Takeaway Points to Consider

* Any CEO presiding over a business model that treats all customers as equals is sucking around for a bloody nose.

* The youngest cub in the catalog business knows that customers must be segregated based on performance. The simplest formula in the world of cataloging is R-F-M, or recency-frequency-monetary value. A frequent buyer who bought within the last 30 days and has spent a bunch of money with you is a customer whose behavior you know to be far more valuable than the person who bought one item two years ago and nothing since.

* The list business is a good model for all business. To be successful in renting lists, it's imperative to know the origin of each name. For example, because a person reads TIME is no indication of whether your mailing will work to TIME magazine readers. Which TIME promotion was responded to? Was it a sweepstakes? Professional voucher? Premium or double-premium offer? Six months free? Is the subscription price $19.95 while your offer is $199.50? If your effort doesn't look like any of these, skip the list. It's the thing that the person responded to that counts--the active behavior--not the passive product or service received.

* "I know of no direct marketer that spends enough time on lists."
--Dick Benson

* Robert Willumstad, CEO of AIG--believing he needed to raise $20 billion, only to find out four days later that he needed $80 billion--didn't have his hand on the tiller, relied on deeply flawed reporting systems and is ipso facto a world-class dufus, along with the officers and directors of Lehman, Bear Stearns, Washington Mutual, Wachovia, Merrill Lynch, Morgan Stanley, Goldman and too many more to mention. Add to this pot the top honchos of Ford, GM and Chrysler, who just received a $25 billion bailout package from Congress, a direct result of their utter failure to understand consumer behavior vis-à-vis the price of oil.

* Every business model must be based on the principles of marketing (e.g., not treating all customers as equal) and the key emotional hot buttons that influence human behavior (fear - greed - guilt - anger - exclusivity - salvation - flattery - patriotism).

* Take a close and continual look at the business model you're operating under and the changing market forces working against you so you can do whatever's necessary, from tweaking to major overhaul.