With radio and TV ad rates on the increase two years ago, Multimedia Tutorial Services, New York, converted its direct marketing business into a call center outsourcing service provider. Today, the operation has grown to include about a dozen clients, including several telecommunications companies.
Though sales of its own educational aids still represent about a third of the company's revenues, Multimedia credits its sales growth — $567,500 for the quarter ending Nov. 31 compared with $429,200 for the quarter ending Aug. 31 — to outbound and inbound telemarketing for clients.
Multimedia operates a 100-seat call center in Brooklyn. Company president Barry Reichman admitted that Brooklyn is an odd choice of location, given that cheaper labor, property and expenses are to be had in the Midwest.
But his CEO, Hershel Waldner, pointed out that there are benefits to locating in a culturally diverse area such as New York. Finding multilingual call center agents when a client needs them is never a problem. In one case, Multimedia was able to find Lithuanian-speaking agents for a client who needed them.
“It gives us a distinct advantage over some of the larger telemarketing houses out in the Midwest,” Waldner said. “We're in a very human-resources rich area.”
Clients include telecommunications providers IDT Corp. and Net2Phone, both of Newark, NJ; Viatel, New York, another telecommunications company; and Sylmark, Los Angeles, a direct response marketing firm.
Multimedia still has about 10 call center agents fielding inbound calls for its inhouse educational product, Math Made Easy. Since 1995, the company has spent $5 million on direct response radio ads on national radio.
The company's target market is couples age 25 to 40 with young children, typically between 5 and 15 years old, and incomes of $35,000 to $75,000 a year. Multimedia prefers to target markets with high numbers of home-schooled children.
Approximately 250,000 families have purchased Math Made Easy, representing more than $25 million in overall sales. The company also markets product updates to its existing customers via periodic direct mails.
In the future, Multimedia will seek partnerships with radio broadcasters that can provide access to its target audience, Reichman said. New TV advertisements probably would not be done unless the right prices and opportunities present themselves.
However, Reichman said the company's best prospects for growth lie in outsourced teleservices. Despite the recent economic downturn, he believes dot-com businesses will remain a viable source of new business for call center providers.
“[Many Internet businesses] have no outbound sales program to draw people to their sites,” Reichman said. “We want to take advantage of that vacuum.”