Get More Mileage From Outside Lists

The last three years have been tough for retail in general, and particularly for catalog/Web companies. This market softness has been felt especially strongly in outside list and cooperative database performance. There are a number of reasons for this. Chief among them:

• A change in the composition of many list owners’ files stemming from large cuts in prospecting efforts.

• Increased housefile mailings. Many list owners did this to help make up for the dropping counts on outside files. The result has been fewer “new-to-file” names on their lists, and a corresponding increase in reactivated housefile names. This, in turn, has had a negative effect on outside list performance.

• An industry-wide boost in mailings to multibuyers partially fueled by an increased reliance on cooperative databases. This trend has increased in the past year or so as new cooperative databases come onto the market.

The convergence of these factors has made it necessary to re-think how you approach outside list prospecting. I like to say that it’s time to approach the use of outside lists strategically rather than tactically.

What does this mean? In addition to the list-by-list analysis you and your broker(s) routinely undertake (the tactical approach), you need to set a series of overall objectives for each season—indeed, for each year—and define a series of steps to ensure you meet those objectives. This is what I call the strategic approach.

A few examples:

1. Construct a plan for making greater use of lists with large universes. The plan should:

• Identify 10 to 15 lists with at least 500,000 to 1 million 12-month names.

• Establish a testing budget that will enable you to test these lists in an organized way.

• Set an objective for making a certain number of the lists work for you.

• Include your broker(s). Work together to create a testing plan for each list, including when to mail it, how many times you’ll test it and what your performance targets are.

• Establish a segmentation plan. This can include: better RFM, product and gender selections; demographic enhancements; custom selects from the list owner and manager; ZIP modeling; cooperative database modeling; and custom modeling. Work with your broker to negotiate pricing that will help ensure the list’s success.

Be patient. It may take several tries before you get to the selection method that works best for your business. The payoff can be very large. If you can get just 50,000 names to work on each of five lists, you’ve unearthed a total of 250,000 new names. If you can mail these segments four times a year, you’ll have a total of 1 million new prospect names to mail each year.

2. Establish the same type of plan for other list areas. These include out-of-category lists, compiled lists and smaller files. This can be a big growth area for your business. If you can identify 10 files of 25,000 names each, this can add another quarter of a million names to your circulation.

3. Get more performance from cooperative databases. To do this:

• Make sure your account representative is fully knowledgeable on all of the database’s products and services.

• Be an active client. The more involved you are in the selection process, the better the models will perform.

• Include your broker. Often he or she will have insights that can enhance performance.

While following a strategic approach, don’t forget the basics that have served mailers so well over the years. These include:

1. Getting optimal performance out of your best lists by mailing deeper; mailing hotline names in-season; and doing selective in-season remails of your best lists.

2. Finding productive pockets of names in marginal lists by using tighter RFM segmentation; ZIP modeling; demographic enhancements; and cooperative databases or custom modeling.

3. Making productive use of multibuyer names by mailing to these names as often as permitted; using the best mail dates for these strong performers; and placing all unmailed multibuyers in your next merge.

The right combination of strategic thinking and fundamental list work can result in productive circulation growth. And that will help you increase your customer file, improve your sales and grow your business.

Your broker is a key partner in all of these areas. The more you involve your broker, the greater your chances of success.

Steve Tamke is senior vice president of Mokrynski & Associates Inc., a list brokerage and management firm serving the catalog industry. He also is a member of the faculty of the Master of Science Degree Program in Direct and Interactive Marketing at New York University. Tamke can be reached at stamke@mokrynski.com.