How to Buy A Mailing List to
Increase Your Mail Order Business

Mailing lists can be grouped into two categories, compiled lists and response lists.

Compiled Lists

A compiled list means a list that is compiled from a database, such as the Yellow Pages. Companies like Info USA compile the Yellow Pages from all over the country into this one, huge database that has 13 or 14 million companies and many millions of consumers. Then, they sell that list, sorted however you need it: by type of business, by size of business, by SIC code.

For consumer lists, you can get sorts based on income level, based on residence address, based on male/female, black/white, kids/no kids. You can get people by their birth dates. You can get the owners of '67 red Corvettes who live in Fort Lauderdale. You can get an incredible amount of variety and variability.

Probably anything you can possibly think of, you can pretty much find. But those are compiled lists, they're compiled from some sort of database somewhere, and they're not mail-order buyers.

Response Lists

The second kind of list is called a response list. And, it is just what it says. These are people who have responded to some sort of direct-response medium. It could be a TV infomercial, mailing or a catalog that someone responded to and subsequently made a purchase from.

You can get data about these people sorted out in many, many different ways. If you want to sell something to people who like to fish, then find a catalog of fishing stuff, and you could probably rent that list, which has people who have bought what you're trying to sell.

So, how do you know when to use each kind of list?

When you want to sell something by direct mail, you'll do a lot better with a response list. Compiled lists are unlikely to do anywhere near as well.

On the other hand, if you're doing a lead generation mailing, you could use compiled lists or response lists, but if you need a narrow target market, you might find a compiled list to be better because it'll be more complete.

For example, if you're trying to sell to attorneys in Denver, you might be able to find a list of attorneys who bought something from a mail order business, but you might get less that 10 percent of Denver's attorneys that way.

With a compiled list, you can get all of them. If what you're trying to do is generate leads so that a salesperson can call on them, then you might find that you do better with the compiled list.

Another example where a compiled list is going to work best is for retail stores. If a retail store is trying to do a promotion and they want to reach the people within a few miles of the store, then it's very common to do a mailing to all the households within, say, three miles of the store.

Or, if you have a specialty store of some sort, then target those people who live within the distance shoppers come from to get to your store. That would be, again, a compiled list.

An Example Of Selling By Mail

Let's say you're selling an expensive putter, for golfers, and you want to sell them by mail.

You could get a compiled list of sales managers, figuring that sales managers make more than sales people, that maybe, sales managers or vice presidents of sales would be a good target, because they presumably earn more money.

You also figure that most of these sales managers are out playing golf all the time, so they might be great prospects.

Well, that might sound good initially, and if you're talking to someone who's trying to sell you a compiled list, that might be exactly what they recommend.

However, what if you got a list of the subscribers to, say, Golf magazine? Now you're not guessing whether they play golf or not. You know that, not only do they play golf, but they also like to play golf enough so that they bought a magazine about playing golf.

And, they bought that magazine by mail. So that means, they're not in the 30 percent of the people in the United States who never buy from a mail order business. So the Golf Magazine subscriber list would probably work way, way better than that compiled list of sales managers.

But let's take it a step further.

How about if we could find a list of people who bought a golf product by mail from some other company? Now, that's even better than the magazine. If you're selling a golf product by mail and can find a list of people who've already bought a golf product by mail, then that's even better.

But, we can get a step better than that. How about if they bought that golf product last month? Now, they're recent buyers of a golf product, and they're even more likely to buy from you.

And lastly: How about if the product they bought last month cost more than $200? Since your product is $200, if you can find somebody who bought a similar product that cost that much or more money, recently, then imagine how much better a response you'll get from that list compared to your list of sales managers.

It's a huge difference. You could easily have 10 times the response going from one extreme to the other, which can easily be the difference between your mailing working or not working!

You can find these response lists in the Direct Mail List Source book by Standard Rate & Data (www.srds.com).

Now that you are far enough along to consider testing, how do you evaluate which lists to test from the 32,000+ lists available? Keep in mind that even if you have the best headline, the best copy and an irresistible offer,

a mailing list selling steaks to vegetarians
is just not going to work.

