Support Services Guide: Playing the Supporting Role1 Aug, 2012 By: Bridget McCrea Response
The back end of a DRTV campaign continues to play a critical role in a product’s cumulative success — both on and off TV.
There was a time when the back end of a DRTV campaign was a pretty straightforward animal. To support their short- and/or long-form direct response shows, marketers relied on a fulfillment provider, a payment processor and a telemarketing service, all of which rallied around the success of a product (or line of products), which in turn was given a specific price point and shipped out when payment was made in full.
Fast forward to 2012 — the back-end services designed around DRTV products are as complex as the offers themselves. “There are so many different offers on the market right now, compared to just a couple of years ago,” says Hal Altman, president and CEO at Motivational Fulfillment & Logistics Services in Chino, Calif. “We’re seeing shipping-and-handling only, bill you in 30 days, and myriad other offers. One product may be packaged, handled and billed 10 different ways.”
The hybrid-offer trend has added complexities for back-end providers, many of which have undergone their own changes during the past few years. Some are taking a more vertically integrated approach by providing services that may not have been under their domains just a few years ago. These moves were made in answer to clients’ needs for an “under-one-roof” option and also in response to economic pressures that are pushing companies to do more for their clients.
In this annual look at what’s new in support services, we’ll examine the three main facets individually, show you what’s going on in those areas, and turn to some of the industry pros for hands-on advice for marketers looking to leverage the back ends of their campaigns to the fullest extent.
Fulfilling Their Needs
In today’s information age, it’s no surprise that marketers are asking their fulfillment houses for more — and more detailed — reports and feedback. That’s pushed more of the latter to integrate real-time (or, in some cases, near real-time) reporting capabilities into their operations. “There’s a continued need and desire for information from media buyers, clients and other parties,” says Altman, whose firm offers a 24/7 online program that clients use to check their numbers. “Where we used to supply five or six reports a week, we’re now doing 25.”
In highest demand are reports that highlight information about marketing, finances, media, projections, installment and receivables (in particular, cancellations, returns and refusals). In many cases, having that information at their fingertips helps marketers combat the negative effects of the economic downturn and the drop in DRTV response that came with it.
“In order to stay in business, marketers have to get a bigger bang for their buck,” Altman explains. “The way to do that is by getting quicker, more accurate and extensive information about customers and costs.”
As Altman mentioned earlier, fulfillment companies are also being asked to manage a wide range of new offer formats. “We have one product right now that customers can buy 10 different ways — from half-a-payment now, to payment in a month, and everything in between,” says Altman.
Where customer service departments once focused on “when to ship the product,” many spend their time explaining to confused customers exactly how much they paid for what and when. “The customer who pays only shipping-and-handling for a product can get confused when $15.95 shows up on a credit card statement a month later,” Altman says.
To deal with that confusion, companies like Motivational Fulfillment run continuity and traditional programs as two separate entities, knowing that the former will likely generate the highest number of customer inquiries. That strategy also helps the fulfillment house more effectively manage the ongoing payments, receivables and reporting associated with continuity programs.
Outside forces are also impacting the way fulfillment firms operate internally and deal with DRTV marketers. Of particular interest right now, according to Altman, is the growing attention being paid to the Payment Card Industry Data Security Standard (PCI DSS) requirements. Designed to ensure that all companies that process, store or transmit credit card information maintain a secure environment, PCI was developed in 2006 to manage the ongoing evolution of these security standards with focus on improving payment account security throughout the transaction process.
PCI applies to all organizations or merchants — regardless of size or number of transactions — that accept, transmit or store any cardholder data. “PCI is the Golden Rule,” says Altman. “A lot of fulfillment houses scoff at it and say it’s not part of what they do, while others ship as if they were PCI compliant.” Altman points to the recent multimillion dollar T.J. Maxx PCI compliance settlement as a sign of things to come. “It’s only going to get worse,” says Altman, “particularly for those processors who won’t spend the money to be compliant.”
Patrick Moulton, director of new business development at Moulton Logistics in Van Nuys, Calif., says that the most important trend developing is the shift toward an expectation of free shipping by consumers on the DRTV products that they order. “We are seeing more and more marketers using this offer to increase their sales,” says Moulton, who points out that much like there is no such thing as a “free lunch,” there is also no such thing as free shipping.
“The key is being able to make that offer is to make sure that you have implemented the lowest possible cost to get the product from the manufacturer/distributor to the consumer,” says Moulton, “within an amount of time that doesn’t have a negative — that is, increased — impact on customer service activity.”
At Moulton Logistics, that goal was parlayed into the development of the company’s new SmartShipping™ product. The system analyzes hundreds of variables on every individual package to identify the smartest delivery option for that specific package to meet the required time in transit. Moulton says the firm’s clients are seeing an additional savings of 10 percent (and in some cases, 40 percent) on their already-discounted shipping charges. They’re also able to ascertain their true S&H costs before the campaign launches, says Moulton, “as opposed to finding out more than a month after the campaign has already been live.”
Social media has also impacted the DRTV campaign’s backend, according to Andy Arvidson, owner of Imagine Fulfillment Services (IFS) in Torrance, Calif. He says marketers are closely monitoring their social media feeds for constant feedback on customer service in areas like timely deliveries, order accuracy, shipment presentation, overall customer service and product satisfaction. Arvidson sees social media outlets like Twitter and Facebook as easy ways to achieve customer support and service goals. “Many DR marketers have subscription-based models,” Arvidson says, “which means it’s critical to keep customers happy and ensure repeat purchases are made.”
