Newspapers Doing More With Less: Boost Retention at a Lower Cost by Outsourcing

By Bob Davis

Now more than ever, circulation managers are being asked to do more with less. I’m sure that as you have done and redone your budgets for next year, you have looked for every possible nickel to save yet even more savings are required. So let me suggest a great place to look to cut costs while actually increasing your output. Outsource your retention calls.

Now I know that when ask retention managers how things are going, they’re likely to tell you that the reps are doing a great job, but beware. I’ve found several common problems exist even when reports are positive.

Bad timing, wrong strategy
Most in-house retention teams spend way too many hours calling during daytime hours, not a very productive time to try reaching your customers.

Chances are that your retention team is calling way too early in grace. More than 50 percent of your early-grace subscribers will pay on their own. Calling too early gets sales that the newspaper would have received anyway by just waiting a week or two for the check to come in the mail.

And in-house retention teams try to save subscribers with a discount strategy instead of using a quality conversation approach to sell value over price.

The best way to boost your subscriber retention is to call deep in grace, or more than two-thirds of the way into the grace period, and to have quality conversations centered on value, not price, with every subscriber you contact.

The robust call flow
Having a quality conversation requires a robust call flow. This begins with a world-class greeting. The first 15 seconds of a call determine how the rest of the call goes, so the greeting must convey enthusiasm, assurance of help from the very start, plus clarity of purpose.

Next is discovery. We need to understand the subscriber’s wants, interests and needs as well as the true reason he or she has fallen into grace. We discover these variables by listening, restating and assuring help, drawing out hidden concerns, isolating primary concerns, finding areas to add value, and bridging to a solution.

We have to present a solution that strikes a chord with the subscriber. If we’ve done a good job at discovery, the solution will present itself. This is the essence of consultative selling.

Next, if we have provided a solution that adds value and addresses the subscriber’s wants, interests and needs, the subscriber is ready to respond positively to the offer—but it, too, must be presented correctly.

Then comes the assumptive close. If the call flow is handled correctly, closing the sale with an assumptive approach will, time after time, win the save.

The quality conversation:
A robust call flow provides five actionable steps to improve your in-grace calling


The problem is that many newspapers don’t have the resources, especially these days, to provide the training and coaching needed for their teams to master the quality conversation.

Comparing performance
Now that you are looking for every possible way to cut costs and boost revenue, conduct a test. Find a quality retention outsourcer and split your records for two or three weeks between the outsourcer and your in-house team.

I predict that the outsourcer will do the calls cheaper and better. And with today’s budgetary demands, it’s worth finding out whether or not I’m right.

###

Call center expert Bob Davis is president of Robert C. Davis and Associates, a training, coaching and consulting company specializing in the newspaper industry. He is also co-founder and managing partner of Surpass, an outsource call center handling customer service, retention, telemarketing and advertising sales calls for newspapers and other companies. Both companies are based in Bedford, New Hampshire. More information is available at www.robertcdavis.net and www.surpasscalls.com or by calling 603.472.9705.

Outbound classified sales: How to trade fear and avoidance for self-confidence and top performance

By Bob Davis

Lately I have been teaching a group of long-term inbound classified reps I consider to be among my favorites. The other day while I was teaching, a woman in the class who had been with the newspaper for more than 30 years told the group a story about computers being introduced to the department in the 1980s. Back then she and the other reps were afraid they would get cancer working so close to the computer screen for extended periods.

One of her co-workers was so concerned that she made a cone-shaped hat and a nose protector out of aluminum foil to shield herself from the presumed radiation coming from the monitor. She was so convincing in her fear that she got others in the department to wear this silly outfit. Looking back now it’s laughable. It also brings to mind an important question. Do we fear making outbound calls today the way reps in the 1980s feared computer monitors?

Indeed, I believe the number-one factor holding reps back from making outbound calls is fear driven by lack of self-confidence. This leads to avoidance behavior. In my experience in newspaper call centers, most classified reps will do just about anything to avoid making an outbound call.

