telemarketing: telemarketing:

Telemarketing:Telemarketing:

Winners, Losers andWinners, Losers andTales from theTales from the

TrenchesTrenches

Update:Update:

TelemarketingTelemarketingRegulations and theRegulations and the

ImpactImpact

John Murray, Vice PresidentJohn Murray, Vice PresidentCirculation MarketingCirculation Marketing

NAANAA

• Observation•Regulations

•Prognostication

•• ObservationObservation•• RegulationsRegulations

••PrognosticationPrognostication

Impact:Impact:

It DependsIt Depends

Decline in Newspaper TelemarketingDecline in Newspaper Telemarketing Share of Share of Telemarketing Telemarketing Subscription Sales: Subscription Sales: Orders: Orders:

2002 2002 Telemarket Telemarket 54.1% 54.1% 11.9 million11.9 million

2000 2000 TelemarketTelemarket 57.8% 57.8% 15.0 million15.0 million

1998 1998 TelemarketTelemarket 59.0% 59.0% 11.8 million11.8 million

The RegulationsThe Regulations

Federal Do Not Call List:

•Less Numbers to Dial

•Tightening Rotations

•Reduced Number of Orders

•Higher Close Rates?

Federal Do Not Call List:Federal Do Not Call List:Do I call the Numbers on the DNC withDo I call the Numbers on the DNC withan existing Business Relationship?an existing Business Relationship?

Federal Predictive Dialer Regulations:Federal Predictive Dialer Regulations:

••Investments in TechnologyInvestments in Technology

••Learning Curve ImpactLearning Curve Impact

••Achieving a Lower Abandonment Rate Achieving a Lower Abandonment Rate = Lower Productivity & Lower Contact Rates= Lower Productivity & Lower Contact Rates

••Larger Campaigns Necessary to Manage LostLarger Campaigns Necessary to Manage LostCall RatesCall Rates

••High Close Rates?High Close Rates?

More Observations:

Third area of new Federal Regulations:

•Express Informed Consent

•Express Verifiable Authorization

Interest - Consent -Commitment

Caller I.D. Requirements:Caller I.D. Requirements:

January 29January 29thth 2004 2004

Let’s summarize:

•Smaller Universe of Numbers

•Lower Contact Rates

•Telemarketing Smaller Percentage of Total Sales

•Increased Outsourcing of TelemarketingFunction

Targeted Sales – up!

Cost Per Order – up!

Advance Paid – up!

Higher Retention –maybe!

To be Resolved:

Regulation E

FCC Portability Rules

Federal Reserve’s Regulation E

-Use of Debit Cards

FCC Portability Issues

-Identification of Cell Phones

First, NAA is about to launch anonline TelemarketingCompliance service!

Coming in February:Coming in February:

NAA Online Regulatory GuideNAA Online Regulatory Guide

Secondly, next month we willSecondly, next month we willpublish a new telemarketingpublish a new telemarketing

compliance guide.compliance guide.

Third,Third,

We will continue to fax and e-mailWe will continue to fax and e-mailyou updates on new regulations andyou updates on new regulations andthe enforcement policies as theythe enforcement policies as theybecome more apparent.become more apparent.

Telemarketing will remain aviable source of SubscriptionSales and a tool for subscriberretention –

just different.

Summary:

Thank you very much for yoursupport!

Elimination of Telemarketing-Elimination of Telemarketing-Test ProjectTest Project

Ed Graves, PublisherEd Graves, PublisherThe Jackson Sun (Jackson, TN)The Jackson Sun (Jackson, TN)

Jackson, TennesseeElimination of Telemarketing

Test Project

Jackson, TennesseeElimination of Telemarketing

Test Project

• The Circulation department had becomesomewhat immune to declining readership.

Why the Test Project Was Right for Jackson

• Home delivery was declining an average of 4.6%the past 4 years.

Why the Test Project Was Right for Jackson

• New Circulation leadership and progressivethinking

• Reversing readership decline was the top priorityfor all departments at the newspaper

Selling the Project to the Masses

Internal Staff

Selling the Project to the Masses

Internal Staff

Selling the Project to the MassesInternal Staff

•ALL departments were involved in the initialmeeting and discussion

•ALL departments understood and were committedto the reallocation of resources to make the projectsuccessful if needed.

• Committed to the fact that readership growth isa #1 priority for our newspaper and eachdepartment could play a role.

