Resident Firm Is Service Center for 115 Magazines : Small City’s Post Office Jumps
More than 2% of the nation’s mail passes through this quiet city of 76,000 people, situated about 50 miles northwest of Denver. And most of it is addressed to just one party: Neodata Services.
Anywhere from 100,000 to 1 million pieces of mail a day for Neodata comes to the Boulder post office. In turn, the company sends out 202 million mailings a year and spends $36 million on postage annually.
Although Neodata is hardly a household name, chances are most people have written to it or heard from it at one time or another. The company is one the largest “fulfillment houses,” handling the circulation needs of magazines. It keeps track of subscribers, sends out bills and renewal notices, receives payments and change of address information, processes complaints, prints subscription mailing labels and collects data vital to magazine marketing decisions.
Neodata currently represents 115 magazines with 44 million subscribers. By charging the magazines an average of $1 a year (45 cents to $2 depending upon frequency, type of services, etc.) per subscription, the company grosses $44 million a year.
That’s why even though magazines such as Playboy, Popular Science, U.S. News & World Report, Esquire, the New Yorker and Vogue are published in New York, Chicago, Los Angeles or elsewhere, renewals, complaints and address changes are sent to Boulder.
Started With Esquire
Why Boulder? “In 1963, A. C. Nielsen Co. (best known for measuring TV ratings) bought Esquire magazine’s fulfillment house in Boulder,” says Neodata president Kurt Burghardt, 50. “Eventually the Esquire operations added 14 other magazines for a total of 6 million subscribers.”
And in the intervening years, those totals have expanded significantly, he adds.
Neodata now employs 900 in Boulder and another 500 in Limerick, Ireland. Since 1969, the company has been shipping a third of its subscription orders, renewals, change of address and complaints by air to its Limerick plant, where workers punch the information into computers and send it electronically back to Boulder.
Neodata’s principal competitor in the field is Communication Data Services, a subsidiary of Hearst Corp., which handles Hearst magazines such as Good Housekeeping and Cosmopolitan as well as independent publications. CDS, headquartered in Des Moines, Iowa, is about the same size as Neodata.
Some Do Own Work
In addition, several big magazines--Time, Reader’s Digest, National Geographic, TV Guide and Newsweek among them--do their own subscription work. And a number of smaller fulfillment houses are around the nation.
Neodata prints new subscription labels each week for weekly magazines, complete with changed addresses, renewals and new subscribers. “It is cheaper to send out a new subscription list . . . than to correct existing lists,” explains Bill Anderson, manager of mailing services.
Neodata processes about 2 million complaints a year from subscribers, mainly people calling in or writing about missing copies. Employees man 60 phone stations, answering each call by saying “customer service department.” That practice leads many callers to believe that they are talking directly to the magazine.
“People don’t understand lead time, that many monthly magazines are printed two months in advance. That’s a source of many complaints with new subscriptions,” Burghardt says. “It takes time to get the subscriptions into the system. The customers often believe they have missed a copy.”
Cancellations sometimes come to Neodata after subscribers get upset about a particular article, photograph or editorial. And settling arguments can also be part of the business.
“We get people going through a divorce who fight over a magazine subscription,” explains Nancy Talmey, in customer services. “We send the magazine to whoever writes first in divorce cases.”
Five months before a subscription expires, Neodata sends a renewal notice. “A subscriber could get eight renewal notices. Once they say yes, the notices stop,” said Burghardt, noting that total magazine circulation has been growing by 8% a year.