The good news is that we’ve been very successful in helping reps overcome fear and avoidance by showing them how to make better outbound calls, and more of them. Here’s how:

• Be enthusiastic. If you look like you’re having fun while you are making the calls, reps will be more willing to give it a try. I like to teach a two-hour class first thing in the morning on a slow day. Then I follow the class back to the floor and work with each rep as they make outbound calls. Sometimes I make three calls, and then they make three calls, laughing and having a good time along the way. Other reps tune in to what is happening to the point that they become eager to work with me. Enthusiasm really is the key to the success.

• See the good. When we first begin working on outbound calls, reps stumble. After every call I could tell them everything they’ve done wrong, but I don’t. This would deflate them! Instead, I focus on the good things they’ve done on the calls. This builds them up and they become more open to coaching.

• Expect the best. In the beginning most reps have only been making about six dials per hour, so they look at me in shock when I tell them I expect 30 dials per hour. Yet once the expectation is out there, they do it. Even if the rep’s skills don’t improve (they always do), results improve dramatically because the reps are talking to so many more people.

• Celebrate success. At the end of each day, we have a celebration. Everyone gets to tell about their successes that day—how many outbound calls they made, how much money they generated. This really gets everyone excited about what they can do.

Based on my experience, implementing these ideas—being enthusiastic, seeing the good, expecting the best, and celebrating success—will help your reps improve dramatically. It’s the kind of leadership and confidence-building that newspaper classified departments need badly today.

My recommendation is to get started right away. You’ll love the results.

Need to know: Call monitoring and mystery calls prove vital to classified departments

By Bob Davis

Over the past year or so, based on the needs of some of our newspaper clients, we have begun to provide quality monitoring and mystery caller services for classified advertising sales departments—with very positive results.

We have learned a great deal from the experience. In fact, I am thinking about writing a book entitled I Heard What Your Potential Advertisers Had To Say Yesterday. In the meantime, however, I’ll share some of what we have learned right here and now.

Present feedback positively.
At first we were resistant to start monitoring because feedback can feel like “Gotcha!” to the sales reps. Studies have found that stress among reps goes up during monitoring. They tend to shut down if the feedback is not delivered correctly, negating the potential benefits. Ultimately, however, we decided that as long as we present feedback in a positive way we will achieve desired results. Our solution has been to make sure 80 percent of the feedback is positive so that the reps are receptive to the 20 percent that specifies areas where they can improve performance.

Provide actionable feedback.
When reps hear about what they did well on the calls, they are more likely to repeat those behaviors. Where they need improvement, it is critical to give them specific actions to take. For example, make suggestions such as, “Decrease the number of set-aside ads by asking customers how important it is for them to sell the item or fill the position—this helps them see value in the ad.”

Deliver feedback in real time.
It just isn’t very effective to say, “Last month we listened to some of your calls, and this is what we think.” Giving feedback daily is much more meaningful because the reps remember the calls being discussed.

Score the calls objectively.
Before we monitor calls, we work with the client to develop questions that will allow objective scoring. We recommend questions like, “Did the sales rep assume the online buy and include it when quoting the price?” instead of more subjective ones like, “Was the sales rep polite?”

Boost sales revenue.
We have been able to benchmark key metrics with newspapers that want to participate and share their data to see where they stand compared with other newspapers. What’s more, our clients have benefited significantly from our approach to quality monitoring and mystery caller services because we have harvested highly valuable information. For every customer who calls in and doesn’t buy, we record the reason. We also document issues such as how often money comes up as an objection. The whole process gives newspapers the information needed to reinforce best practices, solve problems effectively and boost sales revenue dramatically.

Yet classified departments don’t always have needed resources in-house to do the job. Besides their own reps, many classified departments rely on outsource call centers to handle overflow calls, making monitoring and mystery callers even more important.

Now more than ever it is critical for newspapers to generate maximum revenue in ad sales. They need to know what’s happening on their classified sales calls. Outsourcing your call monitoring and mystery calls is an excellent way to verify whether or not your classified department is achieving all it can. And in our experience, what newspapers learn in the process provides a significant return on investment.

Transforming the customer service center

Don’t settle for expense when you can have profit

By Bob Davis

Your customer service department does not have to be an expense. It can indeed be a profit center. Yes, you read that right -- a profit center! I will explain how in a minute, but first let me tell you a story.

