List Brokerage Launches Small Business Modeling Program

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A lack of response files for targeting the more than 22 million small businesses in the United States has prompted list brokerage and data services firm LDS Group Inc., New York, to create a modeling program aimed at reaching these prospects.

The program, which officially launches today, is called Business Model Selector and was developed by Jeff Kobil and Richard Vergara , co-founders and CEOs of LDS, through a partnership with data and analytics firm Intellidyn.

According to the U.S. Small Business Administration, a small business is defined as having fewer than 500 employees and these businesses represent more than 99 percent of all employers. These statistics make the small business market very attractive to mailers but -- at the same time -- it is often hard to reach.

"The difficulty in effectively targeting small businesses is finding a good list approach beyond compiled," Kobil said. "There aren't a lot of response files out there to reach the market."

Kobil cited Fortune Magazine Small Business file, Business Week Small Business File, Inc Magazine Small Business File, American City Business Journals and Crains Regional Business Magazines as some examples of response files available but stressed that each was well under a million names and several hovered at around 100,000 names.

"We're not saying that the model is going to replace your best lists," Kobil said, but he added that at a time when everybody is crying about there being no new lists out there, it is a new source of getting more qualified names.

To build a Business Model Selector model for a mailer, the client must provide its response data to LDS and Intellidyn. The model is built based on that data and a score is created. Then, the model is bumped up against data sources such as Acxiom, Experian, Trans Union, First Data and infoUSA, among others to find the best selections. Intellidyn has licensing agreements with all of the data providers used in the process.

Though the program targets small businesses, it isn't just for business-to-business offers.

"What we think is that across all these files such as Acxiom and Experian and infoUSA what makes us unique is being able to look at business and consumer information as well," Kobil said. "We are looking to find new mailable universes for clients on the business-to-business and business-to-consumer sides. We think that looking at both sides is key."

The program is also a response to a need in the industry, according to LDS.

"I think the norm in the business world is that there aren't a lot of models being built and one of the reasons we put this together is that we felt there was a void there," Vergara said. "A lot of companies in the consumer marketplace rely on models."

As for pricing, LDS will not charge mailers for the model but will require a name volume commitment. They declined giving specifics. Though they would not name any clients using the modeling program, LDS specializes in clients in the publishing, entertainment, fundraising/nonprofit and catalog markets.

"We think that the market for this is anyone who is targeting the small business owner such as banks, credit cards, publishers, BTB catalogs and BTC mailers," Kobil said.


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