DM News Views: 'Compiled Lists Are Worthless'
I hear it only from list brokers, never from the customers using compiled lists. List brokers have been saying that "response and circulation lists" are better than compiled lists.
An average response list sells for $150 per thousand. The average circulation list sells for about $120 to $150 per thousand. Brokers claim that the "compiled lists" like those from infoUSA should sell for about $60 per thousand.
I say baloney. Response and circulation lists are fine lists, but they have an inherent lack. They do not have selection criteria such as SIC codes, demographics, employee size, credit ratings, age and income.
Agreed, 33 years ago, an average compiled list came from white pages and yellow pages with no added information. I don't think that anybody sells such lists anymore. Over the years, infoUSA has changed the makeup of the so-called compiled list. We spend more than $40 million yearly in compiling additional information on businesses such as employee size, sales volume, names of the key executives and titles, SIC codes, yellow page ad spending, number of PCs, square footage of space, etc.
On the consumer list, we have a lot more value than the phone book information such as age, income, home value and ethnicity.
Even circulation and response lists append infoUSA's additional information to their database. By having our information, they can offer better selectivity to customers. In many cases, the infoUSA database is the standard, which adds value to all of the other databases.
Is it really true that "compiled lists are worthless"? I strongly disagree.
Our average customer, who used to buy 10,000 names 20 years ago, now can narrow his search by using various criteria and find the right 500 names. This is what I call the 500 nuggets. They are worth gold to the customer.
If the same customer paid $80 per thousand 20 years ago for 5,000 names, he is now willing to pay $1 per name for those 500 names. Should we be charging $80 per thousand for those names?
Our average customers today pay $120 per thousand for business lists. They believe they are getting a tremendous value for their money. After all, postage rates have risen in 30 years from 8 cents per name to 37 cents per name.
Unfortunately, the list brokerage industry has not seen the light. One of the list brokers wrote to me and bragged that he bought our lists at $18 per thousand and then marked it up 400 percent. InfoUSA lists are the most profitable part of their business.
By selling circulation or response lists, a list broker gets only 20 percent.
I believe that our lists are not worthless. They are as valuable as a "response or circulation list." We don't have to give more than a 20 percent discount to list brokers. If we do, we cannot survive. In many cases, list resellers sell infoUSA lists at higher prices than the infoUSA list price.
For a compiler like infoUSA, databases are our main business. We live and breathe daily compilation enhancement and distribution of our database. If we don't charge a value price, especially when the customer is buying fewer names, we cannot survive. The list brokers don't understand that. They are used to getting our high-quality database, marking it up 400 percent and walking away with all the money. They have no investment and none of the headaches of compiling a database.
In essence, the infoUSA database is not a worthless compiled database. It is a database full of valuable nuggets that are being sold at a bargain price. Our 4 million customers will attest to that.