Direct Selling: Get More Bang for Your Buck
3. Bring in more names than you need.
This tip applies to both housefile segments and prospect lists. As mentioned above, there often are mail quantity specifications that are set prior to going into the merge/purge. Printer contracts have been signed that guarantee a specific mail volume. In addition, you may be testing new lists or new segments within proven lists in search of new opportunities to grow your file. List order minimums often are 5,000 to 7,500 names and frequently, these are the test order quantities that mailers opt for. However, you should consider the impact on quantities in the merge/purge.
Every mailer that is a member of the Direct Marketing Association (DMA) should run all outside lists against the DMA’s National Do Not Mail file. When you do that, you may be surprised how many names from your prospect lists will match that file and, as a result, not be included in the mailing. Also, consider the Rule of 100s mentioned earlier, and couple that with the fact that many mailers realize response rates from prospect lists in the range of 0.8 percent to 1.5 percent. Given these points, if you want to get 100 responses from a prospect list at a 0.8 percent conservative response rate, you need to mail 12,500 names. Now consider the effects of the merge, where you may lose 10 percent of a list to duplicates and Do Not Mail matches. You would need to bring about 13,850 names into the merge/purge to get the 12,500 names you want to mail. Said another way, if you order 5,000 names (the typical order minimum) you may only get 4,000 in the mail which, on a good day, might produce 48 orders—not much to learn from.
4. Go random in the merge with prospect lists.
There are varying opinions about how to treat prospect list hierarchy in the merge/purge. Some mailers take the position that all exchange lists should be ranked higher than cooperative database lists, which would rank above any pure rental files. This approach is better for managing costs, particularly when net-name arrangements are put in place for rented lists.