List View-History Lessons (877 words)
By Steve Bogner
Two sayings keep coming to my mind: "The more things change, the more they stay the same," and "History repeats itself." When looking at the past 26 years that I've been in the list services industry, it seems as if the same concerns keep resurfacing.
Postal rates. When I began my career at Walter Karl Inc., the industry was bracing itself for a postal increase. Sound familiar? Back then, the cost of mailing 1,000 Third-class pieces was about to increase to $39/M. The industry has made it through several postal increases and will survive the most recent one, as well.
Privacy issues are another concern. In the 1970s, The Direct Marketing Association (DMA) advocated self-regulation by starting its Mail Preference Service (MPS). The DMA promoted it by regularly placing ads in major consumer publications offering the name-removal service. There also was a small box in the corner of the ad that gave readers the chance to add their names to mailing lists for areas that interested them. As a result, while many people asked to have their names suppressed, many more requested to be added to certain lists.
Today, with the addition of the Internet and growth of e-mail marketing, consumers are more concerned than ever about privacy. I believe the DMA, and we as an industry, should tackle the privacy issue head-on like we did in the 1970s. Why not recreate those ad campaigns? This time, however, we could call attention to online and offline direct marketing and run ads in the fall/holiday season. Let's once again bring more customers to direct marketing by informing the public and promoting our industry in a positive light.
List price negotiation. Before basic merge purge was introduced, all lists were taken on Cheshire labels. If you rented 100,000 names, you paid for 100,000 names. The initial benefits of merge purge were realized through saved paper, printing and postage costs. Soon after, other benefits, in the form of price negotiation, were realized; brokers began negotiating for price reductions centered on various deductions and net names. This is when the term "computer verification" came into vogue.
Price negotiation has evolved into something we take for granted. Indeed, our job has become just as much about that as it is about list recommendation. It's almost unheard of for a broker to place an order without asking for a concession, regardless of use, frequency or quantity requested. This has helped, as well as hurt, our industry. For example, the broker's role has come into question, and today's mailers often select brokers based on pennies saved rather than on market knowledge.
In the past two decades, I've read many articles focusing on the effectiveness of brokers in the face of excessive discounting, as well as how brokers should be compensated. One thing that will never change, however, is how critical it is for a list broker to have adequate experience. Price should be only one of many considerations when choosing a list broker, and certainly not the most important factor.
A good broker is a mailer's lifeline, and a knowledgeable broker is important to the client's ultimate success. Equally important is for brokers to realize their limitations and not promise clients expertise in areas that fall outside their domain, such as merchandising and creative strategies.
Broker compensation. In terms of broker compensation, one factor that's hurting us all is Abacus. The creation of Abacus and similar transactional databases has overall been good for the industry, but Abacus differs in one important aspect from its competitors: It doesn't offer broker commissions. In this day of ever-increasing competition for a limited amount of funds, this is a significant issue that should be openly and fairly addressed in the industry.
Please don't misunderstand me. I'm not questioning Abacus' value to the industry. But its stance on broker commissions seems unfair. When Abacus first began it could have eliminated all competition and saved millions in salaries if it made the list-brokerage community its sales force, a true partnership much like the Lifestyle Selector product of the 1980s and '90s, and Z-24 today.
Mailers should demand that brokers be commissioned, because it would provide them with several benefits:
• Their brokers would be involved more, and mailers wouldn't be at the mercy of a parade of salespeople covering their accounts.
• Mailers probably could get better service from their brokers.
• Including list brokers would make Abacus more profitable and efficient. It would be less reliant upon salespeople, and we'd all benefit.
Direct marketing will continue to grow as our society becomes increasingly more global and market-oriented. Currently, we're staring the next wave, e-mail marketing, in the face. The Internet is evolving into a powerful tool that assists mailers in obtaining greater response from their house files and in their prospecting efforts.
But as the nature of the commodity and the method changes, the core underlying concerns remain the same. Postal increases, privacy issues, price negotiation concerns and compensation worries are here to stay. And in the best interest of the future, it would be beneficial if we all took a longer look at the lessons of the past.
Steve Bogner is president of NRL Direct. Contact him at (201) 568-0707, ext. 14, or firstname.lastname@example.org .