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  • 1. Telemarketing: Winners, Losers and Tales from the Trenches
  • 2. Update: Telemarketing Regulations and the Impact John Murray, Vice President Circulation Marketing NAA
  • 3. • Observation •Regulations •Regulations •Prognostication
  • 4. Impact: It Depends
  • 5. Decline in Newspaper Telemarketing Share of Telemarketing Subscription Sales: Orders: 2002 Telemarket 54.1% 11.9 million 2000 Telemarket 57.8% 15.0 million 1998 Telemarket 59.0% 11.8 million
  • 6. The Regulations
  • 7. Federal Do Not Call List: •Less Numbers to Dial •Tightening Rotations •Reduced Number of Orders •Higher Close Rates?
  • 8. Federal Do Not Call List: Do I call the Numbers on the DNC with an existing Business Relationship?
  • 9. Federal Predictive Dialer Regulations: •Investments in Technology •Learning Curve Impact •Achieving a Lower Abandonment Rate = Lower Productivity & Lower Contact Rates •Larger Campaigns Necessary to Manage Lost Call Rates •High Close Rates?
  • 10. More Observations:
  • 11. Third area of new Federal Regulations: •Express Informed Consent •Express Verifiable Authorization
  • 12. Interest - Consent - Commitment
  • 13. Caller I.D. Requirements: January 29th 2004
  • 14. Let’s summarize: •Smaller Universe of Numbers •Lower Contact Rates •Telemarketing Smaller Percentage of Total Sales •Increased Outsourcing of Telemarketing Function
  • 15. Targeted Sales – up! Cost Per Order – up! Advance Paid – up!
  • 16. Higher Retention – maybe!
  • 17. To be Resolved: Regulation E FCC Portability Rules
  • 18. Federal Reserve’s Regulation E -Use of Debit Cards
  • 19. FCC Portability Issues -Identification of Cell Phones
  • 20. First, NAA is about to launch an online Telemarketing Compliance service!
  • 21. Coming in February: NAA Online Regulatory Guide
  • 22. Secondly, next month we will publish a new telemarketing compliance guide.
  • 23. Third, We will continue to fax and e-mail you updates on new regulations and the enforcement policies as they become more apparent.
  • 24. Summary: Telemarketing will remain a viable source of Subscription Sales and a tool for subscriber retention – just different.
  • 25. Thank you very much for your support!
  • 26. Elimination of Telemarketing- Test Project Ed Graves, Publisher The Jackson Sun (Jackson, TN)
  • 27. Jackson, Tennessee Elimination of Telemarketing Test Project
  • 28. Why the Test Project Was Right for Jackson • Home delivery was declining an average of 4.6% the past 4 years. • The Circulation department had become somewhat immune to declining readership.
  • 29. Why the Test Project Was Right for Jackson • New Circulation leadership and progressive thinking • Reversing readership decline was the top priority for all departments at the newspaper
  • 30. Selling the Project to the Masses Internal Staff
  • 31. Selling the Project to the Masses Internal Staff •ALL departments were involved in the initial meeting and discussion •ALL departments understood and were committed to the reallocation of resources to make the project successful if needed.
  • 32. Selling the Project to the Masses Internal Staff • Committed to the fact that readership growth is a #1 priority for our newspaper and each department could play a role. • Sharing accountability for results and success
  • 33. What this has done for our Newspaper beyond Telemarketing • Focused the team • Improved interdepartmental cooperation • The Circulation department is now strategically aligned with other departments. • Positioned us for future growth
  • 34. Key Elements of the Test Project Bob Terzotis, Circulation Director The Jackson Sun (Jackson, TN)
  • 35. Why Eliminate Telemarketing • Restricted acquisition with Telemarketing as primary sales source • Telemarketing more expensive and less productive than originally thought • Limited targeting capability – Focus on Quality vs. Quantity • Gannett corporate said so!
  • 36. Key Areas to our Project • Analysis and Planning • Determining your Acquisition Goals • Acquisition Numbers to Watch • Retention as a Relationship Building Process • Diversifying the Sales Mix
  • 37. Project Goals • Eliminate telemarketing and diversify the sales mix • Reallocate current sales expense dollars • Test direct response marketing • Maximize resources, react quicker to trends • Produce a new circulation marketing model • Grow circulation!
