What will be the list industry's most difficult challenge in 20
are being repeatedly over-mailed by the same [mailers] due to an over-reliance on list exchanging as well the proliferation of co-op databases.
Mailers need to get back to basics. Testing has to become more diverse and more creative. The playing field has to be leveled in terms of assigning a cost to an exchange list. Only then can all lists be analyzed properly.
Ralph Drybrough, CEO, MeritDirect
Clearly, one of our biggest challenges is being precipitated by the double-digit postal rate increase in 2006.
This rate increase has many of our clients ramping up in 2005 to get some of that 'low-hanging fruit' before the tree grows higher in 2006. It's a prospecting mania we typically see before predictable large increases in mail costs. So why should this be looked at as a 'challenge' for the list industry when the more our clients mail, the more we earn? Here's why:
1. We're coming off two years during which new customer prospect mailing has been at its lowest ebb in over a decade. This has driven typical response list hotline counts down by 10 percent to 20 percent and by as much as half in some cases.
2. Some list owners have become more conservative in their list rental policies toward mailers who are marginally or potentially competitive. This protective stance, common when list owners are mailing their housefiles more aggressively, leads to fewer new list test opportunities.
3. Since new list testing has been soft the past few years, mailers have seen proven continuation list inventories shrink, thus reducing the size of their low-risk core prospecting arsenals.
4. The number of new response lists coming onto the market is negligible.
These conditions have created the 'perfect storm' of a greatly reduced list universe.
Not only that, ramping up prospecting for the mailer with an atrophied core continuation inventory introduces a greater element of risk. This is because a larger percentage of the prospecting increase must come from risk-prone, new list tests rather than from deeper mailing into safer, core continuation lists.