The mix: combining response and compiled files in a DM Plan
Over the years I have heard this refrain often, maybe too often:
"I don't use compiled lists because they don't work. I just use response lists."
The time has come to offer some insight into striking a balance between response and compiled lists in a direct mail plan. OK, maybe not a true balance as in 50/50, but a realistic ration of compiled and response names.
The response files included in a marketing plan are there for obvious reasons. They are by nature names of individuals who have responded to a previous offer, perhaps even purchased a product.
The feeling is that a particular response is a huge step in establishing a synergy to a mailer's particular offer. When you examine the recency, frequency and unit of sale, you come away with a list that should work well for a similar offer.
For example, a book buyer of a related topic may be a good candidate to attend a conference or subscribe to a magazine.
The higher cost of rental of a response lists is certainly feasible (in most cases). After all, the demographics and buying behavior of a response-generated name are more likely to respond to a related offer.
What happens when we introduce a compiled list into the mix?
The compiled file is by nature not confirmed as a response-generated list of names. While there is no way to gauge response, there is also no way to gauge that these are not individuals responsive to direct marketing offers.
Let's now take a look at the demographics of a compiled file compared to that of a response file.
Very often a response file does not have additional demographics (age, income, job title, company size) available as selections on that list. So you may be depending solely upon the "response" nature of that list.
Compiled lists will most often have a healthy depth of demographic selections available.
For example, a compiled list of human resource managers may also have a company size select that allows a mailer to refine the target market to larger companies who are more inclined to buy a specific HR-related product.
Again, an SIC code may allow for further refinement to select business types that are more inclined historically to buy this HR-related product. This type of scenario holds true in business and consumer markets.
In addition, consumer market compiled lists also allow for direct marketing response overlays that do indeed confirm a consumer as a DM responder/buyer.
Add to that the fact that business and consumer compiled lists allow for saturation of a specific geographic market as well as some specific niche markets. Now consider that compiled lists are often half the cost of a response lists.
So it may be time to take a look at your DM plan and consider where compiled lists might fit. The combination of demographic selects, overlaid response data, market saturation and lower cost make compiled lists an attractive buy and worth a test.