I got a call last Monday from my father. He and my mother spend their winters in Florida and they were packing to make their migration north when he gave me a call.

“Bob, you have got to come down here to Florida and help this [expletive deleted] paper.”

“Why?” I asked. “What’s wrong?”

“I had to call them seven times to get my paper put on a temporary stop.”

“What happened on the first six calls?” I queried.

“Well, you know I don’t hear well,” he said. “The first six times I called, I could not understand a word they said.”

“So what happened on the seventh call?” I asked.

“My neighbor had the number for the office downtown, a number that doesn’t go overseas, and I called them,” he said. “The lady who answered was very nice. She says she gets a lot of calls like this. I’m keeping her number!”

When we do the math on why a customer care department here in the United States can be a profit center, we won’t count the cost of multiple calls to your overseas outsourcer. We won’t count the costs of the hundreds of calls a day that now come to the few people still answering the phone stateside. We will, however, count the value of doing an excellent job.

Consider these facts about cancellation calls:

• One of the performance differentiators between an average customer service operation and an excellent one is the saves rate on cancellation calls. With good effort, an average operation can get a 20-percent saves rate. An excellent operation can get a saves rate of more than 40 percent.

• Ten percent of all calls coming into the typical customer service operation at a newspaper are cancellation requests. In a paper with circulation of 200,000 customers and 600,000 calls a year, that’s 60,000 cancellation requests. An extra 20 percent on the saves rate means an extra 12,000 saves per year. That's 12,000 fewer paid in advance orders you will need to write. At $40 per order, that adds up to $480,000 per year.

Now let’s look at EZ Pay conversions:

• Industry statistics say that a subscriber on EZ Pay will keep the subscription going twice as long as someone who is not on EZ Pay. So every EZ Pay sale is worth $40 to the paper (one less order to write).

• The average customer service operation converts less than one percent of call volume to EZ Pay. An excellent one gets more than six percent. An extra five percent in EZ Pay conversion on call volume of 600,000 calls per year means an extra 30,000 EZ Pays per year. At $40 each, that’s $1.2 million dollars to the enterprise.

Assuming it costs you $1.50 per call to take calls with excellence, your cost of operation is $900,000 per year for 600,000 calls. Your income from just the cancellation saves and EZ Pay conversions is almost $1.7 million—more than $780,000 in profit!

Is it easy to get these kind of results? No, but I have seen it done in top-performing newspapers around the country.

The question I put forth is this: At a time when the economics of the newspaper industry are so challenging, why settle for your customer service department being an expense when it could be a profit center?

Take Theodore Roosevelt’s advice: Dare greatly

By Bob Davis

Picture a scene in the boardroom of a large newspaper chain. I have just presented a proposal that will require a considerable investment but will deliver a fantastic return. It’s decision time, yet many of the leaders in the room seem only to be looking at their shoes. At last a mid-level manager speaks up. “This is a great idea,” he says. “I think we should do it.” What a hero!

Now is prime time for newspaper managers who can take charge, influence others and exert authority. The young man in the scene above owns the project. If it works, it will make his career.

In my ongoing work with newspapers over the years, I have seen what makes leaders highly effective—and what makes them less effective or even paralyzed—during trying times.

Being decisive, taking action

The young mid-level manager who speaks up for action while others contemplate their shoe shines is an example of what it takes to be highly effective—quick decisions. True, the industry is in uncharted waters right now, and nobody will make the right move every time. But it is better to make mistakes once in a while than to do nothing for fear of making the wrong decision. Such paralysis will doom the newspaper to continued decline in circulation and advertising revenue.

Consider this quotation from Theodore Roosevelt. “It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.”

Supporting top performance

Besides decisiveness and taking action, it is critical in these times for executives and managers to ask their people to function at their very best. This does not mean pushing them beyond reason or burning them out. Instead, leaders must set goals that are worthy of the highest aspirations of the group and communicate those goals over and over again until they are accomplished.

Do you expect a great deal from your people? If asked, would they say you are always testing their limits? Would they say you have high aspirations for them? Would they know their top priority?

