European List Experience List Strategies That Worked for Three
It's been said the success of a direct mail campaign depends 40 percent on lists. International campaigns are no exception. Here three U.S. direct marketers share their experiences with local, in-country lists in Germany and the United Kingdom.
Day-Timers, a marketer of business and consumer time-management planners and organizers, started to market globally when it set up a U.K. subsidiary in 1994. Solo direct mail is used for prospecting, and a catalog is mailed on the back end to retain existing customers. When it comes to lists, its strategy is "close to that of its U.S. operations, but on a smaller and less sophisticated scale," notes Nigel Woof, general manager, Day-Timers Europe.
In the five years it has been renting U.K. lists, the universe of lists available for rent has grown substantially. Consequently, Day-Timers has found a few good lists that didn't exist four years ago.
Given the success of its U.K. venture, Day-Timers launched its first foray into the German market in 1997 with a German-language package. Overall, Day-Timers is a big user of local, in-country response lists. Germany, however, is much more dependent on compiled lists than response lists, notes Woof, who adds that while the compiled lists are of a very good quality, they are often derived from the same sources.
Day-Timers believes in developing a close, long-term relationship with its brokers, choosing to work only with one broker in each country outside the United States. One of the benefits of establishing a relationship with an in-country broker is that they know better how to maneuver around legal restrictions. In Germany, laws prohibit mailers from making more than two list selects. However, an in-country broker can suggest alternatives to help fine-tune your list selection without breaking the law. Says Woof: "Targeting, even with legal restrictions, has not been a problem in either the United Kingdom or Germany."
J&L Industrial Supply
This business-to-business direct marketer of metal working consumables finds accessing information takes longer in Europe than in the States. Says Cathy Veri, J&L's director of marketing, "It's a little like playing a game of hide-and-seek." With fewer b-to-b lists available—most of which are compiled—and few unique lists, "you have to talk to people within your industry to find the information you're looking for," Veri adds. On the flip side, "there are definite benefits to renting local lists because the list brokers know their data better," says Veri, who, like her counterparts at Day-Timers, only works with in-country brokers.
Targeting small- to medium-sized manufacturing companies with fewer than 200 employees, Veri finds her biggest challenge is finding lists with the names of purchasing agents. "You can always get the address, but sometimes it's difficult to find the name of the person who will buy your product." Appropriate names are more readily found on publication subscriber files, but these lists are not always available.
In the United Kingdom, where J&L has used a mixture of compiled and response files, Veri looks closely at the data to make sure the titles and size of companies fit with J&L's target audience. She also scrutinizes SIC codes because classifications differ overseas. "You have to search for what you want; our best SIC in the States doesn't exist in the United Kingdom," she explains.
J&L mails 80,000 pieces monthly in the United Kingdom and 90,000 pieces eight times a year in Germany. Due to postage costs, it only mails its master catalog once a year and uses a lighter mail piece dubbed "The Advantage" for subsequent mailings. "The Advantage" spotlights 200 to 300 discounted items from its master catalog and is used both for customer acquisition and retention.
Mail campaigns are split evenly between housefile names and prospect names. Because J&L often captures more than one contact per company, mailings more accurately contain 75 percent customer names and 25 percent prospect names. Acquisition mailings have generated a 4-percent response within the first year of its German operation and have pulled similar response rates in the United Kingdom.
Carol Wright Gifts
Carol Wright Gifts, a general merchandise cataloger, first tested the U.K. market in 1994. Finding consumer lists proved difficult, so it began to build its own file with a mixture of space ads. As the U.K. list market grew, it began using local consumer response lists almost exclusively.
In early 1998, the cataloger launched a 1.1 million piece mailing in Germany. It scheduled a follow-up mailing of 3 million pieces, but the plans were nixed when the cataloger was acquired by Genesis Direct and international operations subsequently shut down.
Carol Wright had been testing consumer response lists matching the demographic profile of its U.S. customers in both the United Kingdom and Germany as well as a few compiled lists. "Almost without exception it a took a catalog buyer file to make it work," says Erik Hook, former director of international marketing for Carol Wright Gifts.
The percentage of mail pieces in each campaign sent to outside lists varied by season. Summer wasn't profitable for prospecting, so only a small percent of the mailing was sent to outside lists. Prospecting was better in the fall when half of the campaign went to outside lists.
U.K. housefile names were split into two subfiles: names generated via space advertising and catalog buyers. The space-generated names, according to Hook, had a limited lifetime and only converted profitably for six months, after which it would have to dig deeper into the file with selects to make the names work. However, Hook adds, these names were a good way to get the business started. He notes that the company was able to mail catalog buyers deeply.
Response rates in the two countries were similar in that response was "radically different between prospect lists, in either a test or rollout, and the housefile," says Hook. Response to prospect lists was about 2 percent in both countries. U.K. housefile names typically pulled a response rate of 5 percent, with some segments pulling slightly better or worse. In Germany, the housefile pulled up to 10 percent.
Know Before You Go …A List Rental Checklist
• Select an international list broker.
A broker experienced in international lists and foreign markets should know which lists are working and be able to give you insight into your particular market, as well as recommend merge/purge bureaus, lettershops and postal services.
• Provide your brokerage firm with full details of the mailing.
The information should include: the offer, sample mail piece, customer profile, former list usage and response, mail quantity and your budget and timeline.
• Put your instructions in writing to avoid misinterpretation.
Professions and terminology aren't the same worldwide; Case in point: in the United Kingdom, what we in the United States call "nixies" are called "goneaways" while "expires" mean people who have died.
• Ask to see sample data.
As anywhere, the quality of a list depends on its source. Check to see that the list contains full postal codes and full first names and surnames.
• Draw up an agreement regarding nixies and de-duplication.
The agreement should be made before you receive the data. In the event that a large portion of the data cannot be used, you will have recourse.