List Envelope
2009
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More Great Information on List Envelope:
ABC's of How to Compile, Maintain & Sell "Red Hot" Name Lists by Hani Masgidi
NAME LISTS AND THEIR USE
Virtually every inquiry or buyer's name ultimately ends up on amailing list. Some are small lists, while others containmillions of names. Some are meticulously maintained, whileothers are carelessly handled.
For those interest in mail order advertising, mailing lists canprove to be very valuable as well as a saleable commodity. Ifyou wish to increase your sales, it is often a good idea to gointo direct mail. To do this you would begin by renting anotherfirm's mailing lists. Or, you would rent your list ofcustomers' names to another firm. Either way, mailing listscan, and do play an important part in the every day world ofmail order.
Basically, there are three types of lists. They are:
- house lists - mail response lists - compiled lists.
Let's examine each more closely.
HOUSE LISTS
A house list simply put is a list of your own customers. Theymay be active, or inactive. They may be inquiries or buyers.They may have made ten purchases or just one, or in the case ofinquiries, none. They may have placed an order in the last fourmonths, or in the last four years. They may have spent a greatdeal of money or a small amount. They may be credit card buyersor cash buyers.
Your house list contains your most valuable asset . . . thenames of your own customers. These are the people who havepurchased from you in the past and are very likely to purchasefrom you in the future. You can spend a great deal of money torent outside lists, but none will bring you the financialrewards you will reap from your own customer list. These peopleknow and trust you, and will order on a continuing basis.
MAIL RESPONSE LISTS
Second in importance are mail response lists. These are peoplewho have responded to another firm's direct mail offer. Theidea is to pick out a list of customers who have orderedproducts similar to those sold by your firm. Since it is awell-known fact that these people have previously responded toan offer similar to yours, there is an excellent chance thatthey will also respond favorably to your offer.
COMPILED LISTS
Although the people on compiled lists do not usually respond aswell as the people on house lists or mail response lists, theselists can still be helpful if properly used. These lists arenot generally used by small or medium sized business firmsbecause they are too general in nature. But large firms, suchas oil companies and insurance firms find them useful and evenprofitable. I have never used a compiled list and do notrecommend their use for anyone but the largest mailers.
While there are no set rules which can be applied to mailinglists, here are few "rules of thumb" that can be regarded asreliable in most cases. They may not apply to your listsituation, but they will give you food for thought.
The average list will change at least 15%-20% each year. Somemailing lists will change only 10%, while others have as high asa 100% rate of turnover. (Lists of high school seniors), etc.
A direct response list (people who have already purchased goodsthrough the mail) will out-pull a compiled list.
A customer list will out-pull all other outside lists. Byoutside list I mean direct response or compiled lists.
Allocate 10% or more of your direct mail budget to listdevelopment and maintenance. The 10% figure is the minimumamount you should spend. Most successful businesses find themore they spend the more they prosper.
People over 35 years of age as a group, respond to mail orderoffers at a much higher rate than do people under 35 years ofage.
People living in rural areas respond to mail order offers at ahigher rate than do people who live in urban areas.
People who have ordered through the mail within the last 3 - 6months ("hot-line" buyers) are the most productive names you canget.
Multiple buyers (people who have made two or more separatepurchases through the mail within a season) will always outpullbuyers who have purchased only once within a season.
The results you can expect will vary by season and/or months ofthe year, and by regional areas and states.
Every list should be checked and cleaned at least twice a yearor more. It is a good idea to review and update your list atleast every six months whenever possible.
Responsibility for maintaining and updating of your list shouldbe delegated to a single individual whenever possible. We'veheard the expression "too many cooks spoil the broth", well,when it comes to mailing lists it is a good idea to limit thenumber of individuals who handle the list to as few as ispossible. The fewer the better.
Use outside consultants and service organizations to help youwith your list decision. These people have made it theirbusiness to study and understand lists.
SHOULD YOU USE LISTS
The first thing to consider when trying to make a decision abouta particular list is whether or not the people on that listwould be interested in your product. You want a list of peoplewho have purchased something similar to your product, or atleast something in the same general category. People who havealready purchased cheese products are perfect for you if you areselling cheese products. But, if you are selling fishingsupplies you would never want to rent a list of buyersinterested in cheese products. Instead, you would want to renta list of people interested in fishing. You might considerrenting a list of names from a publisher who publishes a fishingmagazine. Or maybe, a list of people who have recently appliedfor a fishing license. When renting lists it is imperative tofind a list that parallels as closely as possible your own listof customers. The right list can and usually does make atremendous difference in the results you can expect.
