Abc's Of How To Compile, Maintain & Sell "red Hot" Name Lists

NAME LISTS AND THEIR USE
Virtually every inquiry or buyer's name ultimately ends up on a
mailing list.  Some are small lists, while others contain
millions of names.  Some are meticulously maintained, while
others are carelessly handled.
For those interest in mail order advertising, mailing lists can
prove to be very valuable as well as a saleable commodity.  If
you wish to increase your sales, it is often a good idea to go
into direct mail.  To do this you would begin by renting another
firm's mailing lists.  Or, you would rent your list of
customers' names to another firm.  Either way, mailing lists
can, and do play an important part in the every day world of
mail 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.  They
may be active, or inactive.  They may be inquiries or buyers.
They may have made ten purchases or just one, or in the case of
inquiries, none.  They may have placed an order in the last four
months, or in the last four years.  They may have spent a great
deal of money or a small amount.  They may be credit card buyers
or cash buyers.
Your house list contains your most valuable asset . . . the
names of your own customers.  These are the people who have
purchased from you in the past and are very likely to purchase
from you in the future.  You can spend a great deal of money to
rent outside lists, but none will bring you the financial
rewards you will reap from your own customer list.  These people
know and trust you, and will order on a continuing basis.
MAIL RESPONSE LISTS
Second in importance are mail response lists.  These are people
who have responded to another firm's direct mail offer.  The
idea is to pick out a list of customers who have ordered
products similar to those sold by your firm.  Since it is a
well-known fact that these people have previously responded to
an offer similar to yours, there is an excellent chance that
they will also respond favorably to your offer.
COMPILED LISTS
Although the people on compiled lists do not usually respond as
well as the people on house lists or mail response lists, these
lists can still be helpful if properly used.  These lists are
not generally used by small or medium sized business firms
because they are  too general in nature.  But large firms, such
as oil companies and insurance firms find them useful and even
profitable.  I have never used a compiled list and do not
recommend their use for anyone but the largest mailers.
While there are no set rules which can be applied to mailing
lists, here are few "rules of thumb" that can be regarded as
reliable in most cases.  They may not apply to your list
situation, but they will give you food for thought.
The average list will change at least 15%-20% each year.  Some
mailing lists will change only 10%, while others have as high as
a 100% rate of turnover.  (Lists of high school seniors), etc.
A direct response list (people who have already purchased goods
through the mail) will out-pull a compiled list.
A customer list will out-pull all other outside lists.  By
outside list I mean direct response or compiled lists.
Allocate 10% or more of your direct mail budget to list
development and maintenance.  The 10% figure is the minimum
amount you should spend.  Most successful businesses find the
more they spend the more they prosper.
People over 35 years of age as a group, respond to mail order
offers at a much higher rate than do people under 35 years of
age.
People living in rural areas respond to mail order offers at a
higher rate than do people who live in urban areas.
People who have ordered through the mail within the last 3 - 6
months ("hot-line" buyers) are the most productive names you can
get.
Multiple buyers (people who  have made two or more separate
purchases through the mail within a season) will always outpull
buyers who have purchased only once within a season.
The results you can expect will vary by season and/or months of
the year, and by regional areas and states.
Every list should be checked and cleaned at least twice a year
or more.  It is a good idea to review and update your list at
least every six months whenever possible.
Responsibility for maintaining and updating of your list should
be delegated to a single individual whenever possible.  We've
heard the expression "too many cooks spoil the broth", well,
when it comes to mailing lists it is a good idea to limit the
number of individuals who handle the list to as few as is
possible.  The fewer the better.
Use outside consultants and service organizations to help you
with your list decision.  These people have made it their
business  to study and understand lists.
SHOULD YOU USE LISTS
The first thing to consider when trying to make a decision about
a particular list is whether or not the people on that list
would be interested in your product.  You want a list of people
who have purchased something similar to your product, or at
least something in the same general category.  People who have
already purchased cheese products are perfect for you if you are
selling cheese products.  But, if you are selling fishing
supplies you would never want to rent a list of buyers
interested in cheese products.  Instead, you would want to rent
a list of people interested in fishing.  You might consider
renting a list of names from a publisher who publishes a fishing
magazine.  Or maybe, a list of people who have recently applied
for a fishing license.  When renting lists it is imperative to
find a list that parallels as closely as possible your own list
of customers.  The right list can and usually does make a
tremendous difference in the results you can expect.
