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Discussions with magazine circulators largely bear out-these observations. When it comes to subscription efforts, many said their phone use followed the usual pattern. Consumer magazines continue to employ it sparingly and strategically in their renewal series and barely, if at all, for new acquisitions - a trend nearly assured by enactment of the FTC's new Telemarketing Sales Rule. And while an overall increase in telemarketing has made big news with controlled circulation titles - according to the latest CM survey, telemarketing is expected to account for 30 percent of controlled subscriptions this year - many circulators are quick to admit the increase in volume has yet to be matched by an equal measure of innovation.
Making telemarketing work comes down to making the cost of telemarketing pay off. And there are ways to do this that don't involve waiting until expire or launching a last-ditch campaign before handing an auditor your numbers. Here are a few:
* TARGET YOUR PHONE AUDIENCE
Calling every subscriber at renewal is a waste of money and a surefire way to annoy a group of good customers. But it does make sense to identify that subset of subscribers who respond well to the phone - their high response rate can balance the cost of calling early, particularly if it saves on mail efforts they habitually ignore.
Controlled books, whose phone-source subscribers are broken out on circulation statements, already have that information front and center. "We know people in the telecom source in our BPA statement are going to have to be called," says Peggie Kegel, circulation director for Advanstar. "So we start right away rather than waiting until the last minute."
Joy Puzzo, circulation director for Thomson Medical Economics, said her cost per order fell by half after telecom subscribers for the company's two controlled veterinary titles were separated out and phoned rather than mailed or faxed to. "We found the people who responded by the phone - when we broke it out - were the ones we were getting minimal responses from at best through direct mail or tip-ons," she said. Those who renew by telephone account for about 25 percent of the file.
While targeting phone-sold names can help avoid wasting money on unanswered mail, a phone effort may also boost renewals on subscription sources with traditionally low renewal rates. Joyce Shirer, VP, circulation, for the Men's Health and Sports Group at Rodale, has found telephoning agency-generated subs can make the difference between losing those customers at renewal and retaining them - hopefully with some lifetime value - as direct-to-publisher names. She now targets agency subs with a mid-series telephone effort, after tests showed that the response rate for a phone effort to those subscribers at that time was 25 percent higher than that generated by mail. Though the phone effort can cost four times as much as mail and only a portion of the names on the file can be reached by phone, she said it's worth it to bring those subscribers - whose renewal rate as a whole typically runs 10-15 points lower than other sources - on board. "Once they've renewed through us one time, they'll renew like any other subscription," she said, adding, "We look at it in terms of how much we'd have to invest to get those subscriptions as new business."
* LET UPSELLING PAY THE WAY
For paid books, renewal by phone provides an unmatched opportunity to upsell - either to a longer term, an automatic renewal, or additional subscription - all of which can offset the cost of a phone effort.
"One of the things we struggle with is that fewer and fewer people are answering their phones," says Ernie Vickroy, director of telemarketing for Time Consumer Marketing, which works a low-key upsell on virtually every phone call. "What upselling has enabled us to do is keep our cost per order flat while we're reaching fewer people. It's enabled us to keep trying to contact customers."
The ability over the phone to sell term is what allows Highlights for Children to use telemarketing efforts from the beginning of its renewal series, says Alan Bayersdorfer, VP, customer marketing. The magazine relies heavily on telemarketing, with about 50 percent of its renewals taken by phone. "It's very hard on paper to sell a three-year subscription," says Bayersdorfer, "but we can sell three years on the phone easily."
At Time Inc., phone is the leading medium for selling auto-renewals on core titles such as Time, Sports Illustrated, Real Simple and People. Subscribers who pay over the phone with a credit card are consistently offered an auto-renewal option, says Vickroy, and 98 percent accept it.
"I think one of the biggest reasons people don't want to move into an auto-renewal program is they think they can't get out of it," Vickroy says. "If they're on the phone, they can ask, 'How do I get out of this?' In a phone call, there are no asterisks. We can provide them with all the information."
Likewise, Vickroy says he's found a telephone approach worthwhile for combination sales. "If we have a complicated sale, obviously the phone is a better way to explain it. If you think about a direct mail piece, the customer doesn't really know where to focus. On the phone we can give them information on a need-to-know basis, and focus them on the important pieces of the sale." Time recently concluded a test to People subscribers offering a subscription to Teen People at a combined price upon renewal. Overall response to the phone effort was more than twice that of a cover wrap, said Vickroy, and more than half of those renewing took the Teen People offer. As valuable as the opportunity to upsell here was the ability to downsell - to allow subscribers not interested in the featured offer to renew on their own terms, Vickroy said. "What's important is it did not negatively impact our response to People renewals at all - we got the same response, but we were able to generate incremental subs on Teen People."
* FINESSE YOUR FILE
On controlled titles, phone efforts can pay off by focusing acquisition efforts on the most desirable and - in the end, cost-effective - subscriptions. By telemarketing to one of his more successful direct mail lists, Don Roth, circulation manager at Thomas Publications, saw responses increase from between 2 and 5 percent to between 13 and 15 percent for Industrial Equipment News and Managing Automation. At those rates, the phone effort yielded enough subscriptions to allow him to stop calling less than halfway through the list. As a result, the cost per order on Managing Automation dropped by half. By going to the phones, Roth said, "We were able to realize significant savings with new-name acquisition."
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