Thursday, 26 September 2013

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 takes a lot of time and effort on the part



of a broker to interest a mailer in testing your list.



Therefore, continuation runs should be scheduled through the



original broker so long as he continues to render satisfactory



service to his client. The broker is a member of your sales



force, and he can only continue to do an effective job so long



as you protect him on the accounts he develops for you.





Recently there has been a trend toward list management as



opposed to list brokers. A list manager takes over complete



management of your list for rental purposes. Under this form of



contract, the list manager is responsible for the following



functions:





- He solicits his own brokerage customers directly.





- Makes all contacts with list brokers and is responsible for



processing their orders.





- Should at his own expense advertise the list.





- Analyzes the results of each mailing and offer suggestions and



advice.





- Keeps all records and is responsible for all billings.





- Provides the list owner with a detailed list of activity, along



with commissions earned, etc.





For this extra service he usually earns an additional 10%.



Today, however, many list managers are asking for and getting



even more. In my opinion, they are well worth the extra money.



A good list manager will do his utmost to promote your list. In



return, he will earn a substantial sum of money. But, not as



much as the list owner. It is not unusual for a good list



manager to double or even triple your previous rental income.



Naturally, some list mangers will do a better job than others.



If you decide to use a list manger instead of a broker, make



sure you select the best one available. It will take some time,



but it will be time well spent.





I strongly suggest you subscribe to Direct Marketing Magazine,



224 Seventh St., Garden City, NY 11530. This magazine will



keep you abreast of the latest information available dealing



with direct marketing and list selection.





HOW TO TEST A LIST





Today the minimum number of names you are allowed to test is



usually around 5,000. However, many brokers will waive this



rule. They do not want to lose a potentially good customer just



because he or she wants to test 3,000 names instead of 5,000.





When testing a list always request Nth selection. This will



insure that you will be testing the effectiveness of the entire



list, and not just one small segment. Nth selection simply



means that the computer randomly picks a few names from the



entire list. The reason you should always use Nth selection is



simple, besides the obvious reason already mentioned. It stops



the broker or list owner from giving you his loaded names. Many



a shrewd broker or list owner will rent you only their best



names when you test a list. This will insure that you will get



the best results possible. Later, when you return for



additional names, you will get the shock of your life.





In order for a beginner to get a trustworthy list it might be a



good idea to rent your first nm large, reputable firm. Later,



as you grow, tests can be made with lists from smaller firms.



Another reason for selecting larger lists is, that should the



results be rewarding, you will have a larger selection of names



for your future use.





Always try to rent a list consisting of buyers names only. The



more recent the better. If you cannot get a list of buyers



names only, go for a mixed list. This particular list will



consist of both buyers and inquiries names. Once again, it is



advisable to get the freshest names possible.





Note: Always make certain that any list you decide to rent has



been cleaned within the last 6-12 months. Otherwise, you may be



throwing your time and money away. Lists that have not been



kept up-to-date deteriorate rapidly. Many lists are totally



worthless unless they are constantly cleaned.





WHO BUYS MAILING LISTS





All mail order experts agree that there is no less expensive



way to increase their sales than by using the medium of direct



mail. The problem all direct mail users face is where can they



obtain the lists they need to continue their mailing campaigns.



That is where the "mailing list dealer" come in. By being able



to supply these firms with names of authentic mail order



prospects he or she is able to build a very successful business.





Once a firm has faith in you and the list you furnish, you can



be assured that they will continue to use your service as long



as you give them the same excellent service and results as in



the beginning. Remember, the compiling and selling names is a



very competitive business, and yet many aspirants, most with



little or no knowledge of the business, strike it rich in this



field. However, you must at all times offer your clients



top-notch service and order-pulling lists.





HOW TO GET STARTED





To be frank and candid, your chances of success are almost



non-existent unless you have primary knowledge of mail order



selling in general. So, it would be prudent to start out in



another phase of mail order selling if you are a mail order



neophyte.





The starting supplies needed to operate a mailing list business



are moderate and inexpensive. You'll definitely need a



typewriter (the best one you can possibly afford).



