Nine Reasons Your Lists Aren't Working
By Steve Trollinger
Nine reasons your lists are not working.
Arsenio Hall enjoyed waxing poetic about "things that make you go 'hmmm.'" Well, I recently found myself thinking about something that makes catalogers go 'hmmm': Why don't prospect lists work better?
To really understand the answers you must understand the question. What does "work" mean? It means a list meets or exceeds the requirements for customer acquisition efforts or the established cost to acquire a customer.
Today, a tight economy has taken its toll on 12-month buyer files, and prospects are swarmed with catalogs. Marketers now must be smarter and work harder to acquire new customers. So the question remains, why don't lists work? And what do we do about it?
Reason #1: They're Tired
Mailing the same list and select campaign after campaign leads to an obvious problem: As you cherry pick the file for the most responsive names, fewer good names remain. List fatigue is a big problem for catalogers in specialized markets that have small prospecting universes to begin with. The key is to spot fatigue and rest a file.
Hold off on mailing a list for a year or two so the mailer has time to regenerate a new crop of buyers who may be receptive to your offer—and ultimately make the list successful for you again.
#2: Your Timing Is Off
Successful catalogers learn how to exploit prospecting opportunities year round. But it's possible that some lists will work only at certain times of the year.
If you specialize in products sold to schools, you'll get a higher response on prospect lists just prior to or right after the start of the school year than, say, in the middle of summer. During your best season(s) you should be able to prospect to a much wider variety of files, but during your slower seasons you should focus on proven off-season winners. A couple of options for improving performance: Know your best season and test new lists then. Test a timing select on lists that you mail in your off-season.
#3: You're Paying Too Much
To get the best results out of a list, you might need to apply selects to get prospects that look like your target customer (more on this later). The problem with adding selects is they can get expensive. If lists costs get too high, the response rate needed to make a list a winner can become unattainable, so if you did get what should be considered a "good" response you'd still fall short of success.
If I own a list of my own though, I may be able to work out an exchange at a lower cost. Beyond exchanges, find a list broker skilled at negotiating net name arrangements and getting select fees waived—especially for new tests.
#4: There's No Future
Sometimes lists work in a test but won't win because there aren't enough names in the universe you're selecting from to make future use of larger quantities possible. The result is that you take all the names you can get and typically experience fatigue sooner. The moral is that catalogers should be aware of the potential rollout when testing and selecting new files for prospecting. If the counts aren't there, the list may have trouble being a long-term winner.
#5: You Don't Know Your Customers
Often lists don't work because catalogers select files representative of the customers they'd like to have and not the customers they actually have. Knowing whom your best customers are and selecting files that reflect those characteristics is critical. Not knowing your customers can kill list success.
#6: You're Too Picky
List selects—e.g., recency, average amount, gender—are great for pinpointing prospects who would appear to be most responsive to your offer. But being too picky, or not picky enough, can limit the success of lists over time.
Selects can get expensive, so using them wisely is important. Apply too many selects and you cut the available universe and limit roll-out potential, but too few selects can yield names that won't respond and never would.
Test many selects to feel confident that the prospect target matches your customer profile without limiting potential rollout and driving select fees up.
#7: You're Playing Favorites
How you rank files in the merge/purge process can play a huge role in a list's performance. Consider the example of a cataloger that uses names from a cooperative database as well as lists acquired through its brokerage partner directly from list owners. If the cataloger ranks the co-op higher than the names from the title-specific lists, the co-op names will win out in the merge. The result is that the co-op names appear to perform much better in a comparison. Not only are these names modeled, but these "better" prospects are now purged from another title, leaving the title with "weaker" names overall. Sidestep this pitfall by ranking all outside lists equally or "random" in the merge so that each list has just as much of a chance to keep the name as the next.
#8: You're Looking for Bears in the Desert
Maybe the reason your lists aren't working is because you're looking for mail-order buyers on lists that aren't composed of mail-order buyers. In some applications it's difficult to find lists of known mail-order buyers, but catalogers should always try to find them if possible. The key is to go after the buyers first and move down from there.
#9: They Just Aren't Who They Used to Be
Imagine if Wolferman's English Muffins changed the direction of its business and became Wolferman's German Schnitzels. It seems only logical that the profile of its "typical" customer would change too, right?
Pay attention to what the catalogers whose lists you use are doing with their businesses. Are they changing their merchandise mix or price points? Are they going in a new direction with their creative? Are they changing the way they use offers to drive orders? Did they build the file with a sale book? How a catalog manages its business will affect the kind of clientele it attracts. A list that used to pull may stop working.
Creative and Merchandise Implications
Sometimes a list is perfect for the business you're trying to be in, but poor creative execution or an ill-chosen merchandise mix is keeping people away. As time goes on and creative improves and/or merchandising steps up, go back to those marginal lists that you've mailed before and re-test them. Don't assume a list that doesn't work once will never work at all.
Steve Trollinger is vice president of client marketing, J. Schmid & Associates. He can be reached at (913) 236-8988 or via e-mail at firstname.lastname@example.org.