Dealing with brokers: how to rent lists

Renting lists: here are some hot tips for maximising revenue and avoiding problems with your subscriptions marketing lists. Advice is provided by Mike Chantry of Hilite Direct Marketing, the leading list broker in the field.

Part one of this subscriptions marketing article is also on this website.

9. Multi buyer selections
Many mailers claim that a multi buyer is three times more likely to buy from you again than a single buyer. This also holds true for mailers mailing other company’s multi buyers. It’s usually worth paying a premium for this selection.

10. Response rates
If you get a 5% response when mailing your first test list that is NOT your response rate – it’s the very best you can hope to achieve. Your true response rate is the level at which you would still continue to mail.

11. Response comparison: ads – inserts – mailings
The results of over 20 test results I have seen over the years have been pretty consistent. If you get one reply to every one thousand subscribers to a particular magazine advertisement you would get three replies to a loose insert and 10 replies if you mailed them.

12. Discounts
If you ask for a price deal after a successful test, most list owners will know the list worked for you and you won’t get much of a discount. Ask your broker to negotiate the rollout discount before the test.

13. Test sample size
For a statistically valid test you can use a target of 50 responses per cell. If you are testing two cells on a certain list and you expect a 1% response, you would need to mail 5,000 of each cell to get the 50 replies. If you got 70 replies from one cell and only 50 from the other the test would be valid. However, if both test cells only gave you 15 replies the test would be invalid and you could safely say that both tests failed.

14. Roll out increase
Restrict your roll out to a maximum of five times the test. A successful test of 5,000 from a 155,000 list would indicate a limited rollout to 25,000 next time, followed by a mailing of 125,000.

15. Net names – when to use
When you merge two or more lists together you will find people who appear on one or more lists and you may pay for thousands of duplicate names. Most list owners will offer you an 85% net names deal on lists where you order 20,000 names or more and only charge you for the names you use.

16. Net names – when not to use
When your list orders are small you will have to pay for the names you don’t mail. However, as these names bought from at least two firms they are the multi buyers– the very best prospects. These people are often worth a remail in three or four week’s time. If you can vary the look of your mailing you could find that the remail segment is the most profitable.

17. Endorsed mailings
A letter from the list owner endorsing your product or services nearly always lifts response considerably – although it does depend on the relationship the list owner has with its customer list. The price charged for this service is around £50 per thousand, a share in the profits or a reciprocal deal. Care needs to be taken on the amount of times the list has been exposed to an endorsement.

18. Finding responsive names
The descriptions that list owners and managers use to promote their lists are essentially advertisements. It’s the background on the list that is often more revealing.

Discover how the people got on the list. Did they complete a free prize draw entry or have they parted with real money to buy a product or service similar or complementary to your own? In consumer mailings you will find it almost impossible to beat buyer lists, especially those generated by direct mail.

19. Reasons for being on a list
The more effort a person has made to get on the list the better the list will be:

A business book buyer is better than an exhibition attendee, who is better than a controlled circulation responder, who is better than a company director from a Companies House record, who is better than someone listed in a phone directory etc.

20. Publishers’ lists
Publishers mail their lists regularly so they should be very clean. Paid subscribers are better than non-paid and those recruited by direct mail are at the top of the pile.

21. Lifestyle lists
Mail order buyers nearly always beat compiled lifestyle lists. The data is expensive to accumulate so the temptation is for the data owner to rent it beyond its shelf life.

22. List sources
Apart from your favourite list broker, there are two major resources where you can look for lists: Lists and Data Sources (LADS) is a twice-yearly directory listing over 4,000 UK mailing lists and costs £90 an issue. List Link is a web based searchable list of lists costing £125 for three months. Go to www.list-link.co.uk for details.

23. List brokers
No qualifications are needed to become a broker and there are some dubious operators on the fringes of the industry. Membership of the Direct Marketing Association should be a minimum requirement when choosing a broker.

24. List owners
A good list of addresses could generate between £1 and £4 for each name in clear profit in the first 12 months. With these names a by-product of the main business, and with the very high margins, list rental can be a highly successful profit centre in any mail order company.

25. How to order lists
Work through these questions:
• List name
• Quantity
• Selections – geographical-sex-status (buyer etc)
• Exclusions – all past orders or just the last one?
• Flagging – always specify that you want the records flagged for possible future suppression
• Format – disk, tape or e-mail
• Layout – do you need title, initials/forename and surname on separate fields (always worth specifying along with postcode and country names on separate identifiable fields).
• Delivery date – most list owners need five days
• Delivery address
• Agreed price
• Net names deal if any (see note on net names)
• Payment terms if more than 30 days are required

26. Day of the week to mail
I have seen many tests conducted and have been unable to draw any conclusions as to the best day of the week to mail. There may be specific offers – such as gardening or DIY product mailings aimed at increasing store traffic – that may favour Saturday delivery, but most offers aren’t sensitive to the day of mailing.

27. Months of the year to mail
Here are my best guesses at how each month might perform for a non-seasonal product. 100% is the best response you hope to get:

January 100%
February 90%
March 90%
April 90%
May 85%
June 80%
July 80%
August 75%
September 95%
October 90%
November 75%
December 60% (unless in the Christmas gift market)

In the past most mailers avoided the summer holiday period. However, with people getting longer holidays from work, they can spread their holidays more. With fewer mailings in the summer, response goes up from the people who are at home.

Hilite Direct Marketing Services, Ash House, Ash Road, New Ash Green, Longfield, Kent DA3 8SA (tel: 01474 874848) Go here for the website for

Hilite Direct Marketing

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