Defray postage hikes with phone savings

Folio: The Magazine for Magazine Management, April 1, 1995

Perhaps you've been approached by one of the long-distance carriers with all sorts of incentives--including cash--to lure you away from your current provider. Then your carrier offers incentives to keep your business. The same kind of aggressive marketing is going on in the business arena, especially between MCI and Sprint.

If you haven't already, you should take a look at your long-distance carrier bills because there are big savings in renegotiating those contracts. The stakes are much higher with business accounts and the incentives are much greater. One trade magazine publisher--with about a dozen magazines--called in Sprint and MCI. After the meetings, the publisher had signed a contract for three years and two months and guaranteed that phone usage would remain at $300,000 per year--not too hard to do because the company has added more telemarketing and is increasing its fax communications. In return, this company was given a 40 percent reduction in phone costs, six months' free phone service and a signing bonus. The contract means the company will save about 42 percent of the cost of this year's postage hike, as well. "The war between MCI and Sprint is producing the most unbelievable cost savings," our source reveals. Because of a confidentiality agreement, this savvy negotiator wouldn't reveal which service made the concessions, but he has some advice for publishers: First, don't be afraid to be very aggressive in the concessions you ask for. And second, have your vice president of manufacturing, who is used to extracting concessions from printers, handle it. "If you can negotiate with printers, you can negotiate with these guys," he says.