What’s more, have you made sure they have the skills and training to achieve their goals? Screams from the stands don’t get baseball players their hits. Batting practice does. Your people can excel only if you make sure they have the skills, training and tools to excel.

Having a sense of urgency

Thriving despite today’s challenges in our industry requires a sense of urgency. One successful executive I know is an excellent example. As publisher for one newspaper and regional vice-president of a group of newspapers, he:

• Returns all calls within 24 hours.
• Returns all email with 24 hours.
• Makes decisions quickly. (On one Monday I sent him four large proposals requiring big-dollar decisions. By the end of the week he had rejected three and accepted one.)
• Does what he says he will do, when he says he will do it.

The fire of enthusiasm

Finally, a leader’s ability to help people feel good about themselves and their work is the very essence of leadership. Toward that end, leaders capture followers emotionally with enthusiasm. So, do you light your fire of enthusiasm every day before you arrive at work? Doing so brings positive energy into the organization—not only among subordinates but also among colleagues and superiors.

Making the Cut: Selling your online partnership

(This article was originally published in the latest edition of Inside Call Center, published by MacDonald Advertising Services.)

By Bob Davis

I love the story of the old-time logger who had always done his work with a two-blade axe. His son left the Maine woods to go to college, and while he was away he sent his father a gas-powered chainsaw. The son called home to ask how his father liked it. His father answered that it was all right, but he preferred his axe. The son was puzzled. How could his father not love the chainsaw?

The son came home on break determined to show his father what a great tool the chainsaw was. He gave a couple of sharp pulls on the starter cord while his father watched. When the engine fired up, the father exclaimed, “What’s that noise?”

The story provides an apt analogy to how most newspapers are selling the full functionality of their online partnerships compared to what they could be accomplishing. When publishers and advertising executives hear what these partnerships can do with their motors running, they will ask, “What’s that noise?” And it will be the sound of money coming in!

Most people tasked with selling online advertising have received product-knowledge training, but that is not enough. In fact, studies have shown that a salesperson’s product knowledge is only 15% of what is needed to be successful in sales. If product knowledge was all they needed, home builders would sell their own houses instead of turning the job over to REALTORS®. Selling skills are more important than product knowledge.

First, salespeople must be skilled at asking key needs analysis questions on every call such as:

• How hard is it going to be to fill that job?
• How many viable candidates are in the local market?
• Would you like to go after viable candidates rather than waiting for them to come
to you?
• What will it mean to you to fill that critical position more quickly?

The next selling skill is to use responses to questions like those above to create and present a customized solution to the customer in a compelling way.

Then comes the need to overcome objections. I spoke recently with a salesperson newly tasked to sell online employment ads. He told me he would rather make cold calls to a business that had never advertised with the newspaper than try to sell the online partner to an advertiser already running ads on the competitor’s Web site. Why? He said he did not know how to answer their objections.

There are so many features and benefits to sell — such as résumé search and candidate search — and we are just scratching the surface in selling these high-ticket items.

Just about everyone reading this article probably knows how to use needs analysis. I have little doubt that you also know how to deliver customized, compelling solutions and how sales success requires being able to overcome objections. But with so much money to be earned from online partnerships, I have to ask a question: What would it mean to your newspaper if your sales reps received intensive training on skills and knowledge that would empower them to sell all the online functionality more effectively?

Trying to sell without the right skills is like using a chainsaw without the motor running. It’s possible to make the cut, but it’s much less effective.

For more information on MacDonald Advertising Services, please visit GoMacDonald.com.

Impressed by Tribune’s ‘new sheriff‘

A great future for newspapers rests on an effectiveness-versus-efficiency mindset

By Bob Davis

I was very impressed last month when I read about how real estate mogul Sam Zell (photo - Kellogg School of Management, Northwestern University) rode in like the new sheriff in town as the new Chairman and CEO—and new majority shareholder—of Tribune Company in Chicago.

One of his statements in particular got my attention. “I’m sick and tired of listening to everyone talk about and commiserate over the end of newspapers,” he was quoted as saying in a recent story from the Associated Press. “They ain't ended and they're not going to end. I think they have a great future," he said.

