Direct mail lists provide opportunities for businesses to acquire, retain and create loyal customers. However, which lists are usually the best performing lists? How do you go about finding mailing lists? And once you’ve found a listing, how do you know if your investment was worth it?
Direct Mail List Basics
Direct mail lists generally fall into three categories:
- Company-owned lists: These are direct mail (or email) lists that you have created on your own. Many online businesses include a subscription box on their website so customers and visitors can choose to provide their email address in exchange for information, news, white papers, and other freebies. Businesses can also create their own “internal lists,” as such lists are called, by using records of past purchases and leads to create a basic mailing list. For direct mail, you can use physical addresses without implied permission. For email marketing, always use a subscription method and only do permission-based marketing to avoid being labeled a spammer.
- Answer lists: Reply lists are rented by companies that specialize in mailing lists, called list brokers. This list is based on past purchasing or response behavior and may include catalog mailing lists, direct mail or direct TV buyers, or magazine subscribers. Many companies make money by renting their list to other companies. The idea behind using such a list is that past buying behavior is the best indicator of future buying behavior. In other words, if someone responded to a direct TV advertisement for jewelry, they are more likely to respond to another offer for jewelry. Listing brokers often add additional selections for an additional fee, such as 3-month buyers. This allows you to target people who have recently purchased such an item. Again, based on years of data from many industries, these are the people most likely to respond to similar offers again, which is why direct sellers look for such lists.
- compiled lists: Compiled lists are created or compiled from public records. These lists used to be based on DMV records, but are now mostly typed into computers directly from phone books. Sometimes public data, such as census data, is added to the list, providing some ability to sort by income and other factors from the census data. Compiled lists are the least expensive but also the least likely to respond to specific offers. Going back to the jewelry example, you might rent a compiled list of people who live in a high-income ZIP code, thinking they’re likely to buy jewelry from a direct mail order catalog. But you have no way of knowing from the compiled list whether those people are comfortable shopping online, over the phone, or through a catalog. A list of responses indicates that such consumers have done so in the past and are more likely to do so again.
There are general list brokers that offer a wide range of mailing lists and specialists, like Market Data Retrieval, that focus solely on industry, like education in the MDR example. Ask your peers for the best listing brokers in your industry.
rental mailing lists
Once you’ve found a company that offers listings, look through their catalog or speak to a listing broker over the phone. Share your ideal client profile; who are you talking to? List brokers will suggest several lists and send you data cards via email or fax. These cards provide information about the list: who rents it, whether it is compiled or responsive, and the data selections available. Data selections are optional methods of using a computer to narrow down the prospects most likely to respond to your offer. Selecting may include age, gender, products purchased, or recent purchase behavior.
Lists have a base cost per thousand. List companies typically don’t rent less than 10,000 records, so take the cost per thousand records, multiply it by 10, and you’ll get the minimum amount of money you’ll need to spend on a list. Additional charges may be added for multiple selections or to generate the list from your computer.
Make sure the list has been recently updated. Good list companies run their lists through various databases obtained from the Direct Marketing Association and the US Post Office. These include removing names of deceased individuals, updating lists with new email addresses, people who have moved and suppress (remove) people who have asked to be on the “Do Not Mail” list or the Direct Marketing Association’s preference list. All of this can add costs early in the process of renting a list, but think about the money wasted mailing pieces to people who can’t respond. If they’ve moved, died, or hate spam, why email them in the first place? You’re spending money on creative design, printing, mailing house costs, and postage, so save money and don’t mail those people.
Test and use of direct mail lists
Although the minimum number of names on a typical direct mail rental list is around 5,000 to 10,000 names, many companies will allow you to rent a smaller segment for testing. Be sure to encode your direct mail pieces with a unique phone number, source code, or other method of tracking responses so you can see which list performed best.
Mailing lists are rented for single use or unlimited multiple uses. You will be asked up front to specify what you intend to use and most companies request a mail sample. One of the most common questions I get from people new to direct mail is, “Why can’t I just pay for a one-time use and then reuse the list, since most lists are provided electronically these days?” The answer is simple: they will catch you! Mailing list companies include so-called “seed” addresses on their list that, to you and me, look like any other name on the list, but actually go back to the company or someone employed by the company to monitor the list. If you are caught using a mailing list more times than you paid for it, you are subject to prosecution, fines, or both. Its not cute. do not do it
Direct mail in today’s market
Direct mail has been around since the late 1800s when catalogs opened up a world of new products for rural Americans. Although a large number of consumers have moved their purchases online, many still prefer to look at an old catalog before buying. Direct mail can attract and invite consumers to visit a website to place an order. A good mix of old-fashioned direct mail marketing, postcard marketing, and a solid website with search engine optimization techniques in mind is a winning combination for acquiring, retaining, and creating loyal customers—and making money in the process.
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