Inviolable List Principles

Richard V. Benson,

consultant and author of “Secrets of Successful Direct Mail”

1. Lists are the most important ingredient to the success of any promotional mailing.

C. Rose Harper,

first woman to serve as chairperson of the Direct Marketing Association, Direct Marketing Hall of Fame inductee, and former president of The Kleid Co.

2. Direct marketing companies don’t have a single mailing list — they have many. How many? Only segmentation will tell.

Your opportunities to segment a customer file into marketing units when purchasing behavioral characteristics are vast. Thus, while the marketing Information network (mIn; www.minokc.com) offers more than 42,000 published lists online, if you take into consideration the segments you’re looking at, it’s more like 400,000 separate and distinct lists.

3. In direct mail you can control your package, offer and product. But the rental list, vital to your success, is the one factor you really can’t control. You don’t own it. Nor did you produce it. You’re entirely dependent on outside parties for the accuracy of those data on which you base decisions. Datacards from brokers or managers are necessarily truncated — usually there’s more to a list than what’s shown on the data-card.

Learn all you can about a list you want to test. Ask for mailing pieces or samples of recent ads that generated the list’s names. Find out where the ads appeared, so you get the “flavor” of the list. 4. Match the mailing file to the response file to understand the geodynamics of response.

Population redistribution is ongoing. In an ever-shifting society, some formerly high-revenue areas may be down in response. One possible reason: a new shopping mall was built in the area and is luring consumers away from catalogs. A fascinating exercise would be to match a list of major malls against geo factors. Suppress certain ZIP codes from your prospect mailings where major malls have been built.

5. When selecting lists, look for the following:
- descriptions of those on the file (e.g., subscribers, members, buyers, donors, expires, former buyers);
- affinity (e.g., based on consumer profile, previous list history, or a subjective extension of interaction or experience);
- source used to acquire the names (e.g., direct mail, space ads, radio, television);
- recency of acquisition (e.g., hotline names);
- frequency (e.g., multibuyers); and
- average order size.

In studies, these last three elements (RFM for recency, frequency, monetary value) controlled 90 percent of the reasons why customers repeat at a certain sales volume. The weighing of these factors in the total value of 90 percent of all factors was broadly:
- frequency: 50 (of that 90 percent)
- recency: 35
- monetary: 15.

6. The RFM theory can’t be used in list selection for outside lists. This theory is applicable to a cataloger’s customer file only. In list selection, “recency” is when the customer came on. “Frequency” is defined on list rental fields as multiple buyers. And “monetary value” is the unit of sale.

Paul Goldberg,

direct marketing consultant and former circulation director of Consumer Reports

7. Beware of overmailed lists. If you own a list and can rent it, that’s free money. A 100,000-name list rented at $80/M is $8,000 in your pocket (less commissions). Rent it 24 times a year, and you pick up $192,000. But turn it 80 times a year and, in my opinion, you’re a thief.

Why? Because when someone orders a list for rental, theoretically he or she should have an exclusive window on that list for a week or two. During that time, no one else (including the list owner) should mail those names. Otherwise, the mailing could hit the same day as a competitor’s, and the chances of getting an order are reduced.

8. Beware of owners who frequently load tests with hotline names or multibuyers.

A list becomes very profitable when a mailer tests it successfully and comes back for a rollout. It’s also true that the most recent names — or hotline buyers — will respond best, as will multibuyers. If you ask for an nth name selection for a test, it’s assumed the nth name across the entire list will be delivered, right? Don’t count on it.

List owners frequently load tests with hotline or multibuyers. The result is a falsely high response on the test, which brings you running back for more names — only to suffer death and destruction on the rollout.

What can you do? Forecast lower results on your rollout than your test. Some direct marketers say never step up more than five times (e.g., if you test 5,000 names, don’t go back for more than 25,000). I disagree. Know your lists, know your broker, know your list owner and be guided by your experience.

Don Nicholas,

president of Digital Media Advisors, which helps publishers develop Internet marketing strategies

9. Always order an odd number of test names. Most list rentals require a 5,000 or 10,000 minimum. A lot of people will want more than 5,000 names as their test quantity. Order 5,200 or 5,500, and change the number each time you do it.

Here’s why: There are some list managers and owners who don’t run a 5,000-test panel for every order of that type that comes in. They take their subscriber file of 200,000 and, once a quarter, they’ll knock out 5,000 names to be used to fulfill tests. So everyone who orders tests in that three-month period gets sent the same 5,000-name list!

You don’t want to be part of that because it’s being mailed much more than everything else is. You want your own list.

An even worse potential problem with orders of 5,000 can occur when you order something other than standard active subscribers. Let’s say you want only people who have renewed or people with a particular job title. If you order a round, even number, they may still give you some names in the plain old select. If they don’t do that, they might confuse your order and give you someone else’s 5,000-name selection. But if you order an odd number of names, it’s much more likely you’ll get what you asked for.

Brian Kurtz,

vice president of marketing at Boardroom Inc. and Circulation Hall of Fame inductee

10. All datacards are guilty until proven otherwise.