Wagons, ho! A second service bureau heads out

DEI's Membershop follows in the tracks of Florida's Infinite OutSource

Originally published in Current, Sept. 28, 1998

By Steve Behrens

Barbara Appleby likes the image: in establishing the Development Exchange's new Membershop service bureau for public radio stations, she's setting out on the same long and perilous journey that Johanna Antes began a year-and-a-half ago.

"It's like we're crossing the United States and Johanna is a year or two ahead of us," says Appleby.

Antes may not have reached the promised land of "best practice" yet, though her nonprofit Infinite OutSource service bureau in Tampa is now handling back-office mail operations and other membership activities of eight Florida licensees. But she's learned quite a bit during her long trek.

"I thought I knew exactly how big the job was," says Antes, looking back. "It was probably three times the job I estimated. Things take longer than I would like them to, but it's faster than most others expect."

One other thing Antes discovered quickly and--Appleby endorses--is that the CPB-backed service bureaus generally will help participating stations on the revenue side, but not on the costs.

Most public radio stations spend "substantially" less than the annual $16 per member that Membershop will charge, says Appleby. Some spend only a few bucks per head. IOS also charges a similarly larger annual rate: $18.50 per member. (Antes breaks it down: $6 to cover service-bureau functions, plus $12.50 for fundraising campaigns.)

"For the bulk of stations," says Antes, "it's an increased cost, primarily on the campaign side, because they aren't doing as much as they could be doing," says Antes.

The objective is the additional revenue that proven fundraising practices usually generate, says Antes. And much of that work will remain in the hands of the station development staffs even if they go with a service bureau. (The development staffs in Florida haven't been decimated; Antes says she knows of no layoffs at the stations that hooked up with IOS.)

Original projections for IOS, yet to be proven out, predict that 40 percent of revenue gains will come from improvements that IOS can make, while 60 percent will come from reallocating station staffers' time to major-gift and underwriting solicitations and other promising labors that previously were shortchanged.

"What we're asking [prospect stations] to do is to look at whether Membershop can help deliver more net revenue than they are able to now," says Membershop chief Appleby. Additional fundraising efforts have costs attached, but they also have even bigger upsides.

By giving smaller stations more staff specialists, they'll be able to perform like the "database-driven machines" at the bigger stations, says Appleby.

Both IOS and Membershop will do the higher level work of planning campaigns and analyzing results as well as the "back-office" chores of implementing campaigns--sending and receiving mail, processing payments, managing databases and acknowledging gifts. Both will use PBS Team Approach software, which Antes and Appleby regard as the most capable software specialized for stations.

Down Tampa way

IOS is the eldest offspring of a broader, CPB-backed study of possible shared functions among Florida stations. With a go-ahead from the Florida Public Broadcasting Service in February 1997, Antes was hired away from WEDU in Tampa and by July had begun operations with a staff of three. By December, the staff had converted the first station's database to TeamApproach. By this June, the staff had grown to eight. In November, they'll convert the eighth station database.

A couple more Florida stations are interested in joining, says Antes, but all of the stations most likely to join up in January are located north of the Florida border. She wants to bring on five at that point.

Though station execs are committed to outsourcing their membership labors, they find it hard to let go of the details, Antes finds. "We see that as part of the life cycle of adjusting. They're uncomfortable at first, but then they quickly learn there are other things to do with their time."

Working with IOS, the stations still customize their mailings, though renewal letters have tended to cluster in two distinct styles: for college-owned stations, which stress the lifelong-learning benefits of public TV, and for the more aggressive community-licensed stations.

Some tasks belong at the stations, says Antes--customer service and major-gift solicitation, for instance. (Stations will be able to update their databases from a distance.) But she admits to the heretical belief that many stations would do better if they outsourced their phone banks during pledge drives.

Not surprisingly, Infinite OutSource does some outsourcing of its own. Instead of buying high-volume mailing equipment to handle a growing volume of renewal letters (now 50,000 a month), IOS hooked up with a specialized mailhouse in Jacksonville, PrintCraft. It also hired JDL Technologies to put together the computer systems, KCET Dimac to handle telemarketing, McPherson & Associates to acquire mailing lists, and "lockbox" vendor First Union-QuestPoint to process and deposit payments.

"A year ago, this was conceptual," says Antes. "It was in a couple people's heads that this was a good idea. And every step of the way has been a confirmation of that."

Initial results are encouraging. In eight member-acquisition campaigns so far, only one has scored lower than the common target of 1 percent, says Antes. WEDU doubled its past performance, hitting 1.4 percent. Six additional-gift mail campaigns drew above-average response rates of 8 to 12 percent. And six lapsed-member campaigns scored 2 to 5 percent.

Ending the Sisyphus Syndrome

With an eye on the Florida project, public radio's Development Exchange (DEI) hired consultants Mark Fuerst and Elsie Hidalgo and got a CPB Future Fund grant to scope out a similar service-bureau for public radio stations.

In meetings about the project, Appleby saw station managers making gestures as if to say, "Here, take my database!"

Planners originally discussed Membershop as one of several regional cooperatives owned by stations, but stations said they didn't want to manage it, according to Appleby. The project morphed into a national service run by DEI. Appleby, who previously ran a large multi-station membership operation at Minnesota Public Radio, already had joined DEI as vice president, and was put in charge of DEI's big move from professional association to service provider.

"The way [DEI President Douglas Eichten] and I see it, it's a natural progression for the Development Exchange, from recommending what people do, to doing it for people."

Like IOS, Membershop would offer a single package including all membership fundraising except for pledge drives, but Appleby says it may later offer specific services a la carte.

Appleby expects that an important benefit will be to prevent what she calls "the Sisyphus Syndrome." When a station relies on a lone development director to push its boulder uphill, and that person leaves, the rock rolls back and fundraising collapses for a while. Membershop, in contrast, will have "bench strength," she predicts--multiple experts to keep things rolling.

Membershop's next step will be to win a third CPB grant to underwrite its start-up. The project already has received grants of $100,000 and $333,600. Licensees in Louisville, Chapel Hill and Nashville are among the likely charter customers for Membershop.

Appleby aims to start up faster than IOS, sometime next spring, with an initial staff of about seven and a charter clientele of 15 stations.

She explains, "We have the advantage of being the second one to cross the frontier."



To Current's home page

Earlier news: Membership service bureau is only one of the consolidation projects underway in Florida, 1997.

Earlier commentary: A planner of the MemberShop project, Mark Fuerst, tells why small scale is hurting many public radio stations.

Earlier news: Membershop grows out of CPB Future Fund grants.

Current Briefing on efforts to make public broadcasting more efficient.


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