List Management Inside or Out?
By Gabrielle Masquera
Small- to mid-size marketers may consider the question of whether to hire an outside manager for list order fulfillment to be one of expense: Can I afford to outsource?
But ultimately, the decision instead hangs in the balance between who maintains your database now and the plans you have for it in the future, according to Jim Wheaton, principal of Wheaton Group, a database marketing consultancy.
Wheaton suggests marketers start by asking themselves three questions during the decision-making process:
>Do you maintain your database in-house? Companies who do stand a better chance of also managing their own list order fulfillment, Wheaton contends. In this case, outsourcing fulfillment would only complicate the process by making the third party send database extracts after every update.
>How many list order fulfillment requests do you receive per year? Companies fielding hundreds of requests annually may want to outsource due to the sheer bulk of orders. Conversely, a company whose list isn't on the market and receives only a few dozen requests, or one who only participates in list exchanges, may be wise to keep fulfillment in-house.
>How much effort is required to market your list? An unusual list that doesn't yield much activity may necessitate help from a professional manager not only for fulfillment, but for marketing as well. Steve Trollinger, vice president of client marketing at catalog consultancy J. Schmid and Associates, says size doesn't matter on this point. He personally encourages clients to use outside list companies instead of keeping order fulfillment in-house because of the large effort required to market a list, no matter how large or small. "Smaller catalogers who have not even 100,000 names—that's not large, but it still requires a lot of work," he points out.
Once you've answered these questions, consider your available resources for list segmentation. Again, if you're already handling these responsibilities in-house, you most likely have the infrastructure to do your own order fulfillment. "After all," Wheaton points out, "the logical extension of these people's jobs would be to do list order fulfillment."
Or, he suggests, you can compromise by using an access tool to divvy up your own customers, but hire an outside bureau to segment your actual mailing selections.
Wheaton discourages companies with limited segmentation capability from immediately outsourcing, asserting that most list rental selection criteria are relatively basic. "Advanced segmentation capability to me means more than just creating simple extracts of your customer file," he says.
Indeed, Trollinger claims that as long as you have a fully functioning relational database and some set queries built by either your IT or database management departments, you can build consistent selects, and from those you can compile reports.
Another factor to consider is whether or not you consider your list rental activity to be a reliable profit center, according to Trollinger. Companies relying on this income may want to guarantee it by hiring a list manager, since selling and generating revenue from the file is one of a manager's first priorities.
Having an outside firm manage your list also lends it credibility, he adds.
In fact, Trollinger can recall only one instance when he had a client that chose to keep track of its own list order fulfillment—and that catalog isn't mailing anymore. "They couldn't fulfill the list exchanges at the rate they needed," he explains. "They needed someone to do the paperwork for them."