The first thing to keep in mind is not to believe the rate card that gives you information about the list. A rate card is a sales document, and many people who don't know much about lists or about renting lists, look at that and that's all they read. They make a decision about whether to rent the list, or not, based on the rate card.

That's a big mistake.

You're not finding out what you need to know. Furthermore, some of the things on the rate card may just be flat out lies. They might say they have 50,000 mail-order buyers, when in reality; they only have 10,000 mail-order buyers, and 32,000 who inquired, but never bought.

If you don't know the right questions to ask, then you'll get taken, so here are the 15 questions to ask before renting a response list:

What Is The Size Of The List And The Cost-Per-Thousand? The reason this matters is you want to know how many names are there to roll out to if you do a test and it works. Think about it. If you have a list of 10,000 names, and you're going to test 5,000, the typical minimum order, your only roll out is the other 5,000.

Is It Related To Your Offer? Are the customers on the list you're renting, buying something similar to what you're selling? Don't try to sell steaks to vegetarians. Make sure it makes sense.

How Recent Are The Names? This is called "recency," meaning how recently have the people bought? This factor is so important that, normally, the lists are categorized by how old the names are.

Names can get tremendously out-of-date, and the response can drop in half, after they become a year old. So that's why they categorize the list by how old segments of it are.

If you ever hear the term "RFM", that means recency, frequency and monetary value. Many direct marketers consider those three the most important criteria.

What Did They Spend (Monetary Value?) Make sure if you are trying to sell something that you don't buy a list of contest entrants who didn't buy anything but are considered a response list because they responded to a direct response offer.

If you are trying to sell something, a list of buyers of that thing is better than a list of people who entered a contest to get it for free! Don't rent a list of buyers who spent $20 if your product sells for $300.

Are The Names Inquirers Or Buyers? If all the names are lumped together to make it appear that they're all buyers, then you need to ask about this. Make sure they really are buyers, not inquirers. Odds are, there are some of each and that's okay. You're definitely going to want to test with the buyers though, not with the inquirers.

Where Did The Names Come From? Are the names direct-mail generated, or did they come from another source? What you want to buy here is a response list, meaning it was direct-response generated. If the names are not all direct-response generated, then the list is not as good.

In addition to wanting to know where the names came from, you want to see a sample of the mailing piece, or marketing that was used to collect the names.

This is important because, even if the names were direct response generated, you want to know if it was a free sweepstakes they responded to or a catalog where they bought something.

Are They Multi-Buyers? Multiple buyers are people who have bought more than once. The list owner may have multi-buyers, but can you select by multi-buyers? They may not have that many of them, so they may not be segmented out.

If they can be segmented out, then you want to buy the most recent names that bought the amount you are selling, and also bought more than once.

Test the multi-buyers first, because, if the best people you can test don't work, then the others aren't going to work either.

What Selections (Or Sorts) Are Available? Depending on the size of the list, the selections, or sorts, may vary. Find out what selections they allow, like the person's job title, income or salary, other demographic or geographic criteria. The rate card may not even show all of the available selections or sorts, so ask.

Do They Have Psychographic (Lifestyle Factor) Sorts? If your target market can be better targeted using things like religion, politics, hobbies, things people like to do.

Does The List Have A High Duplication Rate With Your House List? That means, if you already have a customer list and you do what they call a merge-purge, which is to combine two lists and see how many duplicates there are, is the amount of duplicates high?

You might think that that might be a bad thing. But it isn't, it's a good thing.

Here's why.

If there's a lot of duplication between your customer list and the list you're renting, that's a good indication that the list you're renting is the same type of person as your customer list, and that's great. In fact, if you have a choice of three or four lists, then I'd pick the one that had the highest duplication with my customer list, and test that one first.

Does The List Have A History Of Repeat Mailers?Who else has rented this list? Ask them. Who are the mail order businesses who have rented this list? Did they test it? And then, did they roll out their tests? Did they then do it again? Did they repeat mail? Find out. Call other mailers and ask them how the list worked for them.

Do Your Competitors Rent The List?There again, unlike what you might think, that's a good thing. If your competitors have rented it, and especially if they have rented it more than once, then that's a sign it works. If it works for them, then it can work for you.