• Sharing accountability for results and success

Selling the Project to the MassesInternal Staff

What this has done for our Newspaperbeyond Telemarketing

• Focused the team• Improved interdepartmental cooperation• The Circulation department is now strategically

aligned with other departments.• Positioned us for future growth

Key Elements of theKey Elements of theTest ProjectTest Project

Bob Bob TerzotisTerzotis, Circulation Director, Circulation DirectorThe Jackson Sun (Jackson, TN)The Jackson Sun (Jackson, TN)

Why Eliminate TelemarketingWhy 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!

Key Areas to our ProjectKey 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

Project GoalsProject Goals

• Eliminate telemarketing and diversify the salesmix

• Reallocate current sales expense dollars• Test direct response marketing• Maximize resources, react quicker to trends• Produce a new circulation marketing model• Grow circulation!

Replacing Units of Circulation, not startsS u b s crip tio n s R e tain e d

10,000

12,000

riptio

A ll S ales S ources

Telem arketing

Maximizing other sources without creating dependencySales Calculator for Jackson, TN

Calculator

Sales Source 2002 Orders

Diff. = Estimated -

CurrentEs timate d

Orde rs

Current Subscription

UnitsDiff. = Goal -

Current

Goal Subscription

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 -

Instructions1. Enter the goal for subscription units for each sales source2. Press the calculate key

Calculate

Go to Sales Cost

Calculator

Diff. = Estimated -

CurrentEs timate d

Orde rs

UnitsDiff. = Goal -

Current

Goal Subscription

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 0Kiosks 25 -25 0 11 -11 0Kiosks-State 0 0 0 0 0 0Carrier/ 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

Go to Sales Cost

Calculator

Diff. = Estimated -

CurrentEs timate d

Orde rs

UnitsDiff. = Goal -

Current

Goal Subscription

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

Go to Sales Cost

Determine other sources to replace remaining unitsC re w S ale s R e te n tio n

100.0%

C rew S ales M odel 1

Determine other sources to replace remaining unitsC re w S ale s R e te n tio n

100.0%

C rew S ales M odel 1 C rew S ales M odel 2

Develop flexible sales campaigns and materials

Build an extensive renewal strategy

Segment subscriber base into three loyalty categoriesBy actually talking to the subscribers!By actually talking to the subscribers!

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

% of Subscriber Base

<1 Yr>1 Yr, <2 Yrs>2 Yrs

Segment subscriber base into three loyalty categoriesBy actually talking to the subscribers!By actually talking to the subscribers!

100.0%

150.0%

200.0%

250.0%

Telemarketing All Sources

<1 Yr>1 Yr, <2 Yrs>2 Yrs

Communicate with them by need

Build an extensive renewal strategyBy actually talking to the subscribers!By actually talking to the subscribers!

Arm yourself with informationBy actually talking to the subscribers!By actually talking to the subscribers!

• Name• Address• Phone Number• Start Date• Expiration Date/ Amount

• Sorted by loyalty, touchpoint

• Source Code• Promotion Code• 45 Day Service History• Last Payment Amount

View results separately by category and contact pointBy actually talking to the subscribers!By actually talking to the subscribers!

• Possible Dials• Contacts / % Contacted• Messages left• Payments secured by type• Promise to pay• Already mailed payment• Stops• Service Problems

Make adjustments to maximize resultsBy actually talking to the subscribers!By actually talking to the subscribers!

• Close contact gaps• Move or eliminate touch points• Change billing dates to minimize expenses• Test premium offers to specific sources or

demographic areas

Create tracking mechanisms to providetimely adjustments

Seed your operation for success

Reorganize staff and communicate newand altered roles

2002 Sales Mix2002 Sales Mix

T e le m a rke tin g

V o lu n ta ry

F ie ld

O n lin e

S C In s e rts

C re w

D ire ct M a il

Diversifying the Sales Mix

“Life After Telemarketing” Planned Mix“Life After Telemarketing” Planned Mix

F ie ld

O n lin e

S C in s e rts

D ire ct M a il

K io s k

C re w

V o lu n ta ry

Current Sales MixCurrent Sales Mix

V o lu n ta ry

F ie ld

O n lin e

7 %S C In s e rts

D ire ct M a il

K io s k

C re w

R e n e w a l M a rke tin g

4 %R e s ta rts fro m P a ym e n t

(in cre m e n ta l)