Additionally, you'll need the following supplies . . .



letterheads and envelopes, business cards, record books, some



sort of filing cabinet, sheets of perforated gummed labels,



(available at most stationery stores), carbon paper, shipping



envelopes or containers, pens and pencils and a few other



supplies as you start to grow.





There are two ways for beginners to compile name lists: (1) On



standard gummed labels, (available from your local stationery



store) (2) Computer labels, from a home computer or a large



main frame computer, (available from firms who specialize in



this field). Since this book is primarily for beginners we will



first discuss the gummed labels. Later in this book there is a



section devoted to computer lists.





Mailing lists are usually typed on sheets of perforated gummed



labels ready to affix to envelopes. These standard sheets of



perforated gummed labels come in 33 up sheets. Their cost is



usually around $25 per thousand sheets. You can also offer the



customer name lists on plain bond paper, usually there are from



35-60 names typed on a plain piece of paper. I do not generally



recommend this method of name selling since it usually indicates



the seller is a rank amateur. It is usually a good idea to sell



your list on either gummed or pressure sensitive labels only.





Later, as you expand, you will want to use a method of list



compiling that will allow you to put the names in exact zip code



order. This is a very important factor when it comes to selling



your list of names. But in the beginning, you will not have the



experience or money needed to properly zip code your list.





When buying gummed, perforated labels, you should always get the



ones with the carbon already inserted between each sheet of



paper. In this manner, you will be able to type the name once



on the original and have as many as 5 additional copies of each



for sale.





Another method of reproduction of your mailing list is a copy



machine. You simply insert your master copy into the machine



and copy as many sheets as you need. You can do this for



pressure sensitive labels as well as gummed labels. If you can



afford to rent, lease or buy your own copy machine it will



greatly increase your volume and also your profit potential.





There are many, many people using the above methods to reproduce



and sell their name lists. Many are making a small fortune.



But, the real big money cannot be made until you computerize



your list.





HOW TO COMPUTERIZE AND MAINTAIN YOUR MAILING LIST FOR GREATER



PROFITS





Probably the one question most frequently asked by mail order



list compilers is, should I or shouldn't I computerize my list?



The answer is, "that depends". There are many factors to be



considered before you make up your mind one way or the other.



But, one thing is for sure, if computerizing your list is right



for you, it will improve your profit potential in 2 ways . . .



(1) By a more efficient marketing of your list (2) By



increasing your income from the rental of your list.





Until recently, it was not a good idea to computerize your list



if it contained fewer than 15,000-20,000 names. Today, however,



with the aid of small office and home computers, anyone can



easily store and print out a large amount of names.





So, if you plan on increasing the size and profitability of your



list, computerizing your list isn't only desirable, it's



virtually indispensable.





HOW TO CLEAN YOUR LIST





You clean your list by putting the caption "address correction



requested" in the upper left hand corner of your outer envelope



when you mail to your own list. Or, you can offer your



customers 10 new names for every 1 old name they return to you.



This way you would not have to send out any mailings yourself.



Your customers would be cleaning the list for you. Remember,



computerized lists are like children. You have to maintain them



after you've brought them into the world.





List maintenance is principally a matter of adding new names,



deleting "nixies" (undeliverable mail) and entering changes of



address as customers move. None of these tasks are difficult,



but without the proper care and dedication a good list can soon



become worthless.





WHERE TO OBTAIN NAMES FOR YOUR LIST





Naturally, you can rent out your own list of customers if you



have such a list. This is the way most beginners start. We



have previously discussed this aspect of name rentals. You can



also compile other types of name lists. Examples . . . doctors,



lawyers, drug stores, high school students, etc. Several books



and directories have been published that specifically deal with



these types of lists. Two of the best are "Mailing List



Sources", and "Mailing List Directory". These books are not



cheap, so if you do not wish to buy them, they are available at



most large public libraries. Another valuable sources for these



types of lists is "Guide to American Directories for Compiling



Mailing Lists".





Another method of compiling names for a name list is to purchase



the names from a mail order dealer. Many small mail order firms



have no use for their names after they answer the original



inquiry. They are only too glad to sell these names to the



highest bidder. The price you offer for these names is usually



just a fraction of what they would have cost you if you had paid



for the advertisements yourself. I know of one list compiler



who has become a very rich man using this method. He sends out



a form letter to mail order dealers who advertise in the



classified sections of magazines. He offers to buy their



current names and all their names in the future for a fair



price. After he acquires these names, he has them put on a



computer listing and sells them to some of the biggest mail



order firms in the country. He has been doing this for a long



time and he probably is the king of the opportunity-seekers name



list market.