  • 38. Replacing Units of Circulation, not starts S u b s cri ti n s R e tai e d p o n 1 2 ,0 0 0 1 0 ,0 0 0 8 ,0 0 0 A l S a l s S o u rc e s l e 6 ,0 0 0 T e l m a rke ti g e n 4 ,0 0 0 2 ,0 0 0 0 s n 2 6 0 4 8 2 6 0 4 8 2 io 4 8 pt 1 1 2 2 2 3 3 4 4 4 5 W W ri W W W W W W W W W W W sc ub S al ot T
  • 39. Maximizing other sources without creating dependency Sales Calculator for Jackson, TN Go to Sales Cost Calculator Diff. = Current Goal Goal Estimated - Es timate d Subscription Diff. = Goal - Subscription Sales Source 2002 Orders Current Orde rs Units Current Units Voluntary 3,300 -3,300 0 1,826 -1,826 0 - Direct Mail 128 -128 0 77 -77 0 - Single Copy Inserts 1,214 -1,214 0 733 -733 0 - Internet 1,006 -1,006 0 608 -608 0 - Crew 0 0 0 0 0 0 - Kiosks 25 -25 0 11 -11 0 - Kiosks-State 0 0 0 0 0 0 - Carrier/ Field 552 -552 0 360 -360 0 - Other 1,583 -1,583 0 382 -382 0 - Telemarketing - In House 11,652 -11,652 0 3,439 -3,439 0 - Total 19,460 -19,460 0 7,436 -7,436 0 - Calculate Instructions 1. Enter the goal for subscription units for each sales source 2. Press the calculate key
  • 40. Maximizing other sources without creating dependency Sales Calculator for Jackson, TN Go to Sales Cost Calculator Diff. = Current Goal Goal Estimated - Es timate d Subscription Diff. = Goal - Subscription Sales Source 2002 Orders Current Orde rs Units Current Units Voluntary 3,300 388 3,688 1,826 674 2,500 2,500 Direct Mail 128 700 828 77 423 500 500 Single Copy Inserts 1,214 111 1,325 733 67 800 800 Internet 1,006 157 1,163 608 94 702 702 Crew 0 0 0 0 0 0 Kiosks 25 -25 0 11 -11 0 Kiosks-State 0 0 0 0 0 0 Carrier/ Field 552 382 934 360 249 609 609 Other 1,583 -1,583 0 382 -382 0 - Telemarketing - In House 11,652 -11,652 0 3,439 -3,439 0 - Total 19,460 -11,522 7,938 7,436 -2,325 5,111 5,111 Calculate Instructions 1. Enter the goal for subscription units for each sales source 2. Press the calculate key
  • 41. Maximizing other sources without creating dependency Sales Calculator for Jackson, TN Go to Sales Cost Calculator Diff. = Current Goal Goal Estimated - Es timate d Subscription Diff. = Goal - Subscription Sales Source 2002 Orders Current Orde rs Units Current Units Voluntary 3,300 388 3,688 1,826 674 2,500 2,500 Direct Mail 128 700 828 77 423 500 500 Single Copy Inserts 1,214 111 1,325 733 67 800 800 Internet 1,006 157 1,163 608 94 702 702 Crew 0 3,054 3,054 0 1,145 1,145 1,145 Kiosks 25 3,029 3,054 11 1,138 1,149 1,149 Kiosks-State 0 3,054 3,054 0 1,150 1,150 1,150 Carrier/ Field 552 382 934 360 249 609 609 Other 1,583 -1,583 0 382 -382 0 - Telemarketing - In House 11,652 -11,652 0 3,439 -3,439 0 - Total 19,460 -2,360 17,100 7,436 1,119 8,555 8,555 Calculate Instructions 1. Enter the goal for subscription units for each sales source 2. Press the calculate key
  • 42. Determine other sources to replace remaining units C re w S al s R e te n ti n e o 1 0 0 .0 % 9 0 .0 % 8 0 .0 % 7 0 .0 % 6 0 .0 % 5 0 .0 % 4 0 .0 % 3 0 .0 % 2 0 .0 % 1 0 .0 % 0 .0 % rt 12 15 18 21 24 27 30 33 36 39 42 45 48 51 3 6 9 ta K K K K K K K K K K K K K K K K K S W W W W W W W W W W W W W W W W W C re w S a l s M o d e l 1 e
  • 43. Determine other sources to replace remaining units C re w S al s R e te n ti n e o 1 0 0 .0 % 9 0 .0 % 8 0 .0 % 7 0 .0 % 6 0 .0 % 5 0 .0 % 4 0 .0 % 3 0 .0 % 2 0 .0 % 1 0 .0 % 0 .0 % rt 12 15 18 21 24 27 30 33 36 39 42 45 48 51 3 6 9 ta K K K K K K K K K K K K K K K K K S W W W W W W W W W W W W W W W W W C re w S a l s M o d e l 1 e C re w S a l s M o d e l 2 e
  • 44. Develop flexible sales campaigns and materials
  • 45. Develop flexible sales campaigns and materials
