Harte-Hanks Reports Strong Growth in Its Web Usage

Along with a fiscally strong year, Harte-Hanks Communications Inc., San Antonio, TX, is reporting that Internet-based response management is the fastest-growing arm of the company's business.

However, the growth doesn't necessarily indicate a change in Harte-Hanks' business approach so much as it indicates that its clients are increasingly embracing the Web as a response device and a more efficient way to manage customer and prospect information.

Late last month, Harte-Hanks reported that the number of Internet-based responses to customer promotions it handled in 1997 grew 175 percent, to more than 3.9 million. Harte-Hanks managed a total of close to 15.7 million responses for its clients in 1997.

Though the Web still is a small percentage of the company's business, “one of the reasons we call it response management rather than telemarketing is because of Web-related activities,” said Jacques Kerrest, CFO at Harte-Hanks. “Just 40 percent of our revenue comes from the telephones because of things like the Web.”

For instance, 3Com, Santa Clara, CA, is using Web-based response management to track marketing efforts for the 350 seminars it runs across the country each year so 3Com marketers can increase promotions where response is light and pull back efforts as seminars fill up.

“When you're trying to get more bang for your marketing dollar, it helps to have up-to-the-minute information,” said Julie Freese, marketing programs manager at 3Com. “We know how many people will be attending seminars right up to the day before.”

In another example, Dell Computer Corp., Austin, TX, tapped Harte-Hanks to help its sales reps qualify leads. Under the system, Harte-Hanks' telemarketers contact and qualify leads from Dell's database.

On a daily basis, Harte-Hanks' reps post lead information to a central Web site and then alert appropriate reps at Dell by e-mail.

“[Previously,] we had two people using manual and e-mail lead-distribution methods,” said Allison Gregorczyk, federal marketing communications program manager at Dell. “Since our department is one of the smallest, quite frankly, it wasn't panning out to be worth two people's time.”

The Web-based system has cut her department's time spent on lead-management by 75 percent, Gregorczyk said, adding that since the Web site serves as a central source of up-to-date lead information.

“I can pull reports any way I choose and spend the other half of my time doing other things,” she said.

Gary Skidmore, president of Harte-Hanks Response Management, said that having tracked telephone, fax, trade show, mail and electronic response mechanisms for clients in the healthcare, financial and hi-tech industries for the last six quarters he clearly notices a shift toward Web-based response management.

Skidmore estimated that Harte-Hanks is managing Web-based responses for about 75 percent of its 180 clients.

“We're doing the same things on the Web for our customers that we've been doing using things like the phone for 15 years,” he said. “The Web may be the most measurable of [all of them].”

Skidmore said that as Internet telephony technology — where Web sites can publish toll-free numbers that patch respondents to live operators — emerges, Harte-Hanks is increasingly viewing the telephone and the Internet as a single response device.

Harte-Hanks offers a variety of other marketing and sales support services like lead management, order processing and fulfillment, event management, and telesales for a client base that includes Merrill Lynch, IBM, 3Com Corp., Netscape and Dell.

In October, Harte-Hanks completed the sale of its newspaper and television operations to the E.W. Scripps Co. to focus on direct marketing and shoppers (750 zoned publications reaching 9 million households) as its core business — apparently getting the desired results.

Late last month, Harte-Hanks reported that its net income grew 37.9 percent, from $31.7 million in 1996 to $43.8 million in 1997. The company also announced a 2-for-1 stock split and a 50 percent increase in the quarterly dividend from 2 cents per share to 3 cents per share.

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