List View: The Bottom Line on Commissions
In the beginning of the list business, a broker offered his list acquisition services to a mailer, who replied with the question, “And what shall I pay you for this?” The broker answered, “20 percent.” And it was so. The broker also offered to manage a list for the same 20 percent, and it was so. Then a list professional offered to do only list management, and to get the business he or she offered to do the same services for 10 percent. And it was so.
The years passed and the list business grew. Supply and demand shifted as more list companies opened their doors. After many years, sophisticated targeting tools became available, changing the way lists are used and paid for. Experienced,
high-volume mailers discovered they had great bargaining power with their list vendors. While the industry standard compensation structures have not shifted, commission has become a hot topic in industry discussions.
What follows are some questions you should ask yourself before negotiating your next commission agreement.
What marketing or creative services do you expect your list professionals to perform, if any?
List brokers and managers started out doing list acquisition and list sales respectively. Due to corporate downsizing and increased workloads, many mailers now depend on brokers and managers to be an extension of their marketing departments. This requires them to take on additional responsibilities, extending beyond their core list services.
Some examples of services list professionals now might provide include: housefile optimization, customer contact management, creative consulting, strategic alliances and print production. While these services allow for wonderful partner relationships between mailers and list companies, they require extra time and resources on the part of the list firm.
Do you want to bargain for lower commissions and possibly receive lower service levels?
While some mailers require their brokers and managers to handle more marketing responsibilities, other list companies will take on an account for less than the traditional 20-percent and 10-percent commissions to get the business.