Direct Marketing Basics 1

Your direct mailing piece can be exceptional, your offer can be unbeatable, your presentation excellent … But all will be wasted if the people don’t get to see it. Identifying and obtaining the right list is the key to successful direct mail.


Conventional advertising is the best way of getting your message across to the largest possible number of people. But it’s usually more cost-effective to approach the individual prospect directly, and by name: you will generally get a better response for your investment, and it’s likely to be a better quality response – an actual purchase rather than a request for information, say. The quality of the mailing list you use is crucial to this.
 
The best mailing list is always the one that contains the most potential purchasers. This would normally include existing or previous customers. The difficult part is including potential new customers.

You can of course build your own lists – indeed, you should be doing that as a matter of course, but most smaller organisations simply won’t have collected enough inhouse names for most direct mail exercises. You’ll have to use someone else’s lists – which in practice means renting them.

Finding lists
There are three basic sources for mailing lists:

  • List owners: these people actually own a database and make it available to other organisations for commercial profit. They rent only their own list and do not normally supply any other lists. So a magazine publisher with a subscription file would be a list owner; so is a catalogue retailer with a database of mail-order purchasers.
  • List managers: these market a list on behalf of the list owner. A list manager holds a copy of the database, organises the rental, and oversees its use. In return, the list manager will take a percentage of the fee. Most list managers actually represent lists from many different owners.
  • List brokers: these organisations can supply any commercially available list. As with other industries, brokers are independent and have no allegiance to any particular list owner or list manager. Brokers are normally paid a commission by the list owner or manager when the list is used.

The distinctions between list managers and list brokers are increasingly blurred, though, and list renters don’t normally describe themselves as one or the other.
In practice you can treat them as more or less identical – a list broker will be able to offer you more services and a greater choice, a list manager will probably be slightly cheaper, but either way you’ll get a reasonable amount of hand-holding and a selection of names from one or more databases.

You won’t normally deal with a list owner direct, since the middlemen have more choice and are generally more able to help you identify the right kind of names for your needs.

Most list renters have a website. Most of these will let you enter online requests for list information in some detail, can respond with datacards for lists that meet your specification, and will allow you to place an order there and then. For the small business, this is an easy and stress-free way of getting a mailshot under way.

The internet itself is a good source of lists as more and more business is being done on the web. And people who specifically visit a site are pretty well motivated; they’re now used to filling in registration forms and giving useful personal information before they can proceed. Filling out an online survey or questionnaire is less intrusive and less time consuming than the conventional version.

As a result, names sourced via the internet are proving to be pretty valuable.
Incidentally, list owners or their agents will normally insist on seeing a sample of the mailing piece. They have some legal obligations about the use of the data they’ve collected; and they also need to make sure that their lists aren’t being used by their competitors or to promote competitive products.

Copyright of the list remains at all times with the list owner. This means that you may not copy or pass on the list to any other person without the list owner’s express permission, and you may not use the list except as specified in the contract. Names only become ‘yours’ when they have responded positively to a promotion of you have run.

Costs
Lists come in just about any size, from a few hundred names to several thousand. It all depends on their source.

Prices are quoted per thousand names, and rental charges vary widely according to the list’s quality – how frequently it is updated, whether the names on it are proven purchasers, and so on. But typical rentals range between £80 and £300 per thousand names.

That’s for one use only; if you intend to mail them more than once there will be a discount for quantity.

The more lucrative the potential customer, the more precisely you should target your prospects and the more you should spend on your list rental.

While you can usually order a selection of names from the list, there will be a minimum order quantity which will be charged whether all the records are used or not.

On top of that you may find yourself paying for extras. So the typical bill will include four types of charge:

  • The basic list rental price
  • Selections from the list on the basis of geographic, demographic or other information, with a separate charge for each selection you request.
  • Output format – self-adhesive labels, say, or computer-readable media
  • Delivery, including Mailsort (names are sorted into postcode sequence to qualify for the Royal Mail’s Mailsort discount)
 
 
 
 
 
 
 
You might not see the actual names yourself. Many list owners insist that their data is handled at all times by a third party bureau or mailing house. This is to protect against people breaching the terms of a single-use contract.
 
