B-to-B List Basics: 10 Keys to Making Good List Choices
With thousands of B-to-B lists available, it can be hard to know where to start. These are the key attributes and tips you need to jump-start your B-to-B acquisition efforts.
Prospecting lists can range in size from less than 1,000 names to 1 million names or more. The traditional approach to direct marketing is to test a small portion of the list, then mail, call or email to a larger portion if the initial test is successful. Some marketers avoid small lists for this reason, because the total number of names available limits the opportunity to market again after a successful test.
Tips: If you're targeting hard-to-find prospects, small, specialized lists may be the best means of reaching certain markets and can lead to the best conversion rates and ultimately the highest ROI.
Read the description to get a better understanding of the market the list represents and how the data is gathered. Be wary when a prospecting list does not contain this information.
Tips: Each data card should contain a paragraph or two about the background of the list: its source, history, a profile of the type of buyers it represents and a description of the product they bought, the publication they subscribe to or the tradeshow they attended. Use this information to evaluate multiple lists within a specific vertical market.
3. Average Order Size
This figure represents the average size of the purchase made by the buyers on the list. Obviously, this metric is only available for buyer-sourced files.
Tips: Average order size will give you a good indication of whether the people on the list are likely to pay your prices or generate the type of return you are looking for from your prospecting efforts.
4. Percentage Direct Mail-Generated
You'll often see the phrase "95% direct mail-generated" or "100% direct mail-generated" on data cards. This refers to the percentage of the names on the list obtained through response to a direct mail offer. The higher the percentage, the better.
Tips: Direct mail-generated prospects and customers are more likely to respond to direct mail than people who became prospects or customers through other channels. Try to match your preferred prospecting channel to a list that generates contacts in the same manner.
This segment represents customers who have made a recent on or offline purchase, or have recently qualified for a list segment, usually within the last 30 to 90 days. Hotlines typically rent for $10 to $25 more per thousand than the rest of the list.
Tips: The more recent, the better. Recently active contacts will be more deliverable and more likely to respond. Additionally, make sure to ask how recent names are for any list being considered.
6. Active vs. Inactive Buyer vs. Prospect
Current customer lists almost always outperform prospect or former lists.
Tips: If you're planning on testing a list of newsletter subscribers, rent the list of active subscribers rather than the list of inactive subscribers. Also, when renting a list from a catalog retailer, obtain the names of people who have bought from the catalog, not those who merely requested a free catalog but didn't buy.
Do your research to find out how well a list performed for people who rented it before you; especially those with offers similar to yours. List usage reports generally show rental activity by tests (i.e., initial mailings) and continuations (i.e., rental of additional names following a successful test). If a high percentage of the marketers who tested are also listed under continuations, you can assume they're getting test results profitable enough to warrant continued use of the list.
Tips: This information probably won't appear on the data card, but it may be contained in a separate list usage report that's made available from the list manager.
This refers to the criteria by which a list can be segmented. More options allow you to market to those people who are closest to your target profile. Look for specific job titles, buying authority, specific product usage on site that mirrors your offer, and other demographic fields that help target your typical customer.
Tips: In general, the more selections, the better. You'll pay a little more on a cost-per-thousand (CPM) name basis, but you'll save more on materials and postage, and realize higher response rates.
9. Frequency of Updating
List hygiene is critical when evaluating a list. Take steps to ensure the names on a list are current and the list is frequently updated. Many list suppliers guarantee their lists to be clean and will refund postage costs on pieces returned in excess of some small percentage. B-to-B lists typically experience between 2 percent to 4 percent churn per month, depending on the market. Therefore, a list that is updated yearly could have as high as 48 percent bad records after 12 months.
Tip: Look for lists that update monthly or, at a minimum, quarterly.
Prices for postal lists typically range from $50 CPM to $200 CPM, with specialized lists costing more. Phone numbers cost between $50 and $100 more CPM, and email lists average $200 to $400 CPM.
Tips: Be skeptical of so-called "bargain lists" selling for $5, $10 or even $25 per thousand. These lists are usually worthless, as they are outdated or incorrect. For postal campaigns, the price you pay in postage and materials will far outweigh any list savings. For telemarketing campaigns, the labor/service costs for telemarketers again will be far greater than the initial savings seen by getting a less expensive list.
Two other items to consider:
- Make sure you have a clear view of your best customers or prospects. Running a profile against current customers can be a great first step in knowing exactly what demographic attributes to look for when prospecting.
- Choose your channel wisely. Whether it be postal, phone or email, select the channel that will offer the best results and the best pool of prospect names.
Carefully selecting a list is critical to successful marketing. It will get your offer in front of the right audience, and maximize response and lifetime value, while minimizing cost and time spent in the long run.