Publishers Prepare for Life After Telemarketing

By: Lucia Moses Even before the national do-not-call list was created, publishers were trying to decrease their reliance on telemarketing as a sales method, recognizing its growing unpopularity with consumers. But The Jackson (Tenn.) Sun found itself ahead of the game a few months ago when parent Gannett Co. Inc. asked it to be the test site for an experiment envisioning life after telemarketing. Already, circulation is showing improvement.

The idea came out of a corporate meeting in January, during which one participant asked, "Why don't we take a newspaper and look at it like a petri dish experiment?" said Rob Althaus, corporate vice president of circulation. The industry's shift away from telemarketing -- the source of 39.1% of all starts and 54.1% of involuntary starts overall -- intensified with the creation of the national list that took effect Oct. 1, and threatens violators who call households on the list with $11,000 fines. While the list faces court challenges, publishers are going on the assumption that telemarketing will play a lesser role in their operations, and are shifting to other acquisition methods.

Knight Ridder estimates that depending on how many people opt out of telemarketing calls, its papers will have to replace a total of 85,000 to 170,000 new orders annually that would have been acquired through telemarketing, given that about 55% of their total subscription orders currently come from phone solicitations, spokesman Polk Laffoon IV said.

The McClatchy Co. began transitioning from telemarketing a few years ago; 29% of its total orders are solicited by phone, down from 42% in 2001, said Bob Weil, a vice president of operations: "We believe putting more emphasis on direct marketing, door crews, carrier contests, and kiosks produces stronger orders." Those other methods, of course, tend to be costlier.

Jackson Sun Publisher Ed Graves admitted that when his boss called him last March to tell him he could no longer use telemarketing, "I wanted to drop the phone and let it fall to the floor." Telemarketing accounted for 65% of new orders, while the number of its market's households on Tennessee's do-not-call list had ballooned. Graves said telemarketing overkill was in large part to blame for the paper's circulation declines over the past few years. (It now stands at 35,575, Monday-Saturday).

So three months ago, the Sun eliminated its 15 part-time telemarketers. It diversified its sales sources and created a department to focus solely on renewals. Using R-Logic software from Astech InterMedia of Denver, the paper was able to track retention by offer and quickly adjust sales pressure and prices accordingly, which Graves, a former circulation exec, described as "light-years ahead of anything I'd been doing."

A Claritas analysis of the Sun's subscriber base allowed the paper to develop customized direct marketing pieces to replace its one-size-fits-all offers.

Graves said that while it's too early to claim total success, "I think it's working." From June to August, restarts are up 60.4%, stops due to nonpayment are down 6.8%, and autopay enrollment is up 16.1% over the same period a year ago. By this time next year, his goals are to grow circ by 0.2% weekday and 0.4% Sunday, and improve retention by 10%. But without telemarketing, said Cathy Garrett, market development director, "It's going to be up to us to keep that sales pressure on the market."

Will all Gannett papers be following the Jackson example? Not quite, Althaus said. While he expects Gannett's 99 U.S. dailies (excluding USA Today) to reduce reliance on telemarketing to 32% of new orders by year's end from 40% now, "There will still be some telemarketing done, whether it's retention telemarketing or very targeted telemarketing. But it will be a much smaller percent" of new orders.