WHAT TO SPEND
Today, there are thousands of mailing lists available in
thousands of categories.  Almost any offer, no matter how
unusual, can be matched to an appropriate list.  The price of a
mailing list can start from as low as $15 per thousand to as
high as $75 per thousand and more.  A few of the factors that
determine 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 a
mailing list.  The more desirable the list, the more you can
expect to pay.
LIST BROKERS AND COMPILERS
It is almost impossible to succeed in direct marketing without
the help and guidance of competent list brokers and compilers.
It is the list broker's job to bring together the owner of a
list and the firm who wishes to rent that particular list.  The
fee for this service is usually a flat 20% on each rental.  You
can rent names through a list broker for the same price you
would pay on your own.  So, it is to your benefit to take
advantage of this service.  It is to the broker's advantage to
help you choose the best list available for your needs, so that
if your initial test proves successful, there is a good chance
you will wish to rent the whole list in the future.
After a list broker arranges the rental, he next bills the firm
renting the list and forwards the proper payment to the owner of
the lists.  These services are all included in his fees.
A list compiler represents those lists owned and maintained by
the company that employs him.  They are specialists for the
compiled list they represent.  Basically, the compiler offers
the same services as a broker.
NAME LISTS  -  A PROFITS CENTER FOR YOU
Many companies with as few as a few thousand names are earning a
substantial income from the rental of their list.  Larger firms
who have lists in excess of 50,000 names are reaping huge
rewards.  If you will simply bear in mind the fact that these
small companies with small lists are able to gross $40,000 a
year and more in rental income fees alone, you begin to grasp a
measure of the significance of just how profitable the buying
and selling of names can be for you.  It is truly a profit
center without parallel in the mail order industry.
List prices depend on the time and money you spent compiling
them.  Some lists are easily accessible and you cannot charge a
great deal for them.  Other lists require a great deal of time
and money to compile.  These lists are usually very expensive.
NOTE:  You have probably seen many dealers advertising their
lists at cut-rate prices.  In most cases these lists are
worthless or so out-of-date that they are  no longer of any use
to anyone, except to sell to unsuspecting mail order buyers.
Try to stay away from these dealers.  Most of them are selling
garbage.
YOUR OWN LIST
Once you have gotten your mail order business off the ground and
have acquired a large enough list of inquiries or buyers, or
both, it is a good idea to put your customer list up for rental
with as many brokers as possible.
While it is true that the primary purpose of compiling your own
list of customers is to generate sales of your own products;  an
important secondary source of income can be generated through
the rental of your list to non-competing firms.  Profits from
the rental of house lists can be enormous.  It is not uncommon
for many mail order businesses to make more money from the
rental of their lists than they earn form the rest of their
business.  Indeed, if it were not for the monies received from
list rentals, many a mail order firm would soon be forced to go
out-of-business.
For example, let us assume taut you have a customer list of
50,000 names.  This list is considered small by most experts,
but it will still account for hefty revenues.  If you charge $40
per thousand names, you will receive $2,000 each time you rent
your list.  Of course, you will have to allow for the brokers
commission of 20% or $400.  That still leaves you with $1,600,
assuming there are no other costs involved.  If you rent your
list ten times during the course of a year you should net
approximately $16,000.
Another benefit of renting your list to non-competing firms is
that you will be able to get new ideas and insights about what
your customers' likes and dislikes are.  In addition, one of the
firms that rents your list may try an approach that you might
want to imitate.
Many firms rightly or wrongly, refuse to rent their house list
to another firm.  They feel that the results of their future
mailings will be diluted if their customers are deluged with
offers from other companies.  Other firms feel just the opposite
is true.  They state that as long as they rent their list to a
non-competing firm no harm will be done.  In fact, many feel
that by renting their list to other companies, they are helping
to insure that their customers continue to be mail order buyers.
Still other firms take a middle-of-the-road approach to the
renting of their list.  These firms make sure they rent only
their old subscribers list or inactive customer list.  They do
not rent their current subscribers list or the names of their
active customers.
