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The following is an article relating to the telemarketing industry including products and services in our business areas.

Jan 1, 2001 12:00 PM
Mary Harvey

Advanced 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.

It's a `golden moment' "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. 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. "It's an opportunity we haven't investigated before," says Liberta Abbondante, Emap's vice president, general manager, consumer marketing.

Cross-selling and upselling 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 has began including an 800-number on the masthead of all of its 160-plus titles - a move that's doubled its incoming call volume, says Abbondante.

Emap Petersen is currently working with its primary fulfillment bureau, Centrobe Inc., to roll out upselling services that were tested in late 1998. "I think there's more opportunity with inbound calls than outbound," Abbondante says.

The call for more service In the last two years, publishers have become far more focused on the concept of "the customer moment" - the instant a consumer contacts a publisher, says Centrobe's director of operations Michele Wilson. "It's a great opportunity for an upsell. It's a captive audience - and people calling in generally have a few minutes to spare."

Recently, Centrobe began offering automated, easy-to-use upsell and cross-sell services with publisher-directed scripting functions.

Conde Nast's Obey, a current user of Centrobe's automated upsell services, says this type of opportunity is long overdue. "I've always been astounded that this was not done years ago," says Obey, who's also considering using Centrobe's new cross-sell services for his titles. "You get a lot of cash with order. And you get [more] credit-card numbers than you can get by mail."

"Cross-selling and upselling has always been on the radar screen," says Steve Strickman, president of Palm Coast Data Inc., which began offering cross-selling earlier this year and upgraded its upselling capabilities in the last 18 months. "It's obvious, and it's technically easy to do. But the fulfillment service companies were never very good at it. The customer service reps were good at providing service," Strickman adds, "but some people are uncomfortable selling. With scripting, prompting and better training available, we've been able to do it a lot more effectively."

According to Strickman, a cross-sale or upsale is successful in about 25 percent of all calls. But certain restrictions to inbound telemarketing still apply. For instance, despite large incoming call volumes (Centrobe currently processes about nine million calls annually, compared with 10 million letters), most fulfillment houses' call-centers have limited weekday hours.

At least one fulfillment house has addressed this problem. Kable Fulfillment Services, offers round-the-clock, seven-days-a-week call center service, according to vice president of marketing and sales Karly Becker.

None of the handful of clients who have signed on for the new "24/7" service have objected to Kable's premium for after-hours calls, says Becker. "We're getting one new client a week and no one has said `no' to the premium charge so far."

Only three of Kable's clients are currently using outbound telemarketing, Becker says, but 382 of the 450 magazines Kable fulfills - or 85 percent - use Kable's inbound services. And order calls make up 45 percent of all incoming calls, while customer-service calls comprise 55 percent. At least half of Kable's customers currently use toll-free numbers on direct-mail pieces, and at any given point, 20 percent of Kable's magazines are using cross-sell and upsell services, Becker notes.

Limits on b-to-b use B-to-b publishers use fewer toll-free numbers for orders and customer service, and thus have less telephone contact with customers. Therefore, inbound telemarketing is still a low-ranking source for them. While some promote toll-free numbers on mastheads and in direct mail, many b-to-b publishers, wanting to retain more written requests than telecommunications requests, promote telephone response far less than their consumer counterparts do.

"Opportunities do exist for cross-selling and upselling, and there are plenty of publishers trying to take advantage of this, but not as much on the b-to-b side," says Nick Cavnar, vice president, circulation, of Intertec Publishing. B-to-b service bureaus are not as equipped to take full advantage of inbound calls. "Most of the controlled-circulation fulfillment houses don't have sophisticated customer service systems as compared with the large, paid-circulation houses," Cavnar explains.

Setup costs are higher Another problem is the cost. "You can get a cost per call for inbound telemarketing that's cheaper than outbound telemarketing, but you run into more setup costs in terms of training the staff," says Cavnar, who explored using an inbound call center for customer service backup, but found upfront costs to be too high. While Cavnar says Intertec may test featuring an 800-number prominently on cover wraps and direct mail in the future, high costs now prevent such testing.

Barry Green, vice president, director of circulation, Hearst Business Publishing, also ran into price problems when testing inbound telemarketing for requalifying controlled requesters. "Price-wise, it seemed I could probably do better with outbound telemarketing than with in-bound," says Green.

Nonetheless, Green echoes the feelings of many publishers: "As response rates and other things go down, we may have to do it. It's something I have to think about."