Name that Tune!

List brokers are singing the blues. Competition is vicious; rental volume, blamed variously on the weak economy, jittery clients and postal increases is down; prices—which do seem to obey certain inviolate economic laws are down; ultimately commissions—the lifeblood of list brokers and managers—are down.

All in all, it's truly a downer. In years of being in direct marketing, I have never seen so many emails from list mavens desperately hawking lists, offering to make free recommendations, or to put lists "on sale" to get my order.

As striking as the situation appears to be, the pain is not felt evenly across the list rental market. Specialty subsets within the larger list industry are faring better or worse than their peers. Here's a quick view of what's what, according to information just released by Worldata, one of the largest list brokerages in the world.

Attendees/Members, Public Sector and Donor files are the only categories of lists that have increased in price since 2006. They have seen increases of $16/M ($16 per thousand records), $12/M and $2/M respectively.

Donor files remain the lowest priced list category, with an average rental price of $85/M.

Permission-based email lists have gone from $290/M in 2005 up to a high of $299/M in 2008, dropping slowly to their current average rate of $269/M. Even with the drop in price, this category of list remains the most expensive domestic category.

Permission-based consumer email lists fell 49% in cost over the past 5 years. Why? The market is oversaturated. Too much supply; too little demand.

Permission-based international email lists have remained stable, with a continued average price of a whopping $407/M.

Permission-based Business-to-Consumer email category saw the largest price decrease year over year, plummeting 20.54% since 2006 to today's $89/M.

The highest percentage increase was in the Attendees/Members list category which saw a very modest 1.54% increase in price year over year.

So what does this mean to a list broker? Simply put, it means pain. Intense economic pain. List brokers are desperately looking for ways to differentiate their lists from the pack, even as margins get tighter, the rental market shrinks, and competition gets increasingly fierce. Times are bleak.

What does this mean to you, a list user? It means you may have just gotten lucky. Most list brokers are hungry. They are willing to reduce costs, accept lower minimum rentals, multiple use for a one-time use fee, or strike other deals with you to get the sale.

But those deals still do not include turning over lucrative opt-in email lists to the end-user. It's a line the legitimate list brokers/managers/owners are not prepared to cross.

Times are undoubtedly tough in the list industry. As a list user, you can expect brokerage consolidation soon. Expect to see marginally performing lists disappear off the rental market. Expect new selects that will help you dig down to find exactly the right people for your project. Expect new "hidden fees" for "special services" to emerge. And expect prices to keep moving around.

On a less upbeat note, you can expect a plethora of fly-by-night operators who offer a terrific-sounding product for an amazingly low price. If the offering price seems too good to be true, (I've seen offers of 100,000 records with full postal and email information for $99!), then it probably isn't true. Walk away. Don't let opportunistic predators into your wallet.

The list industry is in a bit of an upheaval right now. "Hard Times" to be exact. And that's the name of that tune.

Get Personal. Get Results. (Part 2 of 3)

Get Personal. Get Results.
Part 1 Part 2 Part 3 Part 4

Personalizing Prospect Marketing

First, a definition.

Everyone starts as a prospect, ie someone that a marketer believes might donate/buy/subscribe/join/attend or in some fashion show interest in the sponsoring non-profit/company/magazine/organization, etc.

Not all prospects are created equal. To paraphrase George Orwell, some are more equal than others. Hence the first challenge is to find the right people who might want to donate/buy etc. That effort is called “prospecting.”

Looking for prospects starts with a definition of your optimal buyer. Then you define and refine until you get a many faceted profile.

Like grizzled 49ers of old prospected for gold in them thar hills of California, today’s frazzled marketers prospect for gold in the thousands of lists on the market. With the right list and the right approach, the marketer finds his gold.

Finding good prospects just starts with list selection.

Looking for donors? Go to donor files. Select donors to allied organizations. Simple. Or maybe not.

Looking for business owners? There are a thousand lists. Drill down through company size, gender of owner, location (and number of locations), industry sector, number of employees, type of organization (franchise, LLC, Inc, privately/publicly held, HOBO, etc) to find the list you need.

Now you can use the new technology of “data mining” to get even further into the prospect’s head.

