Whether List Rental Income Is Up or Down, Judge Manager on All EffortsObviously, these days many list owners are trying to determine whether their managers are doing their job since list rental income for a high percent of companies is down. So I read David Avrick's article ("List Manager's Job: Maximize Income," DM News, Dec. 3) with interest because it seemed to come from an unbiased opinion -- someone outside list management. I eagerly perused the article for Avrick's definition of maximized income, but he failed to define it.
As president of L90 Direct, I head up a list management division and am often challenged by prospective and existing clients to demonstrate that we maximize revenue. How do you define maximum revenue? Is it turns, revenue per name, productivity per name, tests? That's the big question and one that I think many list owners need help answering.
I agree with much of what Avrick expressed in his article, but I disagree with several key points:
• I don't agree that if you have a large list, the list owner should consider managing it internally. There is a great deal of value in a company that is processing and handling billions of list rental names a year, and this value will be lost internally when the company attempts to focus on an area that is not a core strength.
• I also do not agree that a list owner would be better off with a manager that specializes in a particular category. If the list owner does this, it loses all market penetration in secondary markets. This manager will have little to no exposure in categories other than the core market. This makes it harder to bring in secondary business, which is crucial when the primary category goes bust likes the sweepstakes market did.
• "Your decision should focus on dollars and whether list rental revenue is up or down -- nothing else matters." I am particularly alarmed by this bit of advice, especially since Avrick seems to contradict himself later in the article when he states, "tests are most important," and "total sales are not the manager's job." Don't total sales equate to maximum revenue? So I'm confused, are we responsible for maximum income or not?
• "A good list manager should boast more about three new tests than three new continuations." Again, I disagree. The manager's job is to target mailers with the right selectivity to ensure and improve conversions. Yes, tests matter, but the quality less than the quantity. If test volume is flat and conversions are up, the manager is still on a path of growth. The conversion is actually worth a hell of a lot more than the test. I'd certainly hype those results to my clients.
Our job as a list manager is to maximize revenue -- I do agree with Avrick on this sentiment. But it's also our job to prove that we have done that. There are so many factors to consider, all of which affect the bottom line. I know that I am not alone when I say that suggesting that the manager has only done its job if income is up, especially this year, is a little irresponsible.
Whether your list rental income is up or down, judge your manager on all of its efforts. Does it have a defined strategy? Is the manager aware and responding to what's happening in the market? Is there a clear course for future business that takes into account past performance and results? Building list rental income is like building a business -- it needs a good business plan and first-rate execution.