Federal Cardholders Ready to Buy

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List owner Mark Amtower likes to tell the story of a business-to-business broker who used to advise clients to steer clear of the government. By doing so today, direct marketers miss out on a universe of 20 million people whose purchases generate one-fourth of the nation's gross national product. The federal government alone generates 7 percent of the GNP.


Five years ago, Vice President Al Gore declared, "Federal managers can buy 90 percent of what they need from mail-order discounters.'' Steady growth in the use of government-issued credit cards is making it easier for BTB direct marketers to reach Uncle Sam. From 13,000 small-purchase credit-cardholders making $9 million in purchases 10 years ago, 300,000 cardholders are expected to purchase $8 billion for the government this fiscal year. Most cardholders have a per-transaction limit of $2,500 and per-year limit of $20,000, but those ceilings are expected to rise as the government allows more micropurchases. Certain cardholders have limits in the six- and seven-figure range.


"The vast majority of BTB marketers are still leery at best of government business because previously it involved one-sided contracts,'' Amtower said. "On an open market basis, the government represents some low-hanging fruit for everybody.''


BTB marketers can reach that fruit through Amtower's federal government credit-card buyers file and small business government contractors files, both managed by Direct Media, Greenwich, CT. DMI has managed the card buyers file for more than a year, while the contractors file came on the market in July. The card buyers file consists of 70,090 card holders, 85 percent who made purchases over the telephone, with 19 agency selects. Each record identifies buyer name, agency, operating division within the agency and government mailing address. The small business file includes 117,975 businesses that have registered with various federal agencies.


For first-time government mailers, DMI list manager Christine Greco recommends the credit card buyers file.


Dealing with the government helps taxpayers as well as marketers. Each credit-card based transaction saves the federal government at least $54 in procurement processing labor charges, which based on the 11 million such transactions that occurred in fiscal 1997, ends up saving more than $500 million a year.


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