WHAT TO SPEND
Today, there are thousands of mailing lists available inthousands of categories. Almost any offer, no matter howunusual, can be matched to an appropriate list. The price of amailing list can start from as low as $15 per thousand to ashigh as $75 per thousand and more. A few of the factors thatdetermine the price of a mailing list are:
- Freshness of list.
- Buyer or inquiry.
- Amount of purchase.
- Multiple or one time buyer.
- "Hot-line" buyers.
- Credit card buyers.
- Frequency of purchase.
- Brokers recommend it's use.
As you can see, many factors come into play when pricing amailing list. The more desirable the list, the more you canexpect to pay.
LIST BROKERS AND COMPILERS
It is almost impossible to succeed in direct marketing withoutthe help and guidance of competent list brokers and compilers.It is the list broker's job to bring together the owner of alist and the firm who wishes to rent that particular list. Thefee for this service is usually a flat 20% on each rental. Youcan rent names through a list broker for the same price youwould pay on your own. So, it is to your benefit to takeadvantage of this service. It is to the broker's advantage tohelp you choose the best list available for your needs, so thatif your initial test proves successful, there is a good chanceyou will wish to rent the whole list in the future.
After a list broker arranges the rental, he next bills the firmrenting the list and forwards the proper payment to the owner ofthe lists. These services are all included in his fees.
A list compiler represents those lists owned and maintained bythe company that employs him. They are specialists for thecompiled list they represent. Basically, the compiler offersthe same services as a broker.
NAME LISTS - A PROFITS CENTER FOR YOU
Many companies with as few as a few thousand names are earning asubstantial income from the rental of their list. Larger firmswho have lists in excess of 50,000 names are reaping hugerewards. If you will simply bear in mind the fact that thesesmall companies with small lists are able to gross $40,000 ayear and more in rental income fees alone, you begin to grasp ameasure of the significance of just how profitable the buyingand selling of names can be for you. It is truly a profitcenter without parallel in the mail order industry.
List prices depend on the time and money you spent compilingthem. Some lists are easily accessible and you cannot charge agreat deal for them. Other lists require a great deal of timeand money to compile. These lists are usually very expensive.
NOTE: You have probably seen many dealers advertising theirlists at cut-rate prices. In most cases these lists areworthless or so out-of-date that they are no longer of any useto anyone, except to sell to unsuspecting mail order buyers.
Try to stay away from these dealers. Most of them are sellinggarbage.
YOUR OWN LIST
Once you have gotten your mail order business off the ground andhave acquired a large enough list of inquiries or buyers, orboth, it is a good idea to put your customer list up for rentalwith as many brokers as possible.
While it is true that the primary purpose of compiling your ownlist of customers is to generate sales of your own products; animportant secondary source of income can be generated throughthe rental of your list to non-competing firms. Profits fromthe rental of house lists can be enormous. It is not uncommonfor many mail order businesses to make more money from therental of their lists than they earn form the rest of theirbusiness. Indeed, if it were not for the monies received fromlist rentals, many a mail order firm would soon be forced to goout-of-business.
For example, let us assume taut you have a customer list of50,000 names. This list is considered small by most experts,but it will still account for hefty revenues. If you charge $40per thousand names, you will receive $2,000 each time you rentyour list. Of course, you will have to allow for the brokerscommission of 20% or $400. That still leaves you with $1,600,assuming there are no other costs involved. If you rent yourlist ten times during the course of a year you should netapproximately $16,000.
Another benefit of renting your list to non-competing firms isthat you will be able to get new ideas and insights about whatyour customers' likes and dislikes are. In addition, one of thefirms that rents your list may try an approach that you mightwant to imitate.
Many firms rightly or wrongly, refuse to rent their house listto another firm. They feel that the results of their futuremailings will be diluted if their customers are deluged withoffers from other companies. Other firms feel just the oppositeis true. They state that as long as they rent their list to anon-competing firm no harm will be done. In fact, many feelthat by renting their list to other companies, they are helpingto insure that their customers continue to be mail order buyers.Still other firms take a middle-of-the-road approach to therenting of their list. These firms make sure they rent onlytheir old subscribers list or inactive customer list. They donot rent their current subscribers list or the names of theiractive customers.
Finally, there are the firms who like to exchange lists withboth their competitors and non-competitors. Usually, onlyinquiries of inactive customers names are swapped. The bestparty of list swapping is the cost. If you would normally haveto pay $40 per thousand names for a list, you can get it foronly $8 per thousand names when you swap lists. (You pay onlythe brokers fee, or 20% of $40.)