 

SOURCING DIRECT MAIL LISTS
The “most comprehensive list of lists available in the UK” is a directory called Lists and Data Sources, which references around 6,000 British mailing lists and also includes details of the top list brokers. It is published annually at £190 by Ladson House on 01372 463867 and at www.ladsonhouse.co.uk.

Otherwise it’s easy enough to find list brokers on the web. In fact, you can do all the list identification and ordering online. The Direct Marketing Association at www.dma.org.uk has a members’ directory, or just try your preferred search engine on ‘direct mail’ and ‘mailing lists’.
As a starting point, you could check out “the UK’s premium list broking and list management website” at www.listbroker.com. This claims to offers instant access to 1.6 billion consumer, business and email addresses with associated data for profiling. 
 
 
The right list:

QUESTIONS YOU NEED TO ASK

  • Exactly who is on the list?

You obviously need the right target audience for your promotion.

  • Where did the list come from?Subscribers to a magazine count for more than casual respondents to a promotion, for instance. They’re putting their money where their interests lie rather than chancing their luck.


  • How old is the list?This year’s subscribers are obviously better than those who let their subscription lapse two years ago. Find out how often the list is updated and when that last happened. Be prepared to pay a premium for a bang up-to-date list.
 
 
 
 
 
 
  • What information do you get?And what selections can you make?
 
 
  • Can you see a sample?This may be the most valuable way to see the relevance of the list for your purposes.


  • Does it mix prospects and purchasers? If it’s a purchase-oriented list, does it contain actual purchasers or just everyone who responded? If it is a list of actual purchasers, how recently were the purchases made? Can you select by recency – for instance to get a hot-name list of those who have made purchases within the last 60 days?
 
  • How often has the list been rented?And as a supplementary, who has been using it? An active list might indicate a good response, and big-name users will give it some credibility. But don’t go overboard: a heavily-used list could mean that the recipients are starting to get fed up with DM offers. You don’t want to send mail to people who get it by the ton.


  • Has the list been tested recently by any other renters?After testing, did the renter continue the rollout? You don’t want a list that produced a poor response.


  • Do renters regularly come back to the same list for a follow-up mailing?That would be a good indication of the list’s quality.
 
 
 
 
 
 
 
 
  • Is the list clean of duplications and dead addresses?How frequently is it cleaned?
 
 

 

 

 

TOP TIPS 

  • The best mailings are those that use your own customers and prospects. Repeat business is the easiest and best kind of sale, so work hard at maintaining contacts with your existing customer base.
  • And the easiest way to gather information about customers and prospects is to ask them. The questionnaire form is the answer. Take advantage of the response section of your mailing (as well as coupons, order forms, applications) to ask a few pertinent questions. Or include a longer survey form to collect more in-depth information – as demonstrated for example within the unity® independent tariff guide.

 

  • You can also create your own mailing list within your own web site. If your website audience is very small, you may invite your visitors to subscribe to your own mailing list. You could then manage this using a small database sending multiple emails from your own email software.
  • Make sure everyone on the team is geared up to collect prospect names as a matter of course – anyone that requests information, drops in on your exhibition stand, or simply pops into the store.

 

  • You won’t be able to expand your own inhouse database of names simply by adding rented lists to it. You probably won’t be allowed to see the rented names, for a start, because this is precisely the kind of thing the list owner wants to prevent. But anyone who responds to your mailing is fair game: the name becomes ‘yours’ and can be added to your own list.

 

 

 

 

 

  • As you add information to the database, it can provide you with a detailed portrait of everyone who enquires about or does business with your company. The more information you can gather about your prospects, the more you can tailor your marketing in the future – including any direct mail you choose to do.
  • Finally, be specific about who you are targeting and why. If your direct mail is offer-driven, ensure it will appeal to the potential client.

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