Making Compiled Lists Work for Your Prospecting Plan
Robb Ruyle, president of Powderhorn Industries in Montrose, Colo., says his company always has used compiled lists almost exclusively. Even for the firm's first-ever mailing to promote a baby bib more than 22 years ago, Ruyle says he basically compiled his own list from a hospital directory. "Our customers are institutionswe want to reach people in hospitals, doctors' offices, nursing homes. So that's why we tend to turn to compiled lists."
To make these lists as targeted as they can be, Ruyle uses a variety of selects, which vary depending on which audience his multiproduct company is marketing to at the time. For example, Powderhorn's Birth Rite division markets baby bibs, T-shirts, caps, etc. To sell these promotional items, Ruyle says, "For obstetricians, we want office-based physicians who are age 55 and younger. The reason for that is the products we sell are business-building tools. So we don't want to reach a soon-to-retire physician. We want those who are looking to build a practice."
Powderhorn works with Mailing Clearing House and has done so for 10 to 12 years, says Ruyle. "Once we find something that works, we stick with it. Their compiled lists offer good quality; there's not a lot of nixies."
Powderhorn is not alone these days in making compiled lists a central part of its direct mail prospecting efforts. As Michael Heaney, vice president of sales for publishing list brokerage at Millard Group, Peterborough, N.H., says, "With so few new direct mail-sold lists coming on the market, compiled files have become more commonplace in circulation plans. They offer volume at a reasonable CPM, as well."
Tom Walsh, client management officer at ClientLogic Specialists Marketing Services, in Fair Lawn, N.J., also notes more B-to-B and catalog mailers using compiled lists. "We have seen a tremendous growth in the use of compiled data in the past several years."
Walsh adds, "The mailer's perception of compiled lists has changed favorably due to a variety of factors. First and foremost is the huge increase in detailed demographic data available, coupled with the vast multitude of verification programs to make compiled lists deliverable on a par with response lists."
While compiled lists always have played an integral role in the B-to-B arena, explains Paulette Schlotman, senior B-to-B broker at MeritDirect LLC, White Plains, N.Y., what's different today is that more B-to-B mailers are choosing compiled lists for some mailing needseven over controlled circulation files or subscriber listsbecause they tend to be less expensive.
"It's not so much that mailers have changed their perception,"
says Schlotman. "It's that they have found a way to utilize compiled names strategically." Within a database environment, she explains, these names are used on a net/net basis. "What mailer wouldn't love the opportunity to obtain his best core lists, in his best-performing industry segments and fill in with compiled names of the same SIC and employee size categories? It's truly the best of both worlds with a palatable financial investment," Schlotman asserts.
Picking the Best Compiled Files
As a first step to getting good performance from compiled lists, you have to start by choosing the right compiled files to mail. When it comes to finding compiled lists, what should mailers look for?
According to direct marketing consultant Gary Hennerberg, there are different levels of compiled lists. "At its most basic, you can go to a compiler and ask for all of the households in Chicago with a certain income criteria. The large-scale compiled lists cast a wide net. You might want to use selections, such as household income, age, home ownership, new movers or length of residence [to narrow the file]," he says. In deciding which of the many available selections to test, Hennerberg recommends studying your offer and really visualizing your target market. Who is it you are trying to reach and what are you trying to sell? That will help determine what selections will be most useful in zeroing in on that target audience.
"Of course, one limitation I see with any compiled list is that you usually can't use a compiled list for a niche market," says Hennerberg. "You need a fairly mass-market kind of product to make compiled lists work."
Millard's Heaney says compiled lists have improved from when they were all created from public records. As he explains, "Most of the compiled files we use are not truly compiled the way we used to think of these filesthey are more survey driven, so there is a direct response component that is improving performance." He adds, "The more self-reported data, such as survey, the better. We're looking for a lot of demographic info from these files, so the more data that is reported by the consumer, the better."
When looking for compiled lists, Walsh's recommendation is to work with an experienced compiled list expert who is familiar with the many overlapping databases and selections available. This person can guide you through what Walsh calls "the maze" to find the most up-to-date, fully segmented and deliverable file on the market. "All compiled lists are not equal," says Walsh. Among the factors Walsh says to take into account when deciding which compiled file to use:
* data manipulation;
* data cleansing; and
* postal cleansing.
Schlotman agrees that in terms of quality, looking for continuity of process and updates is important. But she adds, there are certainly data elements that differ from compiler to compiler. "Taking the top two in our B-to-B arenainfoUSA and Dun & Bradstreetthey are quite different. Dun & Bradstreet is a credit-driven file. On the other hand, infoUSA is a telephone book compiler. Each compiler brings specific and strong components to the table." Schlotman says it is up to the broker to understand those files organically, and to recommend, based on offer, which compiled file would be the best for its client's specific needs.
Techniques to Refine Compiled Lists
As a next step toward getting the optimum performance out of a compiled list, a mailer can use a variety of list selections to hone the list down to the best prospects for its particular offer. Millard's Heaney notes, "The ability to really mine deep into a compiled/database file and select only the components that have the best affinity to the mailer's audience is the advantage of such [compiled] filesalong with larger universe and reasonable CPM."
Heritage Foundation, a conservative public policy "think tank" in Washington, D.C., typically mails 4 to 5 million pieces annually. However, in 2004, the organization mailed 6 million pieces, building on the opportunities created by the economy and the election year, says Carsten Walter, director of membership programs for the organization.
To meet that volume, Heritage, of course, uses a variety of listsincluding compiled. But it carefully weighs its volume requirements against a desire for higher initial gifts. "We included compiled lists in our mix of acquisition mailings. I would say the lists are on the fringes of our market, and our success with these lists has been primarily with higher dollar names," Walter says.
"The higher initial gift size is obviously more desirable," Walter explains. "We look to build lifetime value, so with larger initial gifts we can work to establish a longer-term relationship." Sometimes, to get higher gifts, you might give up some volume on a mailing. But this has to be a careful balancing act. Give up too much volume and your new donors will slip to too low a level to sustain an active and efficient direct marketing program.
Constant list testing requires a balance of "about one-third core lists that we know work, one-third just on the fringe of our universe and one-third testing outside the box to try to break into new lists," says Walter. "We're always trying outside-of-the-box lists, and occasionally we'll get a hit off of one."
For some mailers, the use of modelingsuch as ZIP code modelsis another way to help bump the effectiveness of compiled lists up another notch, assuming the marketer is mailing significant enough quantities, suggests Hennerberg. "Taking compiled lists to the next level, companies such as Equifax or Experian will model compiled names," says Hennerberg. By applying a model to a compiled list, you can refine that list to make it mirror a cross-section of the names in your own housefile database. Without spending to build a custom model yourself, these companies do a good job of obtaining quality results, he says.
For B-to-B mailers, the use of models in the database environment is especially important, adds Schlotman. "This is where segmentation comes into play. Based on a mailer's customer files, modelers are able to determine positive factors within lists that contribute to better response and lifetime value. This certainly is a very efficient way to use compiled lists," she says.
ClientLogic's Walsh cites cross-segmentation as another important tool to use to hone in on the best prospects. In many cases, Walsh believes that if a list professional and mailer can sit down and study the mailing's offer, they then can create the cross-segmentations that will work best for them. Walsh concludes, "The more detailed knowledge and familiarity you have with compiled lists, the easier it is to segment, select and pull the right names."
Alicia Orr Suman is a freelance writer covering the direct marketing and catalog industries. Contact her at firstname.lastname@example.org.