Sales Mix – Projected 2004Sales Mix – Projected 2004

R e fe rra l P ro g ra m

2 %F u n d R a is in g

5 %C la s s ifie d A d ve rtis in g

S a le s C o o rd in a to r

R e n e w a l M a rke tin g

C re w

K io s k- M a d is o n

K io s k- S ta te

D ire ct M a il

5 %S C In s e rts

O n lin e

F ie ld

V o lu n ta ry

What we’ve learned…What we’ve learned…

• Small, ongoing sales sources give you moreflexibility

• Contingency plans for your contingency plans• Better sales pressure, not more pressure• Focus on retention rates, not response rates• Spend time looking backward too

Project-to-Date ResultsProject-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

Diversifying the Sales Mix Diversifying the Sales Mix

Mike Mike CusatoCusato, Vice President of, Vice President ofCirculationCirculation

The Honolulu AdvertiserThe Honolulu Advertiser

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

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

Strategy since 1999

• reduce dependence on telemarketing• reduce churn• increase retention

Strategy since 1999

• reduce dependence on telemarketing• reduce churn• increase retention

Percentage of Order VolumeBy Source

Phone Carrier Crew Vol Other Total1999 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%

Percentage of Order VolumeBy Source

Phone Carrier Crew Vol Other Total1999 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%

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%

CHURNCHURN

20032003 2002 2002 2001 2000 1999 2001 2000 1999

DailyDaily 31.3%31.3% 38.6% 82% 88.8% 93.6% 38.6% 82% 88.8% 93.6%

SundaySunday 34.9%34.9% 40.3% 71% 49.6% 47.5% 40.3% 71% 49.6% 47.5%

RETENTIONRETENTION

TelemarketingTelemarketing CarrierCarrier Crew Crew Voluntary Voluntary TotalTotal

20012001 36.1% 36.1% 34.0% 78.7% 82.0% 34.0% 78.7% 82.0% 57.9%57.9%

20022002 40.9% 40.9% 73.7% 72.8% 84.5% 73.7% 72.8% 84.5% 66.0%66.0%

20032003 41.8% 41.8% 73.7% 70.5% 87.1% 73.7% 70.5% 87.1% 72.0%72.0%

READER REWARDSPROGRAM

EZ PAY GrowthEZ PAY GrowthBy QuarterBy Quarter

Q1Q1 Q2Q2 Q3Q3 Q4Q4

20002000 4.9%4.9% 6.8%6.8% 8.1%8.1% 8.8%8.8%

20012001 8.8%8.8% 9.5%9.5% 11.4%11.4% 12.2%12.2%

20022002 12.5%12.5% 12.7%12.7% 13.4%13.4% 15.9%15.9%

20022002 18.2%18.2% 19.7%19.7% 20.0%20.0% 20.5%20.5%

EZ PAY PromotionsEZ PAY Promotions

•• Hawaiian Airline Miles Hawaiian Airline Miles

•• Aloha Airline Miles Aloha Airline Miles

•• Boston Pizza Boston Pizza

•• EZ-Getaway EZ-Getaway

•• EZ-Drive Away EZ-Drive Away

Results and Surprises from theResults and Surprises from theTrenchesTrenches

Mark Mark HenschenHenschen, Circulation Director, Circulation DirectorNorth County Times (Escondido, CA)North County Times (Escondido, CA)

Results and Surprises from the Trenches

• Quality of sales may have improved as a resultof the federally mandated close procedures.

• Volumes have decreased at most papers,however some experienced gains.

• Circulation sales managers believe the future isstill very much in doubt … but largely manyfears have not been realized.

Results and Surprises from the Trenches

•• Quality of sales may have improved as a resultQuality of sales may have improved as a resultof the federally mandated close procedures.of the federally mandated close procedures.

•• Volumes have decreased at most papers,Volumes have decreased at most papers,however some experienced gains.however some experienced gains.

•• Circulation sales managers believe the future isCirculation sales managers believe the future isstill very much in doubt … but largely manystill very much in doubt … but largely manyfears have not been realized.fears have not been realized.

