Wanted: Fresh Names

Ever get the feeling you keep mailing to the same people over and over again? Don’t worry, you’re not alone—you’re just a catalog marketer at the end of the 20th century.

The most profitable names out there have always been multi-buyers who are responsive to catalog offers. So you and your direct, as well as indirect, competitors are bumping into each other by mailing the same names.

Uncovering new sources of names or putting a fresh spin on the less obvious prospects requires some elbow grease and creative thinking. Be willing to learn a lot about your current customers and to explore some unusual territories.

Evaluating Lists

First off, don’t be so hasty to discount the lists with which you’ve shared a good history of response.

According to Howard Kupfer, senior vice president of Mokrynski & Associates, located in Hackensack, NJ, catalogers “fall into the rut of using the same selects all the time” and then abandon lists when response starts to tail off.

A better way to approach the lists you use is to explore new selects, modeling and other optimization programs to squeeze more response out of the files that have worked for you, Kupfer explains.

The flip side of this philosophy, supported by direct marketing legend Dick Benson, tells marketers not to waste time on lists that don’t perform well on the initial test. You might want to re-test if you’re sure you screwed up your first analysis, but a list that doesn’t work can’t be made better.

One of the factors that can throw off mailing results is the makeup of the list. For example, Kupfer explains, seasonality can change the type of customer ordering from the catalog. Or, if the list owner changes price points, tinkers with the focus of the product mix or adds a deferred payment option, the names brought in on those campaigns can be much different from the segments you’re used to mailing.

Once you’ve investigated your current list winners, it’s worth the money to take a closer look at lists you might have tested, or tested without optimizing, to see if anything can be done to find more responsive names, he adds.

However, if you can’t get lists in your core market to perform with any consistency, says Kupfer, you can’t even think about moving on to more marginal lists—such as publishing files or business-to-business files—for business growth.

Stepping Outside

That said, the usual suspects outside of other catalog files are subscription lists, compiled lists, cooperative databases and response lists from companies that offer merchandise similar to the product lines found in your catalog.

To branch off from the typical round-up of sources, you need to dig deeper to find lists that may not exhibit an obvious affinity. Just because you sell sports products and apparel doesn’t mean you have to stick to sports-related lists. You might, for example, find that your best customers also love to travel extensively, in which case a travel magazine subscription list could turn up a good supply of new prospects.

How do you make these connections?

“One option is to use predictive modeling to select prospects from universes outside of the catalog buying universe, in particular, utilizing lifestyle, subscriber and donor data,” says Dave Atkin, product manager at Polk in Denver, CO. “The names from these other sources may exist within the catalog multi-universe, however other types of data, such as self-reported lifestyle information, can uncover hidden markets and prospects whose mailboxes have more space during the holidays and are more likely to respond to relevant offers.”

He adds,”Enhancement of a list with actual buyer data and lifestyle data from other sources, in combination with modeling and scoring, can provide lift. While this may be especially effective with compiled files, it can be useful with other types of lists, as well.”

The hotline select on cooperative databases, such as RFM Plus, have been pretty popular with catalogers, says Kupfer. These databases contain names of recent buyers that you wouldn’t normally get in your current list selections.

Or, try this secret of list expert Rose Harper to find new lists to rent: If you rent your lists, ask your list manager for the names of companies who have tested your lists and, more importantly, followed up with rollouts (indicating decent response rates).

A related trick is to check usage on outside lists for competitor activity. Usage doesn’t get reported on every list on the market, but a well-connected list broker often knows who is renting what list and how it is performing.

This is not to say that usage is the most important factor in determining whether a list will work for you. But it can help you find lists that are worth analyzing and testing.

List rental alternatives

In days gone by, when lists for rent didn’t exist, marketers would approach companies with similar product lines or customer affinity for a rental or exchange. As the concept of renting lists seemed risky, marketers stood a better chance of talking their way into a name exchange than a rental. For some highly competitive markets and conservative business owners, this outlook still holds true.

Just because a particular company doesn’t like to rent its list doesn’t mean it won’t consider a list exchange with the right company. Some careful negotiating on quantity, quality and re-mail can open up names you thought were untouchable.

And, list brokers will tell you that simply because you get turned down once doesn’t necessarily mean a permanent moratorium. It’s smart to check back periodically to see if sentiment has mellowed due to a change in management or business climate.

Sometimes, you have no alternative but to build the list you’d like to mail. Plenty of low-cost alternate media exist to help you drum up prospects and even orders. While the costs associated with these channels are generally cheaper than solo direct mail, the response rates tend to be lower, too.

