There are 3 Types of Direct Mail Lists:
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Your House List (Customer File)
These are people who have made a transaction of some kind with you. They may be a customer who purchased from you. They may be a prospect who responded to an offer for more information. Anyone who buys from you or inquires about your products and/or services goes into this list.
The House List or Customer file is by far the best-performing list we can mail. The people on this list have expressed a direct interest in our products or services by responding to an offer that you sent to them. We build the House List up by constantly updating and adding transactional information from responses to the mailings that we send.
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| #2 |
Compiled Lists
These lists are derived from directories, yellow or white pages, memberships, survey registrations, and basic information that is in the public domain. Compiled lists are less expensive than response lists because they are not based on responsiveness to certain kinds of products or services.
Five years ago, compiled lists were much cheaper than today’s average costs. This is due to the consolidations and buyouts that have taken place within the compiled list industry. Years ago there may have been thirty or so compilers. Today the number is down to basically six major compilation companies.
The good news is that the information on most compiled lists today is of a much higher quality. Computer technology has advanced the number of variables, selections and enhancements that can be added to compiled lists. And while compiled lists don’t show mail order responsiveness (a key performance indicator), we can always use them if we can’t find a response list for a particular market segment or if we have a small geographic area to market.
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| #3 |
Response Lists
Response lists are comprised of people who have taken a direct action with a third party. Their action was a transaction of some kind for a specific product or service. For example, they may have purchased clothing, subscribed to a publication, made a donation, or requested a catalog.
Response lists are generally more expensive than compiled lists because they are based on a pre-qualification through a third party: a transaction, purchase, or request for information about a specific product or service. This gives us a minimum qualification point by which to justify mailing.
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List Segmentation Techniques
When targeting consumers with Response Lists, selections could include:
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Recency:
How new are the names and addresses on the list? How often is the list updated?
Can most recent buyers be selected (this is called the 30-day hotline)?
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Frequency:
Does the list indicate if the buyers are repeat customers? Are they buyers of different products from the same source?
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Dollar Amount Spent:
How much money did they spend on the product or service?
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Age:
What is the age range of the buyers?
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Geographic Area
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How Many Mailing Lists Are There?
Many people in the list industry will tell you there are between 40,000 and 50,000 mailing lists on the rental market. The true answer depends on how you look at a mailing list. Because of the many selects you can choose on a mailing list, the real number is that there are probably millions of different mailing lists available. Each time you make a select on a list, you change the demographics of that list.
Evolving Lists
We also need to keep in mind that lists that work for us today may not work for us tomorrow. This is not always due to the fact that the list fatigues with time, or that our offer fatigues. Sometimes it’s simply because the list owner has changed the demographics of the list. Take for instance a company that has been in the mail order catalog business and who opens retail outlets. Unless the buyers are segmented by mail vs. retail, the buyers on the list are no longer just catalog buyers, they are people who bought at retail.
We have no control over what happens to the lists we rent over time. The only way to avoid mishaps is to keep testing and working with a List Broker who keeps track of changes in the demographic and psycho-graphic attributes of lists.
The List Rental Process
One of the best investments you can make in your campaign budget planning is to work with a List Broker in the list selection and rental process. The List Broker will provide you with list research within your market sector, and manage the complete list rental process.
The Cost Of Using A List Broker
There is no additional cost to you for using a List Broker. The List Broker gets paid a fee from the list owner in the form of a commission. All lists have published prices that are set by the list owner. The only time it will cost you more money is when you don’t
use a List Broker because it will be difficult to know which lists are best for your product or service.
The List Broker Advantage
List Brokers are responsible for:
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Identifying the mailers competition
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Identifying what lists they are successfully mailing
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Maintaining a database of available lists and database sources
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Providing modeling, mapping, list enhancement, and merge purge services
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Providing a professional support staff to manage the entire list rental process
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Merge-Purge
Before we begin mailing, there’s just one more important thing for to consider: a list merge-purge. Let’s assume that we have selected ten lists to mail, each list containing 5,000 names. This brings our total mailing to 50,000 names. In this case, we should consider a merge-purge. A merge-purge will allow us to remove the duplicate names and addresses, bad addresses, and DMA non-panders.
Merge-purge will cost us some money, but this extra cost will be absorbed by the money we save. We will save on postage. More importantly we will also save on the cost of our collateral. So, if our merge-purge process indicates that we should take 10% of the names and addresses out of our total mailing list, we’ll save 5,000 mailing packages that would have been wasted on bad names.
Stay tuned for next month’s tutorial on List Data Cards and Frequently Asked Questions about Email Lists.
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