthony Pertusi, vice president, circulation.

Sherwood likes the idea of going to the phones early in the renewal cycle. Medical Economics' nursing title, RN, typically goes to the phones two months past expiration of a subscription--the seventh or eighth effort. Even at that point, RN pulls a 10 percent to 12 percent gross response. "You're not going to get that kind of response on direct mail," Sherwood states, adding, "Anything you do on the phone is going to pull three times what you get on direct mail. So why save your ammunition for the end of the battle?" she asks.

Although it is not being done at Medical Economics, she says, the ideal would probably be a phone call right around the expiration date when there is a sense of urgency built into the timing. That telephone effort also ought to be supported by a direct mail effort, such as a postcard scheduled to arrive a day or two ahead of the call, she says.