Lists in the New World
The past year has been puzzling, frustrating and, most of all, challenging for direct marketers. Should I cut back on my prospecting efforts? Can I trust results from lists I tested last fall? These are just some of the questions direct marketers have been pondering.
We've been wondering how the congruence of Sept. 11, anthrax, a down-market economy and distrust of business leaders has affected lists. To gain some perspective, Target Marketing's Hallie Mummert talked with Brian Kurtz, executive vice president of Boardroom Inc., a publisher of newsletters and books.
Target Marketing: How have changes in messaging strategies affected lists?
Kurtz: What a lot of people are finding is that if your control group is a list that is in one of your continuation files, then the same type of message you've been using over and over—whatever the number of years—all of a sudden isn't resonating the same way with that audience.
So what happens is that when you change the messaging—whether it's to cocooning, security or whatever fits for your product—you're not going to go out and find a bunch of new lists to mail. You might, but my sense is that the average person is now simply responding to different messaging—because the world's changed.
I'm making the assumption that all lists move with the universe. Anything that affects consumer behavior in such an incredible way as Sept. 11 and anthrax, to some degree … those issues are bigger issues than anything we've seen in quite awhile. I don't see how your creative can't be sensitive to [that].
TM: Couldn't these new messaging strategies be applicable to new lists?
Kurtz: Any time you change the creative approach, there is always the possibility of opening up new list markets. It's just as true now as it's ever been.
We had situations [at Boardroom] where we had different versions of the same offer, and each one went to a different list universe. You have that with sweeps and non-sweeps, for instance.
I think what's been added to the mix is a new theme [of security and trust] that can bring in more from the existing list universe, and then add new universes. There's always that possibility.
TM: Are there any repercussions for marketers mailing more heavily to their housefiles?
Kurtz: Clearly, the hotlines are going to have fewer names; you're not bringing new names into the mailable universe of your list or anybody else's list that we haven't seen before. It's multi-buyers on top of multi-buyers.
Now, those are great mail-order people. So, if you have a new offer going to a particular list, I don't think those names are inferior.
TM: How can you find out if a mailer is blitzing its housefile and doing little prospecting?
Kurtz: Every mailer is different, and that's why it's always important to ask list managers and list owners about the habits of their mailing schedules—and what the mix of house versus outside is at any given point. The last thing you need is a list that's completely different from one quarter to the next.
TM: Quite a few companies have merged this past year. Any concerns for mailers?
Kurtz: Just because companies merge, I wouldn't assume that the lists were merged.
Hopefully, the list owners or managers would be sensitive to the community of people who are using those files and would respect the fact that they've been looked at as separate lists for so long … you can't in one fell swoop put them together.
My experience is that lists are usually kept separate and then new files [based on the merger of the two main lists] are created for new testing. Then, of course, you have to ask questions about how much duplication there is between what you used to mail versus what was just put together now with this new "master file."
Should you test both, de-dupe them and will one of them yield you a bigger continuation universe, and therefore maybe you'll move to the second one and forget about the first one? But you have to run parallel at some point, and the list owner or manager has to be equipped to do that for its mailers.
TM: With marketers testing into new media recently, how valuable is the source of the list?
Kurtz: Source is one of the most important things to find out about a list when doing your research. Especially if a source has changed. Is it 80-percent direct mail this month, 80-percent space ads the next month, and then 80-percent DRTV the month after that?
[Source has] always been critical, and I don't know how you can say it's more critical … but in this environment, when people are looking for magic bullets and quick answers, it is more important than ever to ask about source make-up on a regular basis. It can change in a heartbeat.
I will say that the lists that have been getting their lion's share of names through direct mail are not flipping over to e-mail and telephone, and all of a sudden that's the lion's share.
If [Boardroom's] list goes from 5-percent telemarketing to 15-percent telemarketing, that could make a difference on a particular hotline, in terms of breakeven. But it could go the other way, and be more responsive.
The one thing I do see is that mail is still the medium of choice for critical mass and developing critical mass.
TM: Are there other factors affecting response rates, and thus list size?
Kurtz: The only thing that scares me about this particular cycle is how much postage has increased multiple times.
I would say the things that are getting in the way of recovery this time are major disruptions. There's always something in the news. Then you throw in the Internet as the ultimate distraction. Not totally bad, but bad as far as attention span for direct mail is concerned. I think that the Internet is just this other place that people are going. How much less time are they spending with their pile of postal mail, when they have their e-mail to check as well? There's still the same amount of time in each day, last time I checked.
TM: Why is it critical to track list history, especially after a major event like Sept. 11?
Kurtz: We have asterisks on mailings that were dropped around critical events, mailings that will forever be labeled problem mailings. In terms of test lists, you have to use your judgement. You don't want to repeat the whole mailing, and there are probably some things you still learn in a mailing that goes through the floor.
To take a weighted average of all response rates of a particular list is a starting point. But if you take an equal weighted average against all mailings, and one of the mailings you're weighing is a mailing that was down 30 percent across the board in a period of terrible response rates—even if it wasn't a disaster or something in the news that got the nation's attention—that has to be asterisked, too. And you just weigh it. That's what we do as marketers. You can't let the computer give you the response rate all the time.
I believe Dick Benson's quote was, "You've got to believe your numbers." Your numbers are all you've got. You're going to retest what was mailed [in turbulent times] and take what you can out of your results.