If The List Is A Buyers List, How Did People Pay? Did they pay up front with a credit card? Or was it one of those offers where you pay nothing until next year? Obviously, your better prospects are the people who just put it on a credit card, as opposed to people who aren't going to pay for two years, and then maybe default then.

What Is The Rollout Potential Of The List? I mentioned this before, referring to a test of 5,000, on a list of 10,000 leaving only a 5,000 rollout. Meanwhile, a test of 5,000 on a list of 100,000 has a 95,000 name rollout if the test works. All things being equal, the one with the larger rollout potential is the better list.

When Was The Last Time The List Was Cleaned? "Cleaned" means database updating. The statistics are that one-fifth of the population moves each year. Which means, if the list is a year old and hasn't been cleaned, 20 percent of the addresses will be outdated and not deliverable.

In the case of business addresses, especially with individuals at business addresses, 50 percent of that list can be obsolete after only a year. And that's not so much the businesses moving, but the people moving.

What Formats Are Available? There are many different formats for lists. You can get them on magnetic tape, disks, labels, labels with adhesive, or labels without adhesive, called "Cheshire labels."

One of the formats that you need to be careful with is when you're going to do a mail merge. You don't want the list to come in all caps, the post office approved format for automation mailings.

You're going to want to have upper and lower case lettering. Why? Because if you're doing mail merge and the person's name is printed in all capital letters in the middle of the letter, then it will look really obvious that it's not a personal letter.

You'll lose the whole effect. So, if you intend to do any personalization, make sure the list can be sent in upper and lower case.

How To Make Sure You Don't Get
Ripped Off By A List Broker

In a list company, the sales people who are selling you the list are frequently paid by how much they sell. This can be a big problem. Since their incentive is to sell more names, they may not give you the random test you asked for on your order, but a bunch of hot line names instead. They figure you'll come back for a big reorder then and they'll make more money than if your test didn't work and they got no reorder.

Aside from being unethical, this is bad because if you base your rollout on the data from these names, you'll get killed!

The most common reason a roll out of a successful test doesn't match the test results is because when you asked the list company to give you a random sample of a list to test, they gave you hotline names instead. Even if you asked for a random sample or what they refer to as an "nth name select", meaning, if you want 5,000 names from a 50,000-name list, the nth name means they give you every 10th name.

The problem is that you cannot tell if they did it right or not. How are you going to tell by looking at the list whether it's an "nth name select" list or whether it's hotline names? There's no way in the world you can know.

So now, what are you going to do? To keep from being ripped off, you have to be able to tell whether the list company did what they were supposed to do, or the nth name selection isn't going to do you any good.

So how can you tell?

A direct mail guru I know, Marty Chenard, came up with the idea to look at the first letter distribution of people's last names. When I did this with the Denver White Pages, I went through and counted the number of pages where people's last names start with each letter.

There were 1,685 pages in the White Pages, and I counted them all up by what page each letter started and ended on, and, in Denver anyway, the letter "S" is 10.44 percent of the total names. The letter "X" is .01 percent.

So what you do is, instead of asking for nth name or random selection, you pick the percentage that matches the letter, and ask for all the names starting with that letter. Now it's easy to tell if they do it. If you asked for everyone with a last name starting with "P," then just look at the list and you can tell.

Let's say you have a 150,000 name list and you want to test 5,000 of those. When you do the math that comes out to be 3.33 %. When you look at your chart below, you'll see that the letter "F" represents 3.38 % of the total.

So now, instead of asking for an nth name or a random selection, you ask them to give you everybody whose last name starts with "F". This should still be random, but guess what you can do now? You can just glance at your list, and if everybody's name doesn't start with "F", then they did it wrong.

So this is a way to make 100% sure they don't mislead you with hotline names. If you need more than 10.4% for your sample, add up whatever letters total the percent you need and order your names that way.

Distribution Of Population In Denver By First Letter Of Last Name

For More Information Contact:

Joe McVoy
Profitable Marketing Systems, LLC
1100 Nautilus Court
Lafayette, CO 80026
Web: www.ProfitableMarketingSystems.com
Email: Joe@ProfitableMarketingSystems.com
Phone: (720) 890-8760
Fax: (303) 604-6839

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© 2006 Profitable Marketing Systems, LLC