DM News' Essential Guide to Lists and Database Marketing: Lists: Purchase or Rent?

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Many lists have an option of purchasing for endless use or renting for one-time use. There are pros and cons to each. Here are the primary ones to consider:


· You don't own a rented list.


· You didn't produce it.


· You can't use it over and over without paying over and over.


· You are dependent on a third party's external sources for the accuracy of the information within the list.


· Information is limited unless you purchase more add-on components to the list. Additional information may not be available.


Multiple use/purchase. A purchase agreement allows you to do whatever you like with the data other than sell it. Many multiple-use agreements also are purchase agreements. "Multiple use" means that the client can use the list many times.


In most instances, this means you can use the list as often as you wish, ad infinitum. Some suppliers add a rider to multiple use, e.g., multiple use for a period of up to one year or multiple use for up to X number of uses.


Lists sold for multiple use with these riders often are described as being sold on multiple-use rental. Most telemarketing lists are available for multiple use; some are available for multiple use because policing a list for single use for telemarketing is difficult to achieve. For inclusion in a database, data must be bought on a multiple use or outright purchase basis. Multiple use or outright purchase is the most expensive option for buying a list.


Single use/rental. Rental means that you have no rights to the data you have purchased. Generally, the term applies to buying the data for use over a stated time period and may include single or multiple use during the period of the agreement. Single-use agreements are almost exclusively rental agreements.


"Single use" means that the list can be used once only by you. Normally, this is a usage applicable to mailing lists; however, with care, it can be used for telemarketing lists.


In many instances of single-use list sales, for security reasons the supplier will not allow the list to go directly to the client. The list is only released to a third-party agency on the condition that the client never gets to see the original data. Other suppliers are more trusting of their clients and will provide a single-use list directly to you.


The major benefit to you of single use is cost. It is the cheapest way of using a list. The major drawback is that you only get to keep the responses to the mailing or telephone campaign; you can't keep or reuse the original data.


The conditions around single use can get hazy when it comes to telemarketing. At what point is a record classified as having been used? Is it when the researcher gets a questionnaire completed, or is a record used as soon as the first dialing has been made, irrespective of the outcome (what if the result is the engaged tone)?


As you see, the situation is open to interpretation. Most single-use lists bought on magnetic media require that the tape/disc is returned within a specified time period. The supplier often charges a refundable deposit on the tape/disc to encourage this. Sometimes, you are contractually obliged to return the tape within a specified time frame or risk incurring a penalty. This is a technique designed to limit the abuse of data under the single-use agreement.


Note that no list supplier will allow you to resell or sell his list without first making some special arrangement with the list owner. Such agreements are rare.


Things to know before renting a mailing list. The difference between an effective or ineffective list could be the list broker. However, a broker by any other name is still a middleman. If you are an entrepreneurial company and can't find a list broker specializing in what you want, you may have to undertake some of the list research yourself, independent of the broker. Here are some things you need to know about buying or renting lists, researching list sources or working with list brokers:


· Trade publications, newsletter publishers and membership organizations have lists. They also do a pretty good job of updating and cleaning lists as their base changes. These organizations will communicate information related to their own list management and availability.


· Nothing is as comprehensive a source in the list business as the SRDS Direct Marketing List Source. This directory describes every list available in the commercial marketplace and is a great place to start your list research. This research will provide you information for further discussion with your own list broker.


· List owners use fake names and addresses in a list to track your usage. Make sure you know whether you are purchasing or renting the list and what the terms of usage are.


· Lists with contact names cost more than lists that only have generic titles, e.g., director of marketing, technical director and human resources manager.


· A very inexpensive list is a red flag, warning of possible poor quality or outdated names.


· Some of your purchased list names will be undeliverable. This factor should be considered when negotiating with your list vendor.


Customers should be targeted according to their needs and wants, their interests, how and where they buy, their financial means and general family and community status. This translates into characteristics/demographics that define your target market and eventually become the basis for your list specifications. The overall objective, of course, is to formulate a set of specifications that define those most interested in purchasing your product or responding to your offer. These objectives and resulting specifications should be shared with your list vendor or list broker.


List quality. With the quality of a list being of paramount importance to a campaign, the following information is best discussed with your list supplier to ensure your objectives of highest quality or best use when developing your own target list:


· Dig deep to find out where the names on your list come from. Did they result from an actual purchase of a product or service? If so, what type of product, and how similar was that product or service to yours?


· Did the names result from a response requesting more information or a visit to a Web site?


· Did some of the names come from uninterested prospects who just wanted the free offer?


· Who else has purchased and used the list? Was a portion of the list used for a test or was the full list used in an entire campaign?


· Was the list generated from mail responses? If so, this is a strong indicator that these prospects will buy from a mail offer again.


If your list broker or list vendor says that much of this information is unavailable, it means they have not dug deep enough to ensure the quality of the list. If this is the case, you may want to consider changing to a broker who has this quality assurance information.


Once you find a list that works, stick with it. Your list broker can inform you of updates to it. If the first list pulled in responses, chances are good that new, updated names from the same place and of the same type will pull a similar response.


Precision is a key advantage of direct mail. It is the precise selection of a list along with precise definition of segmentation criteria. Still, many small businesses and organizations forgo this precision. They purchase a list and blast-mail to it before any study, manipulation, sorts or modifications. Sorting and segmenting will optimize, economize and produce better results.


Many list purchasers buy lists that can't be corrected, sorted or segmented. Know if this option is available before your list purchase is made.


For a complete PDF of DM News' Essential Guide to Lists, Database Marketing & Data Services click below:


http://www.dmnews.com/pdffiles/listguide.pdf


This article is excerpted with permission from Al Lautenslager, "Ultimate Guide to Direct Marketing," copyright 2005 by Entrepreneur Media Inc. All rights reserved. Reproduced with permission of Enterpreneur Media Inc.


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