Connect with FOLIO:
         

ADVERTISEMENT



Catching up with Circulation Fulfillment



By Jill Ambroz
08/31/2007

Circulation fulfillment has changed fairly drastically over the last few years, thanks to the Internet and the advent of new technologies. But it’s still all about customer relationship management.

Everyone is looking for better, faster, more granular reporting and more ways to cross-sell a single customer. And technology is providing the support for that and more. Publishers have a lot more tools at their disposal for learning about their readers and their spending habits. “Less time is spent now on acquiring the circulation numbers for reporting, so more time can be spent on analysis—and what’s next—which is more difficult,” says Anne Kinard, principal with New York-based Quantum Media.

To better mine that data, there’s a move toward integrating the various databases within a media company, from fulfillment databases, to e-newsletter or registration databases.

“It’s the single customer view,” says Donna Sickles, corporate circulation director for Quadrant Media in Parsippany, New Jersey. “ You get to cross-market to that one individual and you can be communicating with them about trade shows, and whatever types of services and products you offer. You have them in a single place and can market to them more effectively.” But it can be a huge undertaking to merge the databases. Many publishers are still trying to decide if the ROI will be worth it, she says.

Another advantage to an integrated database is that it cuts down on the chance of readers getting double- and triple-promoted. “You can’t accurately promote them or do reporting because they are in several databases,” says Dan Heffernan, vice president of sales and marketing with Advantage Computing Systems. “Having one integrated database solves that problem.” The Ann Arbor, Michigan-based provider of in-house fulfillment software does a lot of “deduplication” as it converts databases to the Advantage system, Heffernan says. “We believe in one, big fat relational database. It’s better for data mining.”

This is also an area where list management companies get involved, and it can be a sticky situation, especially for a publisher such as Quadrant, which publishes several medical journals and must adhere to very strict policies with the AMA. “If you decide to build a merged database, be very careful that you don’t include proprietary lists without the consent of the list owner,” Sickles advises.

E-Commerce Development
Both publishers and customers are migrating to the Web more for circulation fulfillment. “More people are expecting their customers to buy, renew, change address, all those transactions through the Web,” Heffernan says. Advantage was one of the first companies to write a Web interface some 10 years ago, he adds. “More and more publishers are doing e-commerce. We’re seeing a huge shift towards our clients and new publishers expecting customers to do everything on the Web. And they’re expecting Web-enabled executive dashboard-type functionality. They are expecting software to do more and more.”

Readers are also looking for ease-of-use and one-stop shopping. “There’s a need to provide the customer with a single, simple portal to manage all their electronic and print preferences,” Kinard says.

There’s also a growing need for publishers to go beyond the credit card transactions on the Web to be able to do direct debit transactions, as well as pay-per-view for other electronic products, says Carole Ireland, president of New York City-based Quality Circulation Services.

“The database has so much in it about customers, their behavior, what’s been promoted to them, what they’ve responded to,” says Heffernan. “Publishers want to mine this data and look for patterns and think up new products, that’s what they’re after.”

In-House Vs. Out-Source
Even if the end result in circulation fulfillment remains CRM, there are still two distinct approaches or schools of thought to providing it: in-house or through an outside service bureau. Many publishers have probably tried both ways over the years and have learned the advantages and disadvantages of each.

Corry Publishing used to do its circulation fulfillment through Pub/Data Inc. out of Chicago in the mid-nineties, before the company changed strategies and exited the circulation fulfillment business. So, Corry, which publishes three titles with a total circulation of about 120,000, Integrated Solutions, Business Solutions and Integrated Solutions for Retailers, decided to move its fulfillment in-house. “It was probably for us a blessing in disguise,” says Melinda Fadden, Corry’s director of audience development, of Pub/Data’s exit. “It saved us a ton of money over the years.”

Doing fulfillment in-house does require more staff, but Fadden insists Corry still saves money. “I guarantee you I pay way less for circulation,” she adds. “We bought the system, a one-time lease which was several thousand dollars and that’s it. Fulfillment costs last year were nothing but labor and time. The year before that they were $2,200, but that’s because we upgraded our system that year. When we used to do out-of-house fulfillment 10 years ago, we would sign bills for $3,000 a month. I know I’m not paying anywhere near that anymore.”