Finally, there are the firms who like to exchange lists with
both their competitors and non-competitors.  Usually, only
inquiries of inactive customers names are swapped.  The best
party of list swapping is the cost.  If you would normally have
to pay $40 per thousand names for a list, you can get it for
only $8 per thousand names when you swap lists.  (You pay only
the brokers fee, or 20% of $40.)
FUNCTIONS OF LIST BROKERS
The DMAA research report lists the most important services
performed by list brokers.
FINDS NEW LISTS - The broker is constantly seeking new lists and
selecting for your consideration ones which will be of
particular interest.  In fact, brokers spend a great deal of
their time encouraging list owners to enter the list rental
field.
ACTS AS A CLEARING HOUSE FOR DATA -  The broker saves you
valuable time because you can go to one source for a
considerable amount of information, rather than to many sources
which may or may not be readily available.
SCREENS INFORMATION - The broker carefully screens the list
information provided by the list owner.  Where possible he or
one of his representatives personally verifies the information
provided by the list owner.  In addition, brokers in the
National Council of Mailing List Brokers have available to them
a wealth of information resulting from the combined efforts of
the members.
REPORTS ON PERFORMANCE - The broker knows the past history of
many lists and usually knows the performance of ones which have
previously been used by other mailers.
ADVISES ON TESTING - The broker's knowledge of the makeup of a
list is often valuable in determining what will constitute a
representative cross section of the list.  Obviously, an error
in selecting a cross section will invalidate the results of the
test and possibly eliminate from your schedule a group of names
that could be responsive.
CHECKS INSTRUCTIONS - When you place an order with a list owner
through a broker, he and his staff double check the accuracy and
completeness of your instructions, thus often avoiding
unnecessary misunderstandings and loss of time.
CLEARS OFFER - The broker clears for you in advance the mailing
you wish to make.  He supplies the list owner either with a
sample of your piece or a description of it, and by getting
prior approval minimizes the chance of any later disappointments.
CHECKS MECHANICS - The broker clears with the list owner the
particular type of envelope, order card, or other material which
is to be addressed.
CLEARS MAILING DATE - When contacting the list owner, the broker
checks on the mailing date which you have requested and asks
that it be held open as a protected time for you.
WORKS OUT TIMING - The broker arranges either for material to be
addressed or labels to be sent to you at a specified time, thus
enabling you to maintain you schedule of inserting and mailing.
LIST OWNER-BROKER RELATIONS
GET LIST MAINTENANCE ADVICE - Consult with the list broker when
deciding how to maintain your list so you may set it up the most
practical, economical and rentable way.
DISCUSS RATES - Discuss with your broker the price you will
charge for rentals and decide on a price schedule that will
bring you the greatest volume of profitable business.
SUPPLY ACCURATE DATA - Be sure the list information you furnish
is accurate.  If the addresses in a list have not been corrected
within a reasonable period of time, tell the broker.
If a list contains a percentage of names of people who bought on
open account and failed to pay, give this information to the
broker.
If you represent your list as made up entirely of buyers, be
sure it does not include any inquiry or prospect names.
If you have bought out a competitor and have included some of
his names in your customer list, be sure to state this fact.
Aside from obvious aspects of misrepresentation, you will be the
one who suffers when you mislead a broker.
ADDRESS ON SCHEDULE - Establish a reputation for addressing on
time as promised.  If you accept orders and fail to fulfil them
on schedule, brokers become aware of this and find they can not
conscientiously suggest your list to potential users.  If, for
some reason, you foresee a delay, advise the broker immediately,
so he can advise the mailer.
FURNISH LATEST COUNTS - Keep the broker posted on current list
counts, rates, changes in the sources of the names and the like.
When the composition of a list changes, it may very well become
more interest to a user who had previously felt that it was not
suitable for his purpose.  In addition, when current information
is offered to a potential user through the broker, it is more
likely to develop activity than is an out-dated description.
CHOOSE BROKERS WISELY - Consider carefully whether to make your
list available to a number of list brokers or just to one
broker.  There are many things to be said in favor or working
with several brokers.  And at times there are also some good
reasons for working exclusively with one broker.  While the
decision is yours, you should keep in mind the fact that brokers
are 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 your
facilities for addressing are so limited that the orders one
broker can develop for you will be more than sufficient to take
up all the available addressing time.
PROTECT BROKERS - It