His confident statement is backed up by a philosophy I agree with wholeheartedly. Unlike in some recent media buyouts, the conversation wasn’t about exerting wide editorial control, slashing costs or pushing major asset sell-offs. It was about rebuilding the media conglomerate from the bottom up to facilitate faster decisions and innovative, pragmatic thinking about how to increase revenue and reverse the effects of industry-wide decline.

The AP story continued in its coverage of a news conference at Tribune Tower, quoting Zell as saying, “I believe this company has spent a significant amount of time in the last five years cutting costs, and maybe not enough time on increasing revenue," he said. "Our focus, and our bet, is that we can significantly increase the revenue of this company and dramatically increase its profitability going forward.”

In August 2007 I wrote an article that made the same point applied to the entire industry. I think it bears repeating here.

By putting effectiveness before efficiency, I wrote, newspapers grow top-line revenue. Let me give you a few examples.

Call abandon rates versus top-line revenue
For newspaper classified call centers everywhere, the call abandon rate is a key measure. However, managing the call abandon rate with head count alone is too efficiency-minded.

A better approach is to examine call center effectiveness by asking what the call center can do to grow top-line revenue. Find out how many outbound calls your people are making in their extra time. In my experience working with classified departments across the country, the problem is that reps often cherry-pick instead of calling all current prospects and advertisers. Nationwide, I see tremendous room for improvement in this regard.

Cost of winning new customers
At most newspapers, the number of subscribers who call in to quit each year represents at least 20 percent of circulation. That number climbs to 30 percent or more at some newspapers. At the same time, the industry saves only 17 percent of these subscribers from canceling. When it was cheaper to win a new customer than to keep an existing one, maybe these numbers were OK. Today we can and must do a better job retaining subscribers.

Significant improvement is well within reach for virtually any newspaper. After all, other subscription-based industries achieve 50-percent and even 60-percent saves rates regularly. And by focusing on effectiveness instead of efficiency, top-performing newspapers are earning 40-percent saves rates.

Say you have a circulation of 300,000 and receive 100,000 cancellation calls in your call center each year, and that you save the industry average of 17 percent of these calls. The efficiency-based measure would be talk time, and our work has shown that it takes an extra 30 seconds on the phone have a quality saves attempt.

Yes, spending 30 seconds more costs the paper around 50 cents. However, the extra effort will drive your saves rate up by 23 points. This means 23,000 fewer subscribers you will need to replace at $40 or more apiece, adding up to almost a million dollars per year. It’s a great example of how effectiveness beats efficiency hands down.

Online advertising expertise
Here is another example. Most newspapers have only a handful of online advertising experts. The sales force relies heavily on these experts to help them sell online ads. This is an efficient way to handle it, but is it the most effective? To answer that question, look at the amount of online revenue you receive today from existing advertisers. If it is not as much as it should be, maybe the efficiency model is not working well for you. To boost effectiveness, train all your sales reps to sell online ads effectively so you can maximize this revenue source.

When market conditions present challenges such as circulation decline and technological changes, the natural result is pressure to be more efficient. But in my experience in the newspaper industry, organizations that resist the pressure and focus instead on effectiveness see dramatic improvement in customer service, customer retention and sales. The return far exceeds the investment.

The key place to add top-line revenue
Lastly, many advertising sales people spend so much of their time servicing their accounts that they do not have enough time for prospecting new accounts. The solution we have found in consulting with our clients is to drive top-line revenue by building sales teams with two types of players. First, have top-notch production and service personnel who will serve advertisers in a world-class way. Second, have high-performance prospectors who can win new business from non-advertisers and additional business from existing customers.

In the current environment, business is not coming to the newspapers as strongly as in years past, but it is still there for those who go out and get it!

Bob Davis is President of Robert C. Davis and Associates (www.robertcdavis.net), a consulting firm in Alpharetta, Georgia, that specializes in improving sales, customer service and retention results in media customer contact centers. He is also Co-Founder and Managing Partner of Surpass (www.surpasscalls.com) in Bedford, New Hampshire, RCDA's specialized outsource call center serving newspapers and other media organizations. He can be reached at 678-455-6812 or bob@robertcdavis.net.