Negotiate a Win Win Win
Prospect databases have become quite popular in the last couple of years. They’re changing the way customer acquisition is done, increasing response rates and reducing acquisition costs. The trick is to negotiate a deal that benefits not only you, the mailer, but also the list owners and brokers involved in the build.
A New Direction in Acquisition
The traditional direct marketing acquisition process involves renting lists for a single use. A typical marketer will rent 50 to 300 different lists. These rented names are merge/purged together with the marketer’s housefile, deduped and prepared for a single mailing. The mailer may use the list to test two or more different offers. After the mailing is sent out, responses come in over a period of a few weeks. The mailer is allowed to keep only the data from the responders. It has to erase all the other rented names from its computer, since they’re only rented for a single use.
What the mailer learns from this mailing process: which offers work best and which lists work best. As a result, next month it will order more of the lists that work, and drop those that don’t perform as well. The mailer then can improve its offer to further improve response.
What the mailer does not learn from this process is what type of person responds to its promotion. It doesn’t get statistically accurate data about the type of person who is responding or not responding to its offer. This information—that it does not get—could be the most important data in deciding who to target in a direct mail acquisition program.
Prospect databases radically change this process. The mailer creates a prospect database with names generally rented for an entire year. It may mail the names as often as it wants, and only pay a royalty for each use.