Boost Income in Face of Competition

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Increasing list rental income is a greater challenge today than it was even five years ago. Costs for postage and printing continue to escalate while the Internet and other interactive media are negatively affecting mail plans for many mailers.


Now, more than ever, list owners should maximize their list rental marketing and sales efforts. Smart positioning, competitive pricing, your own mailing activity, frequent updates, choosing the right list company, database thinking, aggressive sales, in-depth research, competitive analysis and accurate reporting are all required for success. But the rewards are plentiful, and the funding of new marketing activities promises a larger customer base and a healthier bottom line.


Look inward. Most list owners aren't sure if their lists are reaching their maximum revenue potential. On the other hand, most have a real sense for underperformance. If your list is being handled outside, there are signs to watch for. Before passing judgment, look at related factors. Is mailing down overall in your industry? Have selected large mailers cut back? What has your own mailing activity been? If frequency is down and hotlines have decreased, it could be affecting orders for your list. Are you using an agency to acquire subscribers? It could affect responsiveness and mailers will stop using your file. What about competition? Has another list come out that's more attractive to mailers? What about your list's CPM? Is it competitive?


Select the right list company. Make sure the list company you choose is not too big and not too small. Of course, this is relative, but you want to be sure your list gets the attention it deserves. A list company too big for your file will tend to book the same old mailers. They will run one ad and wait for the phone to ring. If the list company is too small, you will see few ads and promotions for your list. A small staff will tend to be overloaded and miss opportunities to increase business. Cash flow also can be difficult with smaller list companies and it can show itself in delayed reports or royalties, which will reduce your income for a given period.


Look at what you're paying in commission. Don't be wooed by an aggressive list company that promises to save you money in commissions. If it's too low, say 7 percent, you may be paying for it in reduced income or shared advertising expense. In most cases, the lowest you should pay is 10 percent. This provides the right level of income for the list company to cover staffing, administrative, sales and advertising costs to promote and sell your file. If possible, the commission should be performance based to provide extra incentive for the list company to increase income.


Select a list company that understands database marketing. The very thing that makes your list attractive to some is what makes it unattractive to others. If your list is a Parents' file, for instance, it's likely that mailers who are looking for computer owners won't be ordering. But the truth is, the right list company can show you how to research your house file and identify, for example, "at home computer owners" either through your own data or overlaid data. They can show you how to recast your list as such and attract computer mailers to your file. Sometimes things as simple as "age of child" properly promoted will increase use.


Select a list company that has large sales and marketing resources. To increase your income, you need a list company that thinks outside the box. A list company that sells other media -- such as online, inserts, print media or card packs -- will produce more prospects than a list company with only list contacts. A strong sales effort for your list also should include attendance at trade shows, one-on-one meetings with brokers and group presentations to brokers. There should be a research department that feeds the sales process by subscribing to every magazine or directory in your category.


The advertising and promotional plan should include ads in direct marketing trade press. There should be an extensive promotional program, including fax broadcasts, direct mail and e-mail to both brokers and mailers. A PR plan should assure that your list gets visibility in all "New List" articles and on Internet sites serving the DM industry.


Select a list company that supplies accurate reports of both sales and dollars. You should receive reports of sales calls so you can see the actual sales activity on your list. The royalty reports should tell you when the list company was paid to assure that money isn't being held to pay for its own business. Prompt payment of royalties is just as important as sales. If possible, your list management company should give you recommendations on how to spend your royalties on media and/or lists that will continue to expand your customer base profitably.


Bette Anne Keane is vice president of list management at VentureDirect Worldwide, New York.
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