Maximize Your Overseas List Dollars
Mailing an international campaign is not an inexpensive proposition, but often your in-the-mail costs are higher than they need be.
One way international direct marketers can reduce their mailing costs and get the maximum benefit from their overseas mailings is by working closely with their list broker. To find out what needs to be done, Target Marketing spoke with veteran international direct marketing consultant and list broker May Katz, president of Direct Media International.
“Reducing your list or mailing costs is not about squeezing the front end,” stresses Katz. “It’s how to get the most bang for your buck.”
Here, Katz shares several ways you and your list broker can help maximize your mailing dollars.
Choose response over costs. Cheaper isn’t necessarily better. List selection, says Katz, is about “which lists get the best response, not which lists you can get at the cheapest cost.” For example, a list that costs $400/M but achieves a 5-percent response is better than a list priced at $100/M that only achieves a 1-percent response rate. Says Katz: “The bottom line is your cost per inquiry, or whatever you use to measure profitability.”
Share your cost to mail or your cost per order, lead or inquiry. This is important if you want your broker to negotiate on list rental cost. Says Katz, “You can’t ask for a reduction in rates if you can’t answer why you need a reduced rate. Your broker needs to build a business case for asking the list owner for a reduced rate.” He or she needs to know what you can afford to pay.
Track exchange balances carefully. Exchanges are not free names. If you also rent your list, the cost is lost list-rental revenue. However, an exchange of names can significantly reduce mailing costs and benefit both list owners, if managed properly.
As Katz explains, problems often arise when exchanges are made directly between list owners and their list managers, without including a broker in the process. Your broker generally should be more familiar with your exchange partners’ list or mailing patterns. An exchange may go sour if the mailer with whom you exchange names doesn’t mail as often, has changed its offer, or the names on the file aren’t as fresh. If the list no longer works, you could be left with a large list balance of names that aren’t usable.
Another caveat: Even though the quantity of names exchanged often is even, your list might rent at a higher CPM than the other, resulting in lost list revenue potential.
A broker can track balances for you, keep you updated on your swap partners’ list activity and handle the administrative tasks involved with an exchange to make sure it is a win-win deal for both list owners.
Select with care. International select charges can significantly increase mailing costs. Nearly every list has a $10/M or $15/M country select charge. Additional selects, such as address type or job titles, can add another $25/M to $30/M to your list order, Katz points out. “These selects can be important if you have a large list and you want to test specific segments,” she notes, but adds that they are not always practical if the list is small to begin with—as often is the case. Remember, international list universes generally are much smaller than domestic lists and often can’t support selections that are standard on your U.S. lists.
“Mailers often order international lists the way they do domestic lists, and sometimes fine-tune the list to the point where they become impractical to use,” Katz points out. “Processing small lists can become very expensive, when you take into account minimum processing charges by your merge/ purge house, which often can add another $75/M to $100/M to the cost of a small list.”
Another way mailers waste precious list dollars: over-segmentation. For example, says Katz, a mailer may decide to test household vs. business addresses or European vs. U.K.-only addresses, for which there are select charges. “Often, you can tell after one or two mailings if mailing to the household address or business address will have an impact on response, but many mailers continue to split and pay selection charges long after the data tells you there is no difference,” says Katz. She recommends mailers put the list back together to avoid paying select charges if they continually mail both list segments. “If you’re mailing a large multinational list, this can really add up.”