Expect to see more technology making its way into the fulfillment arena throughout the rest of 2012 and into 2013. But remember that all the technology in the world can’t replace what fulfillment houses have historically done best: get the products to the customer in a timely manner and then track the related sales and continuity data for sharing with the marketer. “Listen to your fulfillment provider,” Altman advises. “You may be surprised at the wide range of advice and accurate information that it can provide — and that will save you money, time and hassle.”
On the Hook
Busy consumers don’t do a lot of talking on the phone these days — at least not with product and service vendors. During the past few years, in fact, a growing number of people have been using E-mail, chat sessions and mobile devices to buy products, submit payments and ask questions. This trend has pushed traditional call centers to invest in new technologies and develop business models that factor customer-preferred communication into the mix.
At O’Currance Inc., a Fusion BPO Company in Draper, Utah, Adam Miller says the company’s newest and hottest addition is the ability to conduct online chat with customers who would rather avoid person-to-person phone calls. This has helped drive Web sales for clients, says Miller — the company’s director of sales — and it also opens up the online sales channel in ways that the telephone can’t touch. It also helps on the lead-nurturing side of the equation, particularly if the customer has questions and isn’t ready to hit “buy” yet. Online chat also reduces long-distance telephone charges — a savings that companies like O’Currance pass along to their customers.
Also new in telemarketing this year is the ability of affiliate marketing (defined as performance-based marketing where a firm rewards one or more affiliates for each visitor or customer generated by the affiliate’s individual marketing efforts) to drive accountable inbound phone traffic. “Marketers are using affiliate marketing to drive inbound phone calls that we’re able to track back to the individual affiliate marketer,” Miller explains, adding that in the past, multiple marketing partners were impossible to track. “During the past 12 months, we’ve seen several campaigns that used this strategy to generate insane volumes of traffic.”
On the flipside, Miller is seeing more marketers grappling with payment release issues — particularly when the offers include multiple payments over time. “They have a hard time getting all three or five payments, and total payments made usually drops out somewhere in the 1.5 (payments) range,” says Miller. To combat that problem, he says O’Currance tracks orders by agent to figure out which one is getting two payments versus three, four, or five. Script changes and other tweaks are made to ensure that the highest number of payments is released for each order.
“We hold ourselves accountable and track it on the back end,” says Miller, whose firm has used its triage approach successfully with clients like Rosetta Stone. “If it’s an agent issue, we’ll listen in, address the problem, and then implement a solution for the team.”
And speaking of script changes, Miller believes marketers should loosen up a bit and allow their telemarketing providers the leeway to modify and/or write their own scripts, when warranted. This doesn’t always happen. “As a call center, we know what works,” says Miller. “One of the mistakes we see all the time is that marketers don’t utilize us as a partner. What many of them don’t realize is that we can work with them on tests, scripts, offers and other critical campaign elements.”
Justin Kilgore, director of client services at Evolve Teleservices Inc., in East Lansing, Mich., says that to get the most out of their campaigns, marketers need to set realistic expectations that go beyond just saying, “Everyone is going to want this product.”
“A lot of companies assume that their call volume is going to be high and that they’ll need additional centers to support that, but they wind up complicating things before they even determine the demand levels for their product,” says Kilgore, who advises marketers to keep things simple on the telemarketing front. “If you don’t know what your call volume is going to be like, then don’t muddy the waters.”
Fraud, chargebacks and high return rates are just a few of the perils that DR marketers are facing right now, according to Curtis Kleinman, vice president of business development at Swipe Payment Solutions in Los Angeles. Affiliate marketing traffic is also impacting how and when payments are processed for campaigns, says Kleinman, who points out that such deals look like “can’t lose proposals” on the surface, but — in reality — are anything but.
“So you have a consumer who bought a similar product, or is ready to buy yours right now, and you pay a bounty for every closed sale an affiliate marketer can bring you,” says Kleinman. “The downside is that the consumer may have been offered a free iPad for accepting a trial offer of your product or outright purchase. Leads like this are much more likely to be returned or completely charged back by the consumer.”
Figuring out how to securely accept mobile payments is another industry challenge right now, says Kleinman. “What is convenient for the consumer is a logistical security challenge to mobile providers,” he explains. “Because mobile devices are constantly on the go, determining the location of the purchaser compared to a home address, isn’t as sure a safeguard as using a desktop computer.” To offset that challenge, Kleinman expects to see more use of fingerprint and face recognition technology as a way to ensure mobile processor security.
Right now, DR marketers have varied payment processing choices, depending on their product, price and promotional methods. “Whether their billing model is a one-time sale, split payment, or has repeated continuity payments, there are many processors and banking institutions friendly to the DR world,” says Kleinman, who cautions marketers not to make the mistake of using their local banks to facilitate payment processing. “Local banks are not familiar with spikes or peaks when you have a successful television spot air.”
Chris Reinmuth, vice president of direct response, at Litle & Co., in Lowell, Mass., concurs, and says marketers should seek out providers that aren’t bank-owned and preferably a company that has a sharp eye on PCI compliance, security and new technological innovations. “You want a payment partner than can capture existing customers on a multi-bill or continuity system,” says Reinmuth, who also cautions companies to avoid deceptive campaign practices, which nearly always result in high chargebacks. “There’s a fine line between being competitive and being deceptive. Don’t cross it.”