  • 46. Build an extensive renewal strategy By actually talking to the subscribers! Segment subscriber base into three loyalty categories 90.0% 80.0% 70.0% 60.0% 50.0% <1 Yr 40.0% >1 Yr, <2 Yrs 30.0% >2 Yrs 20.0% 10.0% 0.0% % of Subscriber Base
  • 47. Build an extensive renewal strategy By actually talking to the subscribers! Segment subscriber base into three loyalty categories 250.0% 200.0% 150.0% <1 Yr >1 Yr, <2 Yrs 100.0% >2 Yrs 50.0% 0.0% Telemarketing All Sources
  • 48. Build an extensive renewal strategy By actually talking to the subscribers! Communicate with them by need
  • 49. Build an extensive renewal strategy By actually talking to the subscribers! Arm yourself with information • Name • Sorted by loyalty, touch • Address point • Phone Number • Source Code • Start Date • Promotion Code • Expiration Date/ Amount • 45 Day Service History Owed • Last Payment Amount
  • 50. Build an extensive renewal strategy By actually talking to the subscribers! View results separately by category and contact point • Possible Dials • Contacts / % Contacted • Messages left • Payments secured by type • Promise to pay • Already mailed payment • Stops • Service Problems
  • 51. Build an extensive renewal strategy By actually talking to the subscribers! Make adjustments to maximize results • Close contact gaps • Move or eliminate touch points • Change billing dates to minimize expenses • Test premium offers to specific sources or demographic areas
  • 52. Seed your operation for success Create tracking mechanisms to provide timely adjustments Reorganize staff and communicate new and altered roles
  • 53. Diversifying the Sales Mix D ire ct M a il C re w 1% S C In s e rts 0% 7% O n lin e 6% F ie ld 3% V o lu n ta ry 18% T e le m a rke tin g 65% 2002 Sales Mix
  • 54. V o lu n ta ry 20% C re w 27% F ie ld 6% O n lin e 7% S C in s e rts K io s k 10% 26% D ire ct M a il 4% “Life After Telemarketing” Planned Mix
  • 55. R e s ta rts fro m P a ym e n t R e n e w a l M a rke tin g (in cre m e n ta l) 4% 2% C re w 33% V o lu n ta ry 23% F ie ld K io s k 9% 4% O n lin e D ire ct M a il 7% 8% S C In s e rts 10% Current Sales Mix
  • 56. R e fe rra l P ro g ra m F u n d R a is in g 2% 5% C la s s ifie d A d ve rtis in g 2% C re w S a le s C o o rd in a to r 15% 3% R e n e w a l M a rke tin g 3% V o lu n ta ry 16% K io s k- M a d is o n 16% F ie ld 6% K io s k- S ta te 13% O n lin e 6% S C In s e rts D ire ct M a il 8% 5% Sales Mix – Projected 2004
  • 57. What we’ve learned… • Small, ongoing sales sources give you more flexibility • Contingency plans for your contingency plans • Better sales pressure, not more pressure • Focus on retention rates, not response rates • Spend time looking backward too
  • 58. Project-to-Date Results • Expense realities • Home delivery volume gains versus trends of the past • Churn improvements save expenses • Sales mix diversity continues • EZ Pay base increasing
  • 59. Diversifying the Sales Mix Mike Cusato, Vice President of Circulation The Honolulu Advertiser
  • 60. Impact of Legislation in Honolulu, Hawaii • No state DNC list • Federal DNC list added 38,100 to company DNC list • Total combined DNC list now 146,300 • DNC list represents almost 50% of households
  • 61. Strategy since 1999 • reduce dependence on telemarketing • reduce churn • increase retention
  • 62. Percentage of Order Volume By Source Phone Carrier Crew Vol Other Total 1999 65% 2% 9% 23% 1% 100% 2000 52% 4% 9% 24% 12% 100% 2001 57% 2% 5% 26% 10% 100% 2002 44% 5% 3% 29% 19% 100% 2003 28% 11% 8% 32% 22% 100%
  • 63. Percentage of Order Volume By Source Phone Carrier Crew Vol Other Total 1999 65% 2% 9% 23% 1% 100% 2000 52% 4% 9% 24% 12% 100% 2001 57% 2% 5% 26% 10% 100% 2002 44% 5% 3% 29% 19% 100% 2003 28% 11% 8% 32% 22% 100%
