Making Outside Lists Work Harder in a Multichannel Economy A C
The composition of outside lists themselves, however, has changed greatly during the last five years:
Many of the names on these outside lists have been acquired via online prospecting sources—the average list contains about 30 percent online buyers (and can include up to 75 percent).
There are fewer new-to-file names, largely due to reduced prospecting in prior years and a greater reliance on reactivating older housefile names.
The lists are more promotional, given many marketers' greater reliance on offers such as free shipping.
Recognizing and responding to these changes now becomes an important part of maximizing the performance of rented names. A few key steps will help ensure you're making the most of these lists:
1. Know the composition of the list and make your selections accordingly.
If a list is 75 percent online sourced, be prepared for a large percentage of the sales to come in online, and make sure you're matching back the Web sales to the mailings.
2. If your company has a retail component, try to estimate the retail sales generated by these lists as well.
3. If your business is not as Web-oriented as the list in question, you may want to omit the Web-only buyers. Your broker should be able to advise you when this is possible.
4. Make sure you're segmenting customers according to the channel in which they ordered, e.g., Web-only, catalog-only and combo buyers. These customers will respond very differently to online and offline promotions.
5. Conduct contact-strategy testing to ascertain the most productive way to market to these customers after you've acquired them.
6. Analyze the future value of customers based on the channel of their initial purchase. For most companies, a one-year period from date of acquisition works best.
7. Establish individual cost- or profit-per-customer benchmarks for each of these segments based on the in future value calculation.