WHAT PRICES TO CHARGE





The price you charge for your list can vary greatly. Basically,



lists, like any other commodity, have different values.





Always remember to keep your prices in line with what the other



list sellers are charging. If you charge too little, most



people will shy away, figuring that your list is not that good.



On the other hand, if you set your price too high, most



prospects will be financially unable or unwilling to spend too



great a sum of money. Always try to be moderate in your price



structure. If you are having good results renting your list,



you might try raising the price slowly and see what happens.



Never jump your price too rapidly if at all possible. This



tends to scare away many good prospects and old customers.





HOW TO ADVERTISE





There are many and varied methods of reaching prospective buyers



of your lists. We will try to discuss a few in this chapter.



Please remember, that there are literally dozens of other ways



to reach customers. We cannot and will not cover all the



methods, but we will attempt to cover some of the most widely



used methods.





Advertise in various trade and business publications. There are



magazines like Zip Magazine and Direct Marketing Magazine that



list dozens of mailing lists in each issue. These ads are



usually placed by the list broker, list manager or the list



owner. This is probably the best method to use if you are going



after big results. It costs a little, but it is well worth the



price. You can also advertise your list in business opportunity



magazines and periodicals. There are hundreds of these



publications available for you to choose from. You will have to



make test to see which one works the best for you.





You can place classified ads in magazines. Many advertisers use



this method because it is cheap and yet reaches a very large



audience. Never ask for money directly from a classified ad.



These ads should be used only to solicit inquiries. When you



receive the prospective buyer's inquiry, you send them all the



relative information about your list. Price, names, zip code.



Another very profitable method used by list sellers is to rent a



list of prospective buyers from another seller. Once you attain



this list, you mail out your list information to this list.





EXAMPLE . . . If you are selling a list containing the names of



people who have inquired about a book on weight-watching, you



might try to rent a list of names from another dealer who is



selling a book dealing with the same subject.





You would ask the other dealer to send you a list of all the



people who have rented his list. Since they rented his list of



people interested in weight-watching, there is a good chance



they would be interested in renting a similar list from you.





As previously stated, there are many more ways for you to reach



prospective buyers. The list of inventive ways is almost



endless. It is up to you to find out which method works best



for you. There is no short-cut - the only way to accomplish



this is by constantly testing all the methods until you hit the



right one for you and for your list.





HOW TO PROTECT YOUR LISTS





If a mailer rents your list and is not specifically given



permission to mail to it more than one time, and does so, then



he is guilty of fraud. The Postal Service frowns on anyone who



does this through the mail and the offender can be sued for



damages as well. The best way to catch anyone doing this is to



seed your list. Put the names and addresses of about a dozen



people in the list and alert them to inform you if they receive



more than one mail offer from the same person or firm. The fact



that they do so does not automatically mean that you have been



defrauded. As you learned from the information presented, it is



highly probable that the name is on more that one list. It is



worth investigating though and I would investigate before filing



any formal charges.





The best way to prevent multiple mailings is to include a letter



with the name list informing the renter that the list is seeded



and threaten prosecution for misuse. No mailer in his right



mind wants problems with Uncle Sam or his Postal Service, and



such a letter will cause an unscrupulous person to have second



thoughts about taking liberties with your list.





HOW TO GET HELP FROM THE EXPERTS





It is a fact of life that no one will want to help you if he



thinks you are trying to take the food out of their family's



mouth. It is no different in the list selling and compiling



field. If you need to, I would call some of the biggest names



in the mailing list business and tell them that I was interested



in having my list of names managed by them. I would tell them



that my list contained 50,000 buyers of mail order books. As we



discussed my list, I would ask a few off-the-cuff questions that



I needed answered. Since they were interested in managing my



list, they would only be too glad to answer any and all of my



questions. You might say that my methods were sneaky and not



above board. I would say that I did what I had to do to



increase my knowledge of the mailing list business.

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