The Rule of Lists

One of the legendary Bob Stone’s “Timeless Direct Marketing Principles” is this:

Maximizing direct mail success depends first upon the lists you use, second upon the offers you make and third upon the copy and graphics you create.

Over the years, I’ve seen many variations on Stone’s principle, such as “60 percent lists, 30 percent offer, 10 percent creative” or “40 percent lists, 30 percent offer, 30 percent creative,” and so on. But no matter what the variation, all experts basically agree that lists are king, and everything else is secondary. So that’s how I’ll phrase my “Rule of Lists” for this column:

The Rule of Lists: Mailing to the right lists will have a bigger impact on your response rates and sales than anything else you can do.

What makes lists so important? In the broadest sense, this question is easy to answer: No matter how fabulous your offer, or how dramatic your presentation, it won’t generate many sales if your catalog winds up in the hands of people who aren’t interested in what you have to sell.

In other words, you can’t sell steaks to vegetarians.

This basic concept of “mailing to the right people” is easy for people to agree with at a cocktail party. But when you get back to your office and start trying to apply the general rule to your own cataloging reality, a lot of challenging details start showing up. It’s not easy to see how to turn the general principle of “mail the right lists” into a real-world plan for generating higher response rates.

Exactly how do you mail to the right people? Let’s take a closer look.

The Perfect List. It’s easy to define the perfect list for your catalog: The “perfect list” is a list of people who are guaranteed to buy soething from your catalog.

And the most important thing to realize about the perfect list is, it doesn’t exist.

In other words, no matter what broker you hire, what selects you apply, or how much money you spend, you will never be able to rent or buy the perfect list.

Which puts all the lists that you can acquire into their proper light: all real world lists are compromises with big problems. That’s why list selection is so challenging.

To make the Rule of Lists work for your catalog, you must invest a lot more time than you will think is reasonable.

One of the biggest mistakes catalogers make is investing too little time and attention in the area of lists.

Why? I think it’s because there’s no easy way to tell up front whether a list is good or bad.

This makes lists very different from other areas of cataloging.

For example, in the photo studio, when you’ve come up with a photo concept, and your stylist sets it up, and you look at the Polaroid (or these days, at the shot monitor), if the image is just plain ugly, most catalogers will immediately see it, and begin taking steps to change it.

In other words, with product photography, you needn’t actually mail a photo to your customers to tell if it’s a disaster. But it’s different with lists.

If you devise a list strategy, make the selects and rent the names, all you end up with is a bunch of names and addresses. Are those names beautiful (high responders?) or ugly (terrible responders)? Unfortunately, there’s no intuitive or sensory way to tell, until you actually mail them. With lists there’s no equivalent of “looking at the Polaroid” to bring you up short and make you realize, before you mail, that you’ve been a darn fool and must work harder on your list selections.

Throughout the entire list selection process, you’re “walking in the dark”—you have no built-in senses or intuitions to protect you from mistakes.

So how can you avoid making list mistakes? You must slow down, beware of glib assumptions and think very hard about each step you’re taking.

To make the Rule of Lists work for you, you must first figure out who “the right people” are for your catalog.

If you could rent the perfect list for your catalog, you wouldn’t care who was on the list, since every name would be guaranteed to buy.

But in the real world, there’s no way to find people guaranteed to buy, so we must instead do our best to guess which types of people will be more likely to buy.

This whole process is called “understanding your audience,” and it’s crucial to making the Rule of Lists work for you.

How can I understand my catalog’s audience? You should be constantly analyzing and re-analyzing the answer to the fundamental question, “Who is my audience?”

Look at it from all angles: Which lists have worked in the past? What have surveys told you? Have you done any list modeling? And most importantly, do you regularly talk (literally) to your customers? Are you sitting down, manning the phones and answering your share of order and customer service calls, to keep in direct touch with your audience?

At this point, many catalogers will begin feeling uncomfortable—why can’t they just call a list broker, shoot the breeze about competitive catalogs, make some intuitively warm and fuzzy choices about affinity catalogs and rent a bunch of lists?

And the answer is, for most catalogers, personal intuition about affinity catalogs is a poor guide for selecting high-responding lists.

