Nine Tips for Getting the Most Out of Your Housefile

It’s a problem that every marketing manager faces: How to make your housefile more effective.

For catalogers, your housefile is the air you breathe. If its quality is not properly maintained, your profits could decline as a result.

Some leading authorities offer tips to freshen up your list and keep it working at an optimal level.

1. Know How Often to Mail to Your List

This may not seem to have much to do with the quality of your list, but it all starts here. If you’re not mailing often enough, even the best list in the world won’t bring maximum profit. Conversely, if you mail too often, you’ll weaken both your list and your bottom line.

So, precisely how often should you mail? According to Steve Trollinger, vice president of client marketing at J. Schmid, a catalog consultancy: “Mail as many times as you possibly can while you’re at or above the threshold of your profitability goal for a given segment. Thus if 89 cents per book mailed will account for costs, overhead and profit, and you mail at $1.85 per mailing, you can easily mail another book.”

He notes that you can expect to see diminishing returns of 30 percent to 50 percent for each subsequent mailing.

Of course, it’s hard to know exactly how your customers will respond unless you test. Bob Klapprodt, vice president at Lett Direct, a catalog consulting firm, advises mailers to set up test panels and “test your way into it. It all depends on how consumable your products are and what type of selection you have.”

If you discover that you should be mailing more often, one way to make additional mailings more profitable is to make them look new. According to David Hochberg, a spokesperson for the Lillian Vernon company, catalogers frequently change the book’s cover signature to give it a fresh look. He says some even go so far as to repaginate the entire catalog, moving around all of the same items within the book.

2. Test the Right Amount

According to Hochberg, a good rule-of-thumb is not to involve more than 35 percent of your circulation in tests. While this may be a good number for a catalog of Lillian Vernon’s size, it could be financially impractical for smaller catalog companies, says Trollinger.

Klapprodt says that while, in theory, you never can test too much, understand the economic impact of what you’re doing. He says a catalog’s size tends to correlate with how much testing it can do successfully. So small mailers tend to test the big stuff, and big mailers test for a slight tweak that could move their profit margins a sliver of a percentage point.

Trollinger offers a quick way for a smaller catalog to see if a test result is valid. His “rule of hundreds” states the following: You want at least 100 observations before you can say you feel comfortable with the result.

3. Re-mail First-time Buyers Right Away

These folks are in an active buying mode, says Hochberg. “The more time that expires after the first purchase, the less likely they will be to buy again.”

4. Make Updates and Merge/Purges Count

An intriguing strategy that Lillian Vernon employs, according to Hochberg, is never to drop former buyers from its list, even if it is no longer mailing to them.

“If they exist on your file, then you might not have to pay for them if they’re included in one of the files that you rent from another mailer. You should flag these matches [when they come up in a merge/purge] and make sure you mail them when this happens. In general, it costs more to acquire a customer the first time than it does to re-activate them.”

If you are merge/purging multiple lists against your housefile, Trollinger suggests flagging the multi-buyers. These are people who are on more than one of the lists you plan to mail. Consider mailing to them because their response rates are typically 50-percent to 100-percent higher.

If you don’t have a net-name arrangement with the list’s manager (that is, when you pay only for names you use), he says mailing the multi-buyers definitely is a good idea, because you’ve already paid for the names.

As far as timing for list updates and de-duplication processes, Klapprodt thinks they should happen quarterly, or if you’re a seasonal mailer, just before your season.

In general, updates depend on frequency of customer addition and mailings, says Trollinger. The more active your list is, the more maintenance it requires.

5. Promote Rental of Your List

Hochberg says studies have shown you can’t over-rent your list, as long as you rent it to the right marketers. That’s where your list manager comes in. “It actually increases your list’s effectiveness by keeping your customers actively mailing and having positive direct mail experiences,” Hochberg says.

Klapprodt agrees that a renter’s reputation is an important consideration. He warns that if companies to which you rent your list treat your customers poorly, it can turn those customers off to the whole idea of buying from catalogs.

Of course, renting your entire 12-month buyer list to your closest competitor may not be a great idea, although many mailers will exchange names with competitors on a one-to-one basis.

List rental also can provide good external feedback about your list’s health. When other mailers stop wanting to rent it, you know it’s not working as well as other lists, says Trollinger.

6. Raise Old Customers From the Dead (File)

Klapprodt details the following as an effective way to turn former customers into active ones: Run a merge/purge of them against outside rented lists. When they hit up against outside lists, you know they’re still active (just not with your catalog).

This technique is called “super dupes.” Cooperative database companies like Experian’s Z-24 and Abacus can do this quite effectively because of the amount of data they can access.

7. Learn From Your Housefile Inventory

A housefile inventory shows customer counts organized by recency, frequency and monetary (RFM) values. It’s a road map for offer strategies, and Trollinger says you can never spend too much time analyzing this information. Of course, the more variables a housefile inventory examines, the more time analysis takes.

In order to build reports like the housefile inventory, run queries in software programs such as FoxPro, Access, Ecometry and Mail Order Manager. Trollinger says the last two are the ones he hears his clients talk about using the most.

8. Discern to Whom You Should Not Be Mailing

Klapprodt, who worked at Abacus for several years before joining Lett Direct, recommends the cooperative databases for help with list enhancement. “They can eliminate the worst-performing 10 percent to 20 percent pretty effectively,” he notes. “They have information that any one cataloger doesn’t have access to, such as what the people on the list are doing with the rest of the industry.”

9. Monitor Changes in Your List’s Size

Hochberg recommends looking at your buyer file by range of the customers’ last purchase date. Compare the customers who purchased in the last six months with those in the seven- to 12-month range and those in the 13- to 18-month range.

Explains Hochberg: “You can see the migration of customers through your file and thus predict how many names you might have available in each segment for future mailings. Be wary of declining 12-month files; mailing fewer catalogs will only continue the downward trend.”