List Professionals Foresee Decline of Hotlines Before Recovery
These predictions result from the plunge in response rates and canceled or postponed mailings because of the Sept. 11 terrorist attacks on the United States.
"I think all mail-order companies, whether they're selling merchandise, subscriptions or conferences, will experience some attrition," said Andy Ostroy, chairman/CEO of ALC of New York LLC. "You had two weeks where people were either glued to the TV or glued to their stock portfolios and probably not doing a heck of a lot of spending."
For many mailers, September represents the start of peak mailing season. One list professional estimated that as much as 25 percent of many marketers' budgets is used at that time of year.
"I think that many marketers try to mail so that mail hits the week or so after Labor Day," said Roy Schwedelson, CEO of Worldata/WebConnect, Boca Raton, FL. "The second week of September is usually the week that response starts coming in. The response obviously is going to be tremendously off."
Many list managers said that clients' response rates were affected greatly in the week following the attacks.
"Mailers were off anywhere from 20 to 40 percent following Sept. 11," said Jim Long, director of list management at Millard Group Inc., Peterborough, NH. "My guess is that September hotlines will be down for a number of reasons -- either they mailed right when it was happening or they postponed or canceled mailings."
Ostroy estimated that September hotlines would be down about 25 percent.
Though most files likely will be affected in their September counts, certain types of files may be hit harder. Long and Schwedelson cited consumer travel-related files as a prime example.
Files that are wholly or partly generated through telemarketing probably also will be deeply affected.
"Think of the fact that telemarketing is out the window," Schwedelson said.
Long noted that many names on publishing files are generated through telemarketing.
Another list professional said 2001 was already a tough year for many list files.
"The year has been generally bad for counts," said Leland Kroll, president of Kroll Direct Marketing, Plainsboro, NJ.
Even so, mailers have no choice but to forge ahead with holiday mailings in this crucial time of the year and will have to adjust mail plans accordingly.
"Mailers may have to go back and not be so hotline-oriented and either reuse names or go back further on a file," Kroll said.
In addition, mailers may have to go back to some files that were cut from mail plans because of the softness of the economy before the attacks.
"A lot of people had already cut back, anyway; they have no room to cut anymore. They've got to hit a certain circulation level," Ostroy said. "Some lists that missed the boat on the original mail plan may make it back in. If you lose quantity on your core files, then you sort of back your way into the marginal ones if you need the volume."
Consumer response to holiday mailings will help rebuild list files to what they should be, list professionals said.
"People will buy for the holidays," Schwedelson said.
However, though consumers will buy gifts for others, he said, they may make fewer purchases for themselves.
Kroll said many companies do a lot of spending in the fourth quarter to spend leftover budgets, which will help boost business-to-business files.
So, despite the challenges, the general feeling in the list industry is that recovery won't be too far away.
"I always try to be a little optimistic and think that we as Americans are not going to sit back and do nothing for long," said Long. "We will see mailers and consumers get back on track."