Catalogers who are good at list selection generally agree that understanding their audience in detail is their most important tool for guiding them through the darkness of list selection.

And by understanding their audience, they mean really understanding their audience.

For example, if someone asks who your audience is, and you reply, “30 percent are age 45 to 55, household income $75,000+, married, homeowner,” you don’t know your audience well enough.

To select good lists, you must know your audience as well as you know your mother, brother or boss.

In the theater of your mind, you should be able to see and hear your customer living, breathing—and making buying decisions—right in front of you. Say you’re thinking of renting the Lillian Vernon list. Can you visualize that customer picking up the Lillian Vernon catalog, turning the pages, becoming interested, buying? You can probably visualize your mother that well … and I’ll bet you can predict your mother’s response to the Lillian Vernon catalog with reasonable accuracy. If you understood your own catalog’s audience as well as you understand your close relatives, you’d be able to predict their buying behavior quite well. That’s why understanding your audience is so important to making the Rule of Lists work for you.

To make the Rule of Lists work for you, you should clearly communicate your understanding of your audience to your list vendors.

No matter how well you personally understand your audience, your list selections will be better if you can communicate that understanding to your list vendors—your list broker or brokers, your Abacus rep, your Z24 rep, your modeling company. Of course, you should be sharing your mailing results with them. But you should also share much more.

For example, have you noticed any response-rate patterns that your vendor wouldn’t otherwise know about?

“I rented catalog A and catalog B. The catalogs look similar, carry similar merchandise, but A outpulls B. I think it’s because B has lower price points. Our price points are similar to A’s, but higher than B’s. We think B’s customers are shocked by our pricing.”

This kind of audience-based analysis and feedback from you to your list vendors is invaluable, because it helps them understand your audience better, so they can recommend better lists, selects, and models.

To make the Rule of Lists work for you, make sure you understand the different types of lists available, and their imperfections.

Here are the lists you can mail to, and their problems.

1. House buyers. Since these are your buyers, this will generally be the strongest-responding list you can mail. Many people find this puzzling—Why should someone buy again when they’ve just bought from you? Didn’t they get what they wanted the first time? But in fact, for most catalogers, recent house buyers are the strongest list they can mail.

2. House requesters. These are people who haven’t bought from you, but who have requested a catalog. Most catalogers find it intuitively easy to believe that these people will respond strongly to a catalog offer, and in this case intuition is correct.

An exception is catalogers whose ads are misleading. People responding to a misleading ad will be disappointed or shocked by the catalog they receive, and response will be poor. That’s why it’s important not to misrepresent your catalog when soliciting catalog requests.

3. Response lists. These are other catalogers’ recent buyers. It isn’t intuitive or obvious that response lists should work well—but most catalogers find that well-selected response lists produce stronger results than any other lists except their own buyer and requester files.

What’s a “well-selected” response list? Basically, it’s a list that includes people very similar to your buyers. One of the main reasons that understanding your audience is important is because it can help you distinguish between response lists that contain people very much like your buyers, and response lists that don’t.

4. Compiled lists. These are people who share specific sets of identifiable characteristics, i.e., people who own Cadillacs, who have four children, who own their own homes.

Many new catalogers find the idea of compiled lists intuitively compelling. They envision their audience in demographic terms, and imagine that a list of “50-plus-year-old RV owners who own Labrador retrievers” is the ideal list for their catalog of RV pet accessories.

And in some cases compiled lists work well, especially for catalogs with a specific niche. But compiled lists generally don’t perform as strongly as well-selected response lists. That’s one reason compiled lists usually cost less, making them attractive to catalogers. Another reason is, there just aren’t enough response list names out there.

5. Modeled Names. These come from cooperative database companies such as Abacus and Z24. In basic terms, modeling involves contributing your housefile to the cooperative database, where it is analyzed. Then you receive other names to rent with similar characteristics to your buyers.

In sum, list selection is the most vital and difficult part of cataloging. Understanding your audience in exhaustive detail is your best tool.

Susan McIntyre is president of McIntyre Direct, a catalog consulting company based in Portland, OR. She can be reached at (503) 735-9515.