Recharge Your Acquisition Strategy
A list that pulled strongly in the past may gradually grow less responsive. This behavior could be because of list fatigue or simply a changing demographic mix within the list.
So how do you identify fresh data sources with the goal of increasing or maintaining your expected response rates? It takes a little resourcefulness and a willingness to apply analytical techniques. Let me share a few ideas with you.
Ask your list broker to keep you updated on lists that are new to the market. List brokers have easier access to this information, but that does not excuse you from researching new data sources on your own.
For example, you might be reading the newspaper and notice a noncompetitive new product or service that is positioned to reach an audience similar to yours. This organization's house file, if available, would be an excellent list to test.
As a reader of DM News, scan the Lists & Databases and E-Mail Lists sections each week. If a list appears to have potential, contact your list broker for more information. It will let you tap a fresh data source before your competition.
Work with your list broker to identify non-traditional list sources. Not every company is eager to generate revenue from selling their customer lists, but they may be open to a trade. Typically, you would trade one name for one name, but the two parties can negotiate any mutually beneficial arrangement. You benefit by acquiring fresh names at no cost, though you should be willing to compensate your list broker for his involvement in the process.
Another strategy for bolstering your list performance is incorporating a statistical technique called Chi-squared Automatic Interaction Detector. Direct marketers benefit because it determines which demographic groups have the highest potential response rate. This information can be used to maximize the response to future mailings.
To run a CHAID analysis, the mail file must be enhanced with demographic variables. If your file lacks this information, your list broker can help determine the mix of demographics/psychographics to overlay. CHAID then takes your enhanced file and, using chi-square statistics, constructs a model to identify your best customers.
The output from this process is a tree diagram. This descriptive chart shows how your mail file is broken down into statistically significant segments. Each segment is defined by a unique set of criteria. For example, the tree may identify your most responsive demographic to be women, ages 37-52, income $50K+ with children living at home.
CHAID also can output a gains chart. This report converts the tree diagram into a spreadsheet format. The resulting report breaks the tree's segments into percentiles. You can then decide how deep into a file you want to mail. You might base the decision on the number of prospects you want, the desired response rate you want to achieve or the proportion of all potential responders you want to reach.
By incorporating a bit of resourcefulness with analytics, your customer acquisition campaigns will keep pumping in new prospects and buyers.