Telemarketing: within reach

Folio: The Magazine for Magazine Management, May 1, 1992 by Laurel Touby

Business publishers reach for the phone and save money.

For decades, telemarketing was direct mail's ugly stepsister in the world of controlled-circulation magazines. But a BPA rule change in the early eighties that allowed names acquired or requalified by phone to be counted (for audit purposes) as request circulation, combined with a surge in postal rates and increased competition among telemarketing companies hungry for business, is making telephone requalifications de rigueur for business-to-business publications of all sizes. Says Michael Marchesano, senior vice president, marketing, BPA, "We have seen a definite increase in the use of telemarketing. Of 1,041 publications, 389 are reporting telemarketing on their statements now. That means 37.4 percent have some request circulation acquired through telemarketing."

Notes Kratos Vos, circulation manager at BPI, LP, "For us, telemarketing is heaven-sent." The company is using telemarketing for three of its 20 magazines and is testing it on many others.

Telemarketing has distinct advantages over the written word: it's fast, sometimes taking only days. You can get a replacement name more easily by phone (which is extremely useful in high turnover industries). There's not a lot of waste-once you've hit your target number of names, you can stop the effort, whereas with mail, you might send out double the number of names you finally requalify. And with telemarketing, you can take a verbal referral and quickly convert that person to "direct request" by transferring the call immediately to him or her.

And, of course, there is the question of cost. If you are already looking at per-name direct-mail costs ranging from $3.90 to $7, you'll be pleasantly surprised. "Generally speaking, the range for telemarketing is now $5 to $8 per head, but it can go lower - to $3 or $4 - if you limit the number of questions you ask each respondent," says Stroudsburg, Pennsylvania-based circulation consultant Ron Moyer, president of RSM Marketing Inc.

Steve Koppelman, director of circulation for Gordon Publications, renewed 8,000 names on one book at a cost of $4 per name. Was it worth it? "Definitely. It surprised me somewhat," he says. This year, he plans to more than double his use of telemarketing to five (versus two) of Gordon's 16 titles.

New steps to an old donce

There has also been a cbange in the way telephone efforts are positioned in the renewal/requal process: No longer the last-minute, last-ditch try to bring up the numbers, phone calls are being factored into the requalification process earlier.

"After doing a cost analysis last year [when he was at another company], I determined that I could save more money by using telemarketing in our fifth effort, rather than waiting until the sixth or seventh," explains Matthew J. Clancy Sr., group director of circulation at Lebhar-Friedman, which uses telemarketing on four to six of the seven controlled-circulation magazines it publishes. His telemarketing budget at those publications is $25,000-which is roughly 10 percent of the total requal budget for those books.

Another change in the telemarketing arena is that business-to-business publishers are using it for more than just requals (which entails communicating with every subscriber at least once every three years). It's also being used for renewals and conversions from unpaid to paid.

Telemarketing will never entirely replace direct mail, however. The price won't get below a certain point without seriously jeopardizing the integrity of the data. "The math won't let you do it," explains Tim Searcy, vice president, sales and marketing at San Antonio, Texas-based West Telemarketing Outbound. "It's still a labor-intensive business." And some people - such as doctors, engineers and technicians - are almost impossible to reach by phone, which makes their per-name cost exorbitant.

Doing it right

If you have considered the pros and cons of telemarketing and decided to give it a try, make sure you take the right approach.

* Start with a strong list. "You can't always use your own mailing list, because if the names on it are three years old, a new list will outperform it, " says Mike Albers, president of Quality Telemarketing in Omaha, Nebraska. The better the list, the quicker and less costly your effort will be.

* Have your auditor scrutinize your script. BPA, for example, will work with you to make sure that your script asks for the right information. And to validate that information, BPA devised a personal ID question (such as the name of a high-school or mother's maiden name) that serves as a verbal "signature."

* Pick someone your own size. If you are a small publisher (say one or more magazines, each under 20,000 circulation), you'll want to work with a small telemarketer. A large telemarketer, geared to high-tech, highvolume calling, will have to retool all its software programs - and will be sure to pass on those costs to you. You might even consider approaching a market research firm that has handled other types of work for you.