When determining which alternate media to use, undergo the careful analysis you would devote to researching a response or compiled list. Plus, you need to look for compatibility with certain media. Catalog companies in lower-end markets can make more alternate media work, says Mokrynski & Associates’ Kupfer, but those in the mid-range typically fare better with blow-ins, bind-ins and package insert programs for lead generation.

Niche Ideas

For Don Devine, co-partner of Lighthouse Depot catalog, the top challenge is finding new prospects in a niche market. The catalog sells lighthouse-themed merchandise as well as educational information on lighthouse history and preservation efforts.

Until 1993, Lighthouse Depot was just a store in Wells, ME, run by lighthouse enthusiasts Kathy Finnegan and Tim Harrison. The pair also published a magazine called Lighthouse Digest. When Devine helped Finnegan and Harrison launch a mail-order catalog, the business already had a pool of names on which to draw—Digest subscribers and retail customers. Additionally, bind-in cards placed within the magazine help generate names of catalog prospects.

For a business that mailed 6 million catalogs in 1998 and has plans for 12 versions this year, a larger influx of prospects are needed.

In print media, Devine relies on catalogs that advertise other catalogs, such as the Catalog of Catalogs and Shop at Home. These “publications” charge requesters a small fee to receive a copy of participants’ catalogs, and participants get the names of inquirers.

Lighthouse Depot also runs space ads in magazines that either show affinity for the catalog’s products or that offer special catalog inquiry sections. Devine charges consumers a fee for catalogs requested through these ad programs as a way to qualify prospects.

In most instances, making a harder offer will depress response, but increase pay-up. However, Devine reports that charging a fee for catalog requests does not hurt response, as “lighthouse buffs will go to lengths to track down information and product offerings.”

Another great source of names for Lighthouse Depot is the Web site shared by the catalog and magazine. According to Devine, the site has been live for five years and is an excellent source of qualified leads, probably because the subject matter is specific and because the magazine helps draw a larger pool of prospects. The site pulls in at least 370,000 hits per month.

Lighthouse Depot recently upgraded the site to sell directly to prospects and customers; those buyers who don’t already get the catalog find a copy with their fulfilled order.

The catalog also found direct- response radio effective. By advertising on Boston-based WBZ, one of the few 50,000-watt, clear-channel stations in the country, the catalog’s radio spots have generated leads from upward of 40 states. Leads are not just lighthouse buffs themselves, but also listeners who know a friend or relative who loves lighthouses.

Investing successfully in radio ads is not simple, cautions Devine. “Just advertising on the radio in our local area didn’t amount to a hill of beans for us,” he explains. Lighthouse Depot researched markets and picked WBZ because of its all-talk format and wide audience.

As the store and catalog headquarters are located on the southern tier of Maine, says Devine, one of the objectives was to reach consumers who vacation in Bar Harbor and other spots nearby. The route to these destinations takes consumers right past the Lighthouse Depot store, and generates retail traffic plus catalog prospects.

Even if you don’t have a niche catalog like Devine’s or you don’t feel your current list roster is going to dry up anytime soon, there’s no excuse not to continually test. As Dick Benson always said, there’s no magic number of lists or combination of media you should test. Testing is the only way to find new customers and list opportunities. If you aren’t making breakthroughs or mistakes, you just aren’t testing enough.

Some catalog companies have taken more dramatic steps than participating in a package insert program or testing a new list select. The following companies found that getting their catalog names into the public eye can generate an awareness of their company that translates into more prospects.

• Roman Research, a catalog that offers jewelry made for the 15 percent of the population who are allergic to nickel, collaborates with the American Academy of Dermatology to help educate the public on allergic reactions and prevention methods. By working closely with doctors on panels, articles and projects, the catalog company becomes an authority that consumers turn to for both information and products.

• A company that sells log cabin homes by mail generated interest and demonstrated the homes in a fairly dramatic way by convincing Field & Stream magazine to publish a six-part article on the creation of a cabin designed just for the article.

The company was accustomed to running ads in similar magazines and attending home building shows for leads. Two weeks after each segment of this article appeared, however, the log cabin business would get a flurry of leads—4,000 prospects in some instances!

• For a company whose mission is intricately tied to a cause, doing a good deed translates into more prospects. By sponsoring a six-part documentary called “Legendary Lighthouses” with PBS, Lighthouse Depot culled names from 10-second spots run at the beginning and end of each show. These spots, as well as the video version of the series, featured the store, magazine and catalog, with an 800-number for interested viewers who wanted to learn more on visiting lighthouses or preservation efforts.

Kathy Finnegan and Tim Harrison, co-partners of Lighthouse Depot, are founding members of the American Lighthouse Found-ation and leading experts on the topic. Their involvement within their industry creates a synergy between what they sell and who they are. And that’s a strong hold on a market for any competitor to break.