BTB Subscriptions: Achieving Significant Incremental RevenueEvery year businesses spend billions of dollars on "must have" information - trade journals, newsletters, directories, manuals and other intelligence. Physicians need the results of current clinical research to provide the best care for their patients. Attorneys must stay up to date on case law in their area of specialty. Direct marketers must be aware of the latest postal regulations, telemarketing legislation and privacy laws.
This type of business-to-business specialty information is marketed through the normal channels - direct mail, space, online advertising and increasingly through outbound telemarketing. The beauty of these types of products is that you can make a very strong case to the prospective buyers that it is an absolute necessity that they purchase it. This sense of urgency lends itself nicely to the telemarketing scripting process. For example:
"This guidebook will provide you with the up-to-date information necessary to prevent costly OSHA fines."
"By subscribing to this newsletter, you'll ensure that your organization is in complete compliance with the latest issues relative to constantly changing sexual harassment regulations."
With the proliferation of automated attendants and voicemail, reaching the decision maker remains the biggest challenge in business-to-business telemarketing. In a typical consumer telemarketing effort you can expect to make 15 to 20 contacts every hour. With a business-to-business effort, reaching just three to five decision makers every hour is more the norm. In consumer telemarketing, price points are usually fairly low so we rely heavily on the high contacts and the corresponding conversion rates. With contact rates so low on the business-to-business side, we must rely on "need-to-have" products with relatively high price points.
Many publishers are in the midst of budgeting, and marketing people are usually compelled to crank up the revenue side of their budgets every year. Revenue budgets are often product driven. Many marketing plans (and their corresponding budgets) are product/promotional based, particularly if there are a lot of new products with little historical data.
This type of budgeting has some interesting implications relative to production and inventory, which eventually may hamper the most productive and profitable telemarketing opportunities available to business publishers today. (In other words, what you have in the warehouse may dictate your marketing plans rather than a legitimate assessment of the needs of your marketplace.)
If you were to build a hierarchy of outbound telemarketing opportunities available to business and professional publishers today it would look something like this:
• The No. 1 telemarketing opportunity: Cross-selling and add-on selling to current customers utilizing a consultative, needs-based approach.
• The No. 2 telemarketing opportunity: Renewing/reactivating former customers utilizing a consultative, needs-based approach.
• The No. 3 telemarketing opportunity: Prospecting for new customers utilizing a consultative, needs-based approach.
You'll notice that all of the above suggest a consultative, needs-based approach. This makes a lot of product managers cringe because it forces them to move outside the product-driven budget box. "I need 250 copies of my litigation handbook sold to my house file in 500 hours." This type of approach used to be the norm in the professional publishing arena. One product would be presented, and if the customer refused the offer you would simply move on to another call.
As decision makers become increasingly more difficult to reach, it sometimes seems ludicrous to jam a round peg in a square hole. What if you called one of your customers and said, "I don't litigate anymore, I only do real estate transactions." Wouldn't it be nice to find what area of real estate he specializes in and offer a product more germane to his practice? Even publishers with limited product offerings can benefit by this type of approach.
In professional publishing, the traditional paradigm is the 30-day trial offer. This is the expectation of the buyers. The profitability of a campaign is based on net revenue, which is heavily influenced by the pay-up rates, i.e., the percentage of those taking advantage of the 30-day trial will actually purchase the product vs. canceling and returning the product.
The largest contributor affecting pay rates is the source of the list. Current and past customers offer marketers the best opportunities for financial success. (Obviously, timely and targeted products based on a bona fide needs analysis are also necessary parts of the package.) For example, a newsletter telesales prospecting effort to an outside compiled list might only yield a 10 percent pay-up rate, whereas a reactivation campaign to past buyers might deliver a 30 percent pay rate, and cross-selling to current customers might post a 50 percent rate.
Less hours, more revenue - this is what every product manager is seeking. While new customer acquisition can be a tempting proposition, always look to your past and current customers first. Build upon your success and work your way down the hierarchy of opportunities.