If you’re considering using direct mail as part of your marketing mix, it’s vital to understand what constitutes a good mailing list as well as ways to manage mailing list rentals to save money. The best mailing list you can use is your house file – the list of customers with whom you’ve already established a business relationship or who have inquired about your company’s products and services. Hands down, a house file out performs a rented list almost every time. Throughout my many years managing direct mail for large for profit and not for profit corporations, I always tested the house file against rented lists, and it was usually two for one; the house file outperformed rented lists twice as well.
While house files have an important place in the direct marketing mix, they cannot help you with prospecting or reaching new customers. That’s where rented mailing lists come into play. Mailing lists are never purchased but rather are rented for one or multiple times of use. Renters must enter into a contractual agreement with the list provider, promising never to sell or over mail to the list. How would they find out if you did? Each file is ‘seeded’ with names and addresses that are indistinguishable from the others on the list but contain the addresses of people employed to monitor and report list abuse. If you mail more than the amount of times you paid for, you will get fined by the list owner.
Before renting your first mailing list, there are five important considerations. Understanding each will not only help you save money on rental costs and mailings but can actually increase your response rate.
Five Mailing List Rental Considerations for Effective Direct Mail
1. Determine how many times you want to use the list.
Mailing lists are rented for a set number of uses. You cannot buy a list outright, nor can you rent it once and then use it multiple times without paying the list owner the appropriate rental fees. Consider renting a home. You wouldn’t pay for one month’s rent and then expect to live there your whole life rent-free, would you? List owners ‘seed’ mailing lists with recipients who track and monitor list usage. Begin your mailing list project by knowing how many times you plan to use your list. Most companies choose one time use until they know the list works for them.
2. Find the right list for your business.
Create a customer profile, outlining the demographics of the most likely customer. What are you selling? What do you want to get from your mailing? A pediatric dentist will rent an entirely different list from a hotel chain in a tourist town. Knowing your target customer and developing a specific profile helps you narrow down the myriad list choices. A basic customer profile outlines the gender, location, income, age bracket, and likes/dislikes of the customer. Companies that provide lists offer their customers many choices in selecting the right recipients. Often you will find selections along demographic information or recency of purchase or response. Choose the list selections that narrow down the target to the people most likely to respond to your offer. If the company offers names that have responded to offers in the last three months, a truism in direct marketing is that recent behaviors predict future behaviors, so it’s worth spending some money to rent these names. Companies who rent lists include InfoUSA, Walter Karl, and many others.
3. Order the appropriate output.
If you’re printing and mailing from a vendor, order an electronic file. The standard addressing method today is ink jet. Names, addresses, and bar codes that are easily read by post office machines are ink jet printed directly onto the mail piece. Small businesses who plan to send their own mailings may wish to order peel and stick labels. Ordering preprinted labels saves time. If ordering an electronic file, the file format called ASCI (pronounced “ask-eee”) easily converts into Excel, Access, or other standard software.
4. Choose response lists over compiled lists.
What’s the difference? A response lists is a mailing list based on purchasing behavior. Addresses on the list are from people who responded to various offers, whether it’s ordering from a direct television commercial or catalog to subscribing to a magazine. It’s a truism in direct marketing that past buying behavior is one of the best predictors of future behavior. There’s a greater statistical liklihood that people on the response list who bought gourmet cookware, for example, will respond to a cookbook offer.
The opposite of a response list is a compiled list. These lists are typically generated on publicly available data, such as telephone books. There’s no indication of what the person may be interested in. Basic demographic data is usually available and is based on appending records such as census data to a compiled list. These may be useful for offers limited to a geographic area and of mass appeal, such as a new auto repair store opening announcement. In that example, the automotive store simply wants addresses from a particular local area and doesn’t much care if the people at the addressses have bought car parts, accessories or other car related items. Chances are pretty good that folks living at the addresses have a car, so the compiled list may be worth using.
Compiled lists generally cost less to rent that response lists.
5. Save nixies.
Nixies aren’t little mythical creatures like fairies or elves. It’s the direct marketer’s lingo for returned mail. Many list companies offer a return policy. The policy varies according to the company, but some with whom I’ve worked have either given back pennies per bad address or a complete refund. Have a policy and system in place at your company to gather and process the returned mail. At the least, you’ll need to correct any house file addresses that are bad; and if you can get a few pennies credit for each returned piece of mail, so much the better.
The next time you need to rent a mailing list, use these considerations. You’ll get a better response, save money, and build your marketing efforts into a money making machine. When in doubt, consult with professional direct marketing experts to help you find and order the best mailing list for the job.
Jeanne Grunert is a well known direct and online marketing expert and the president of Seven Oaks Consulting. For 20 years, she led marketing departments in the retail, financial services, and publishing industries. She h