  • 64. CHURN 2003 2002 2001 2000 1999 Daily 31.3% 38.6% 82% 88.8% 93.6% Sunday 34.9% 40.3% 71% 49.6% 47.5%
  • 65. RETENTION Telemarketing Carrier Crew Voluntary Total 2001 36.1% 34.0% 78.7% 82.0% 57.9% 2002 40.9% 73.7% 72.8% 84.5% 66.0% 2003 41.8% 73.7% 70.5% 87.1% 72.0%
  • 66. READER REWARDS PROGRAM
  • 67. EZ PAY Growth By Quarter Q1 Q2 Q3 Q4 2000 4.9% 6.8% 8.1% 8.8% 2001 8.8% 9.5% 11.4% 12.2% 2002 12.5% 12.7% 13.4% 15.9% 2002 18.2% 19.7% 20.0% 20.5%
  • 68. EZ PAY Promotions • Hawaiian Airline Miles • Aloha Airline Miles • Boston Pizza • EZ-Getaway • EZ-Drive Away
  • 69. Results and Surprises from the Trenches Mark Henschen, Circulation Director North County Times (Escondido, CA)
  • 70. Results and Surprises from the Trenches • Quality of sales may have improved as a result of the federally mandated close procedures. • Volumes have decreased at most papers, however some experienced gains. • Circulation sales managers believe the future is still very much in doubt … but largely many fears have not been realized.
  • 71. Quality of Sales Improvement • Federal requirements now mandate the following disclosures at the close of a sell … • Cost • Quantity • Material Restrictions • Limitations • Conditions • Refund Policy
  • 72. 86% 86% 87% 87% 88% 88% 89% 89% 90% 9/16/2002 9/23/2002 9/30/2002 10/7/2002 10/14/2002 10/21/2002 10/28/2002 11/4/2002 4 week rolling average retention at the 4 week test 11/11/2002 11/18/2002 Retention substantially improved 11/25/2002 12/2/2002
  • 73. • Volumes have decreased at most papers, however some experienced gains. “Our outside telemarketer spent most of October becoming compliant with the DNC and did not sell hardly at all. But they rebounded in November and had the highest sales in the past 12 months! Our inside telemarketing has been renamed retention & resale, (R & R). They are focusing less on traditional telemarketing and more on R & R. I feel that the DNC has helped us separate the wheat from the chaff so to speak.” … Tim D. Smith Circulation Director The Herald-Times Bloomington, IN
  • 74. • Volumes have decreased at most papers, however some experienced gains. “Approximately 20.34% of our calling universe enlisted on the national registry. When combined with our internal list we have 33.34% of our market on a DNC list. We have also experienced a drop in telemarketing calls of approximately 37%.” … Andy Morgan Sales Manager The Post and Courier Charleston, SC
  • 75. • Volumes have decreased at most papers, however some experienced gains. “I can’t speak for everyone in New York but our telemarketing numbers did not suffer due to the National Do Not Call List. I think it had to do with New York’s do not call list which had already been in force for a few years.” … Elmer J. Kuehner Circulation Director The Leader Corning, NY
  • 76. • Volumes have decreased at most papers, however some experienced gains. “We eliminated all outbound telemarketing on Oct 1, with the exception of contacting ‘new movers’ to the area. As a result, we are only slightly off of last year’s numbers and have seen about a 20% decrease of past due amounts over the last two months.” … Tom Aldrich Circulation Leader Cadillac News
  • 77. • Circulation sales managers believe the future is still very much in doubt … but largely, many fears have not been realized … some comments … • It is still “early in the game”. • Cycle times have not yet had an opportunity to reflect their impact on the numbers. • While many expected a 30% drop in volume, declines of 15% to 25% are more common. • Many still concerned about the long-term number of households that will end up on the DNC list … how high will it go?
  • 78. Telemarketing: Winners, Losers and Tales from the Trenches Thank you. Questions & Discussion