FUNCTIONS OF LIST BROKERS
The DMAA research report lists the most important servicesperformed by list brokers.
FINDS NEW LISTS - The broker is constantly seeking new lists andselecting for your consideration ones which will be ofparticular interest. In fact, brokers spend a great deal oftheir time encouraging list owners to enter the list rentalfield.
ACTS AS A CLEARING HOUSE FOR DATA - The broker saves youvaluable time because you can go to one source for aconsiderable amount of information, rather than to many sourceswhich may or may not be readily available.
SCREENS INFORMATION - The broker carefully screens the listinformation provided by the list owner. Where possible he orone of his representatives personally verifies the informationprovided by the list owner. In addition, brokers in theNational Council of Mailing List Brokers have available to thema wealth of information resulting from the combined efforts ofthe members.
REPORTS ON PERFORMANCE - The broker knows the past history ofmany lists and usually knows the performance of ones which havepreviously been used by other mailers.
ADVISES ON TESTING - The broker's knowledge of the makeup of alist is often valuable in determining what will constitute arepresentative cross section of the list. Obviously, an errorin selecting a cross section will invalidate the results of thetest and possibly eliminate from your schedule a group of namesthat could be responsive.
CHECKS INSTRUCTIONS - When you place an order with a list ownerthrough a broker, he and his staff double check the accuracy andcompleteness of your instructions, thus often avoidingunnecessary misunderstandings and loss of time.
CLEARS OFFER - The broker clears for you in advance the mailingyou wish to make. He supplies the list owner either with asample of your piece or a description of it, and by gettingprior approval minimizes the chance of any later disappointments.
CHECKS MECHANICS - The broker clears with the list owner theparticular type of envelope, order card, or other material whichis to be addressed.
CLEARS MAILING DATE - When contacting the list owner, the brokerchecks on the mailing date which you have requested and asksthat it be held open as a protected time for you.
WORKS OUT TIMING - The broker arranges either for material to beaddressed or labels to be sent to you at a specified time, thusenabling you to maintain you schedule of inserting and mailing.
LIST OWNER-BROKER RELATIONS
GET LIST MAINTENANCE ADVICE - Consult with the list broker whendeciding how to maintain your list so you may set it up the mostpractical, economical and rentable way.
DISCUSS RATES - Discuss with your broker the price you willcharge for rentals and decide on a price schedule that willbring you the greatest volume of profitable business.
SUPPLY ACCURATE DATA - Be sure the list information you furnishis accurate. If the addresses in a list have not been correctedwithin a reasonable period of time, tell the broker.
If a list contains a percentage of names of people who bought onopen account and failed to pay, give this information to thebroker.
If you represent your list as made up entirely of buyers, besure it does not include any inquiry or prospect names.
If you have bought out a competitor and have included some ofhis names in your customer list, be sure to state this fact.
Aside from obvious aspects of misrepresentation, you will be theone who suffers when you mislead a broker.
ADDRESS ON SCHEDULE - Establish a reputation for addressing ontime as promised. If you accept orders and fail to fulfil themon schedule, brokers become aware of this and find they can notconscientiously suggest your list to potential users. If, forsome reason, you foresee a delay, advise the broker immediately,so he can advise the mailer.
FURNISH LATEST COUNTS - Keep the broker posted on current listcounts, rates, changes in the sources of the names and the like.When the composition of a list changes, it may very well becomemore interest to a user who had previously felt that it was notsuitable for his purpose. In addition, when current informationis offered to a potential user through the broker, it is morelikely to develop activity than is an out-dated description.
CHOOSE BROKERS WISELY - Consider carefully whether to make yourlist available to a number of list brokers or just to onebroker. There are many things to be said in favor or workingwith several brokers. And at times there are also some goodreasons for working exclusively with one broker. While thedecision is yours, you should keep in mind the fact that brokersare people and each has his own particular personality,following, and sphere of influence. Therefore, as a list owner,you will be well advised not to narrow the field unless yourfacilities for addressing are so limited that the orders onebroker can develop for you will be more than sufficient to takeup all the available addressing time.
PROTECT BROKERS - It takes a lot of time and effort on the partof a broker to interest a mailer in testing your list.Therefore, continuation runs should be scheduled through theoriginal broker so long as he continues to render satisfactoryservice to his client. The broker is a member of your salesforce, and he can only continue to do an effective job so longas you protect him on the accounts he develops for you.
Recently there has been a trend toward list management
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Article Source: http://www.earticlesonline.com/Article/ABC-s-of-How-to-Compile--Maintain---Sell--Red-Hot--Name-Lists/109448
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