You Still Don’t Rent Out Your List?

To those catalogers who won’t rent out their buyer file, I have a question for you: It’s nearly 2008, who are you kidding? While most do rent out their files, some catalogers still feel they’re keeping others from mailing “their” customers by not renting out their buyer files. Oh yeah? This may have been true 15 or 20 years ago, prior to the introduction of cooperative databases, but certainly not today.

Those who continue not to rent their housefile are missing out on the opportunity to mail “good” names themselves while gaining additional list rental income. This month, I want to discuss best practices when renting your database and the advantages of doing so, because there’s plenty of opportunity out there for you on both sides of the rental fence.

Less than 10 percent of all consumer catalog companies and about 25 percent of all B-to-B catalogers don’t rent or exchange names with other companies, according to one list firm’s findings. Conversely, most catalogers will exchange names only with companies whose lists they wish to use. These companies make up about half of all consumer catalogers who don’t rent or exchange names with others.

It used to be that catalogers would have difficulty obtaining lists if they weren’t willing to rent out their own files. This mind-set has changed since companies are hungrier for list rental income to help their bottom line. But no doubt: Not renting or exchanging names impacts the lists available for prospecting.

Consumer vs. B-to-B
If you’re a consumer cataloger, I see no reason why you shouldn’t rent your customer file. For B-to-B catalogers, the decision to rent or not might be more difficult. In B-to-B, the decision maker often is difficult to reach, so the list could be more exclusive and proprietary. Then again, if the offer is noncompetitive, why not rent? If the offer is more competitive, however, you still might want to consider an exchange.

Consider the impact the co-op databases such as Abacus, NextAction and others, have had on your housefile and list rental income. It's likely that a high percentage of your customers already are on one or more co-op databases. In fact, Abacus has more than 95 percent of all catalog buyers on its database. When catalogers join the Abacus Alliance, very few (1 percent to 5 percent) new names are added to that database.

Your customer names already are being rented — if not by you, by the co-ops (even if you don’t participate in any of them). In more cases than not, catalogers that don’t rent their customer files are only hurting themselves and missing out on list rental income that helps the bottom line. The truth is, catalogers who elect not to rent aren’t protecting their customers from mailbox clutter or from other offers.

Name-flagging
In countless surveys, it’s been proven that mailing lists used by other companies perform better for the list owners over time. The companies that have tested this have “flagged” names three ways:
✔ names to receive all list rental offers;
✔ names to receive noncompetitive offers; and
✔ names to receive no outside offers.

These tests generally are conducted over a two- or three-year period, and the names are “frozen” over time. In all cases, the results showed that the names receiving all offers, including the competitive offers, responded best to the company’s own offer. The worst cases from the studies I have seen show there was no effect on response rates to companies’ individual offers if they rented out their files. In considerably more than half of the tests I’m aware of, rented names performed better. It’s easy to conclude this: Active mail order buyers are worth their weight in gold.

One change in recent years has to do with the number of companies that manage their file in-house. Most catalogers now are looking outside to list management firms. That’s because catalogers often don’t have the internal staff and realize they need the extra exposure only an outside list manager can provide.

There are a few angles to consider today when exchanging your mailing list. While some of these eight tips are fairly standard and timeless, others are quite relevant to the times and could be eye-openers.

1. Keep your list updated regularly so the names are fresh. Otherwise, mailers will stay away from using your file. Names older than six months often are considered too old to mail. Recency is key.

2. The more list selectivity, the better. This will give you, the list owner, access to additional markets. It also will give the mailer the opportunity to find other pockets (i.e., selects) within the file if it doesn’t work the first time a particular list is tested.

3. Be careful of the mail piece. The list owner needs to feel comfortable with the company accessing its file. For example, in a lower-end market, many mail pieces can be misleading, and several of these types of offers are being declined.

4. Keep the pricing competitive and remain flexible. Be willing to negotiate with noncompetitors.

5. While you always should screen and approve mailers that want to rent your file, view them from your customers’ perspective. Eliminate offers that are inappropriate based on your own definition.

6. Try holding back some of your housefile for a period of time. Some companies hold back their best names from their 30-day hotline buyers.

7. Consider exchanging on a name-for-name basis using the same selection criteria, such as the last list select of three-month buyers who spent more than $100. Don’t let your exchange balance get too skewed one way or the other.

8. Consider a mail date restriction if you feel it’s necessary. In other words, don’t let a competitor use your file prior to the mailing of your own catalog. Be sure your catalog is in the mail first.

Conclusion
About 20 years ago, it made sense to keep your list off the rental market to stop others from mailing your customers — not true today. Consumer catalogers, in particular, that won't rent their housefiles miss out on access to “good” lists and/or list rental income that will add to the profitability of their companies. That’s because approximately 95 percent of catalog customers appear on one or more of the co-op databases.

Even though these catalog buyers aren’t being mailed from your list directly, they are being mailed. Follow these suggestions and rent/exchange your buyer file with confidence. And don’t think you’re protecting or keeping your customers all to yourself.

Stephen R. Lett is president of Lett Direct Inc., a catalog consulting firm specializing in circulation planning, forecasting and analysis. You can reach him at (302) 537-0375 or at www.lettdirect.com.