Quality of Sales Improvement

• Federal requirements now mandate the followingdisclosures at the close of a sell …• Cost• Quantity• Material Restrictions• Limitations• Conditions• Refund Policy

Quality of Sales ImprovementQuality of Sales Improvement

•• Federal requirements now mandate the followingFederal requirements now mandate the followingdisclosures at the close of a sell …disclosures at the close of a sell …•• CostCost•• QuantityQuantity•• Material RestrictionsMaterial Restrictions•• LimitationsLimitations•• ConditionsConditions•• Refund PolicyRefund Policy

Retention substantially improvedat the 4 week test

Retention substantially improvedRetention substantially improvedat the 4 week testat the 4 week test

4 week rolling average retention

• Volumes have decreased at most papers, howeversome experienced gains.

“Our outside telemarketer spent most of October becomingcompliant with the DNC and did not sell hardly at all. Butthey rebounded in November and had the highest sales inthe past 12 months! Our inside telemarketing has beenrenamed retention & resale, (R & R). They are focusingless on traditional telemarketing and more on R & R. I feelthat the DNC has helped us separate the wheat from thechaff so to speak.” … Tim D. Smith CirculationDirector

The Herald-Times Bloomington, IN

•• Volumes have decreased at most papers, howeverVolumes have decreased at most papers, howeversome experienced gains.some experienced gains.

“Our outside telemarketer spent most of October becomingcompliant with the DNC and did not sell hardly at all. Butthey rebounded in November and had the highest sales inthe past 12 months! Our inside telemarketing has beenrenamed retention & resale, (R & R). They are focusingless on traditional telemarketing and more on R & R. I feelthat the DNC has helped us separate the wheat from thechaff so to speak.” … Tim D. Smith CirculationDirector

The Herald-Times Bloomington, IN

“Approximately 20.34% of our calling universe enlisted on thenational registry. When combined with our internal list wehave 33.34% of our market on a DNC list. We have alsoexperienced a drop in telemarketing calls of approximately37%.” … Andy Morgan Sales Manager

The Post and Courier Charleston, SC

“Approximately 20.34% of our calling universe enlisted on thenational registry. When combined with our internal list wehave 33.34% of our market on a DNC list. We have alsoexperienced a drop in telemarketing calls of approximately37%.” … Andy Morgan Sales Manager

The Post and Courier Charleston, SC

“I can’t speak for everyone in New York but our telemarketingnumbers 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 whichhad already been in force for a few years.”

… Elmer J. Kuehner Circulation Director The Leader

Corning, NY

“I can’t speak for everyone in New York but our telemarketingnumbers 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 whichhad already been in force for a few years.”

… Elmer J. Kuehner Circulation Director The Leader

Corning, NY

“We eliminated all outbound telemarketing on Oct 1, withthe exception of contacting ‘new movers’ to the area. As a result, we are only slightly off of last year’snumbers and have seen about a 20% decrease of pastdue amounts over the last two months.”

… Tom Aldrich Circulation Leader Cadillac News

“We eliminated all outbound telemarketing on Oct 1, withthe exception of contacting ‘new movers’ to the area. As a result, we are only slightly off of last year’snumbers and have seen about a 20% decrease of pastdue amounts over the last two months.”

… Tom Aldrich Circulation Leader Cadillac News

• Circulation sales managers believe the future isstill very much in doubt … but largely, manyfears have not been realized … somecomments …

• 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 theDNC list … how high will it go?

•• Circulation sales managers believe the future isCirculation sales managers believe the future isstill very much in doubt … but largely, manystill very much in doubt … but largely, manyfears have not been realized … somefears have not been realized … somecomments …comments …

•• It is still “early in the game”.It is still “early in the game”.•• Cycle times have not yet had an opportunity toCycle times have not yet had an opportunity to

reflect their impact on the numbers.reflect their impact on the numbers.•• While many expected a 30% drop in volume,While many expected a 30% drop in volume,

declines of 15% to 25% are more common.declines of 15% to 25% are more common.•• Many still concerned about the long-termMany still concerned about the long-term

number of households that will end up on thenumber of households that will end up on theDNC list … how high will it go?DNC list … how high will it go?

Telemarketing:Telemarketing:

Winners, Losers and TalesWinners, Losers and Talesfrom the Trenchesfrom the Trenches

Thank you.Thank you.Questions &Questions &DiscussionDiscussion

telemarketing: telemarketing:

creating dependencysales

extensive

extensive

segment subscriber

circulation

sales source

current goalgoalestimated

subscription

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