Alternative Markets Boost Revenues

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There is an ongoing challenge for today's list management companies: increasing list rental income while satisfying list owners' needs to exchange in traditional and fringe markets.


With exchanges becoming more and more commonplace, and mailers using more and more co-op and database products to supplement their mail plans, list managers have to think outside the box to keep generating a higher level of rental income in addition to increasing exchange leverage.


What's happening? Catalog mailers and list owners want to exchange more. Upscale apparel mailers want to exchange not only with their competition but with gift, publication and general merchandise mailers as well. Even your low-end mailers want to exchange - all with the same goal in mind: to cut expenses. What is a list manager to do if all these catalogers are exchanging with one another? There are options. List managers must look for ways to stimulate interest in their lists from mailers that traditionally would not use them. They must look at the alternative markets.


An alternative market is any mailer category that is not typically renting lists that fall into your list owners' market category. This may include, but is not limited to, fundraisers, publishers, personal care, children's, food, travel, sweepstakes, credit card, retail and more. These mailers have the potential to produce a strong revenue stream - getting them to test your file is the challenge.


How do you go about doing this? The easiest way to entice an out-of-category mailer to test your file is to offer it an appropriate select. Sometimes, something as simple as a gender select, holiday select or product select can open a whole new market of mailers willing to take a first or even second look at your file. Did you know that scuba divers wear women's hosiery to help their gear fit better? It's true. Creative thinking can help stimulate sales in nontraditional markets.


Another way to open up alternative markets is by appending enhancements. Your file will need to be somewhat large (250,000-plus 12-month mail-order buyers) and it should be updated/re-enhanced on a regular basis (every three months or more frequently is optimal).


Many companies that significantly increase rental revenue from nontraditional audiences offer enhancements identifying adult age, income and presence of children, along with age and gender, dwelling types, pet ownership, lifestyle selects and more. Many companies can provide this type of information; some will charge royalties when using names for list rental purposes, and others can arrange a data swap. Check into these options and evaluate their cost-effectiveness. Also, remember that not all data providers offer the same information with respect to selects and quality sourcing, so do your homework carefully. In the end, you'll generate more income from alternative markets and learn a lot more about your customers.


Be open to incentives. Many alternative markets, especially food, fundraising and publishing mailers, need special pricing to test an out-of-category list. Some need selects included within the special price, while others do not. Ask your manager to do a competitive pricing analysis to see what other lists similar to yours are charging - and offer a similar discount. You'll be pleasantly surprised to discover how much revenue can increase once you are competitively priced.


Other mailers, such as credit card mailers, need very low net name agreements because of the size of their mailings and the nature of their business. Managers and list owners need to understand their needs, then weigh the benefits of supplemental revenue vs. the lower net income per name. In many cases, since these mailers' offers are not normally seen by our customers, the responsiveness of your file can be very encouraging to these nontraditional mailers. If you are concerned how the increase in nontraditional markets could affect the response of your house file for you or traditional users, the impact has been found to be minimal to nonexistent.


List managers also should keep their eyes open to new and emerging marketplaces. A few years ago, there was a boom in credit card mailers, while more recently personal care mailers and travel/vacation offers have become more and more prevalent.


Today there are the dot-com mailers. More and more "webalogs" (catalogs that had their start with a Web site) are looking to rent catalog names to help direct traffic to their sites. Managers need to be aware of them and must use aggressive sales efforts to show how their lists can help them generate customers. It can be something as simple as demographics, or an enhancement that identifies computer ownership or offering Internet buyers at postal address.
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