Publishers can also develop tactics for saving money when working with an outside vendor. Skipping update reports for select months saved Corry thousands of dollars in the past when it used a fulfillment bureau, according to Fadden. Another cost-saver is not serving back issues. Corry doesn’t have to have a warehouse to store all of the issues.

As the industry moves more toward scanning in orders and uploading, that means less data entry, and less staff. Corry found another way to cut back on headcount, by limiting its coverwraps to the summertime, when it can employ a summer intern to do the documents and process the cards during the busier months.

There are some drawbacks to doing everything in-house, though, like the lack of backup and support, both in manpower and technology. Fadden is the lone expert when it comes to Corry’s databases, postal regulations and the ins-and-outs of the BPA rules. And a recent computer upgrade “wreaked havoc” on the whole system. But, Fadden says her intimate knowledge of her database outweighs any challenges she may come up against. “I know my readers and what’s in my database better than anyone else,” she says. “When I’m in that database, day after day, I can spot trends and problems way sooner than someone who has circulation in a fulfillment house—they may not be looking at it every day.”

Cutting Costs With Out-Sourcing
However, for publishers in major metropolitan areas, maintaining an in-house staff is cost-prohibitive, says Quality Circulation Services’ Ireland. “There’s a reason most service bureaus are in places like Des Moines, Palm Coast, Florida, and Mt. Morris, Illinois,” she says. “And many publishers simply acknowledge that fulfillment is not one of their core competencies.”

Quadrant Media doesn’t fit that description. Donna Sickles began her career at a fulfillment company, then spent 10 years at another publisher doing all fulfillment in-house. At Quadrant, the fulfillment is done out of house, through Epsilon Management Systems.

“If you’re going outside, you obviously have to pay for everything that they do for you, but it eliminates the whole manpower, space, software and equipment needs, which can be a trade out,” Sickles says. At her last job, two publications were served in-house by a staff of 13. At Quadrant, she manages 12 titles with a staff of two.

Sickles also likes being able to tap into a service bureau’s broad expertise honed from serving a wide variety of clients with different needs. A fulfillment house “provides more staffing flexibility,” adds Quantum Media’s Kinard. “They have more people available to assign to your publication’s needs in peak periods. They also have more direct, general fulfillment experience and more area-specific experience, such as Web, agents, ABC/BPA and postal, than an in-house staff.” And given the postal pain most publishers are feeling now, a fulfillment shop can also offer greater sortation and commingling discounts.

Service bureaus take advantage of economies of scale across their client base to contain unit costs and investment costs are shared or provided at no additional charge rather than borne by a single publisher. Customer service support is available with dedicated or shared teams, says Bill Dugan, with Publishing Fulfillment Consulting LLC of Brewster, New York. “Bottom line: The bureaus do this for a living and are up to date on procedures and technology. Keeping this work in-house costs more money with reduced capabilities,” he says.

A Dwindling Supply Base
The larger consumer magazine publishers who use service bureaus may be up against a new challenge, though: a diminishing supply base. Industry consolidation has whittled the fulfillment providers down to just a few: Communications Data Services Inc. (CDS), Kable Fulfillment Services Inc. (KFS) and Time Customer Service Inc. (TCS), Dugan says. Less competition for shops with high-level capabilities could affect service and pricing.

KFS, a subsidiary of Kable Media Services Inc., has been very active with acquisitions, buying the EDS subscription fulfillment operation in 2003 and more recently, Palm Coast Data. Kable is busy developing and implementing its optimization plans for its multiple facilities and systems. Its current systems include NPS, K-Data, PCD and a licensing arrangement with Advantage.

Meanwhile, CDS has a new CEO in publishing veteran Malcolm Netburn, who has ambitious plans to drive more technology investments, especially in the digital and Internet areas. And TCS, which serves Time Inc.’s magazine portfolio, has an opportunity to seize a stronger position in the market by stepping out of its comfort zone of serving limited outside clients at a higher than market price by casting a wide net, according to Dugan.

By Jill Ambroz
08/31/2007







RECENTLY in Audience Development dots icon
MOST READ on FOLIO: dots icon


CONNECT WITH FOLIO: NOW
         



Find What You Need dots icon

Folio: Marletplace

Seach top vendors, suppliers, service providers & more

Browse & Search the Full Directory Now


CAREER CENTER dots icon