There are perhaps millions of companies that use mailing lists, but — according to SRDS — only 754 list brokerage companies. Yet brokers, not mailers, place 80 percent of list orders.
I'm a list broker. Every time I make a recommendation to a client, I have a potential universe of 30,000 lists to choose from — including yours. Here are eight offers you can make to get more list brokers to recommend more of your lists for more tests, more often:
Free test: If you think your list will do well with a particular mailing, offer a 5,000-name test for free. The potential revenue of the roll-out far exceeds the modest cost of giving away a few thousand names. Such an offer catches the broker's attention and shows that you are interested in helping users get results rather than making a quick buck with numerous small one-shot tests.
Guarantee: If you don't want to offer a free test, offer a guarantee of performance. If the list isn't profitable for a proven direct mail piece, there's no charge, or the mailer can test another 5,000 names from one of your other list properties. This strategy works when selling to brokers who shy away from free tests because it costs them a 5,000-name commission.
Net-net deal: Help brokers reduce their clients' list rental costs. In a net-net arrangement, your list is merged/purged with other lists the mailer is testing. The mailer pays only for unduplicated names from your list. Depending on the level of duplication, this can make it anywhere from 10 percent to 50 percent cheaper to use your list.
Discounted run charges: Run charges for lists typically are $5 to $10 per thousand. A broker who is on the border about your list may be swayed if you offer to cut or even eliminate run charges for a test. The lower the cost-per-thousand, the better the chance of reaching or beating break-even on the test.
Exclusives: To build closer relationships with key brokers, offer them an exclusive. A broker whose client sells Windows NT applications might be interested in your list of corporate data-center managers. By offering them a selection of companies that have NT installed — something that is not listed on the data card for this file — you increase the odds that the list will pay off for them. Or you can offer is a first. When a list is updated, or new hotline names become available, call your favorite broker, let them know and give them first crack at these fresh names.
Variable pricing A software company promoting a $250 program can afford a higher cost-per-thousand than a publisher selling a $19 book. Perhaps it's time that list owners start offering tiered pricing based on the break-even economics of the particular mailing. This is a radical idea for mailing lists. But space reps already have adopted this pricing model. Many publications, for example, have one rate for corporate advertisers and lower rates for retail and mail-order advertisers. Why not price your list based at least partially on the mailer's ability to make a test pay off.
In fact, the list industry has been taking small steps in this direction for years, offering reduced rates for fundraising mailings. Adding tiers to pricing can help price list rentals more realistically, so broader ranges of mailers have a chance to mail the list at a profit.
Better product: Use NCOA processing to keep your list clean. Increase selects with demographic overlays. The better the quality and selectivity of the list, the more likely brokers are to recommend it to their mailers.
Superior knowledge: The more a broker knows about the market a given mailing list reaches, the better able he or she is to make an intelligent decision about whether to recommend the list for a test. List owners and managers often boast about how many well-known direct marketers have tested their lists, but the list broker is much more interested in continuations. What percentage of those who tested the list rolled out? Seventy percent or higher is impressive.
Another big selling point is for me to learn that someone with a product and offer similar to my client's tested the list and rolled out. That means the odds are good that the list will work for my client's mail campaign.
Don't bother trying to sway brokers with fancy brochures and elaborate mailers. Brokers primarily just want to see a data card. It's the information — not the format — that makes or breaks a list promotion.
As a rule, the more data on the data card, the better. Write a clear, descriptive profile of who is on the list and the type of buyers they are. Include such useful information as size of average order, availability of hotline names, whether the prospects are buyers or inquirers, when the list was last updated and how the names were generated: direct mail, retail, catalog, credit card, sweepstakes, telemarketing or the Internet.
But don't send brokers stacks of data cards that haven't been well targeted to the broker's clientele. If the broker has to go through the pile to find the relevant lists, they're doing your work — and they'll resent it.
Gifts, giveaways and other special promotions rarely work. There's a conflict in a broker accepting a gift, such as a vacation or laptop computer, for recommending a particular list. It looks especially bad if the list doesn't work.
The biggest mistake a list owner or manager can make is not carefully analyzing the marketing challenges of direct marketers before approaching their list brokers with list suggestions. The quickest way to lose credibility is to recommend your lists when they are clearly inappropriate for the mail campaign. Don't recommend the Omaha Steaks customer file for a fundraising mailing for Vegetarians Against Animal Slaughter.
Do that even once and you may never get the broker's ear again. And with direct marketing being a relatively small and close-knit community, that's a mistake you can't afford to make.
Stevan Roberts is president of Edith Roman Associates, Pearl River, NY, a firm providing list brokerage, list management, database and Internet marketing services.