Are you asking for the donors to support a non-profit summer camp for indigent children? Women would probably be your best prospects, and women with children would be even better. Families with household income over $xx would mean the family has expendable income to share, and those who have shown their love of nature and support for children’s causes would improve your “hit” rate.

If you’re looking for business owners who travel a lot, maybe those with multiple office/plant locations would be a starting point. If they have a second home, that’s a plus. If they are pilots or sailors, that helps define them as well.

Now you’re finding out what really makes these people tick.

Simultaneously with extracting the gold from the lists, you need to develop creative copy and design that maximizes the impact of your message. Find out what their individuals needs and interests are, then design your message to emphasize those issues.

New production technologies allow for variable full color graphics and copy. Here is how a few companies are using the latest in personalization technology to enhance their prospecting efforts...

Case Study #1. The exclusive mountain resort community. They sent oversized postcards to married couples with household income over $xx, in a specific geographic region. Artwork was based on the recipient’s ethnicity, age and hobbies.

If the recipients were Caucasian, 40-60 years old, so were the models. If he liked golf and she liked tennis, the male model had golf clubs in his hands; she had a tennis racket in hers. They stood in front of the magnificent clubhouse with a world-class view of receding mountains.

The graphic designer used the recipient’s name in color to eye-catching effect, thus creating a split second opening for the recipients to soak it all in. It wasn’t much of a stretch for the targeted couple to see themselves in the picture as it spoke directly to them and their interests.

Case Study #2. The Long Term Care Insurance provider. His marketing package utilized variable art and copy based on the recipient’s age, gender, ethnicity, physical location, and household income. The photo showed a couple waking on the beach with the statement “Now is the time to think about Long Term Care Insurance.”

The copy speaks to women by name as they tend to outlive their husbands and therefore need this product more, and because women make 70% of insurance decisions for their households. “Hypothetical” tables based on the couple’s age and income show what a plan could cost—and could deliver.

Case Study #3. The real estate agent. In an economy that had produced zero house sales for her the previous year, she opted to mail renters telling them to stop wasting rent money and buy a home.
The renters, selected on geographic proximity to her office as well as their household income, got an oversized postcard showing a photo of a home with a curbside mailbox. The home was in the background in soft focus; the mailbox was center front and crisp. On each mailbox was the name of the targeted family: Ramirez, Wong, Williams, Curtis. Subliminally the recipients could “see” themselves in this picture, in their new home.

These three examples show how the newly available filters can help inventive marketers position themselves in unique ways, to people who are specifically qualified for those messages. All three were working with prospect lists, using new technology and fresh creativity to stand out in the mailbox.

Are these individualized approaches more expensive than a traditional one-shot-fits-all marketing approach? Yep. Each individually prepared piece has a different mix of graphics and copy going to highly selected and qualified targets. That effort does have a price.

Are these personalized approaches more successful? Yep again. People see themselves and they respond.

The result: companies mail smaller quantities and get the same number of leads.

Technically, this extreme personalization process is called VDP or Variable Data Printing. It requires lots of computer power, marketing expertise and a precise mix of people and equipment to pull it off.

However, unlike shot gun marketing, with VDP you can approach only people that you know are the perfect target for your message. So you print less (that’s good green business practice), pay less in postage (that’ll keep the bean counters happy) and generate a higher return rate (that’ll make the boss ecstatic).

As the pharmaceutical ads say, VDP isn’t for everyone. It’s more expensive, it takes more time in development, and it can be nerve wracking waiting for the creative and data processing and programming to come together. But when it works, it’s amazing!

It’s state-of-the-art direct marketing. Until the next new-best-thing comes along.

Part III of this series focuses on personalization in housefiles.

Part 1 Part 2 Part 3 Part 4

43670 Trade Center Place, Suite 150, Dulles, VA 20166

Phone: 703.996.0800 Fax: 703.996.0888 1.866.365.2858

www.paulandpartners.net sales@paulandpartners

Get Personal. Get Results. (Part 1 of 3)

Get Personal. Get Results.
Part 1 Part 2 Part 3 Part 4

If you’re thinking this article is another how-to guide with sure-fire tips to success in the sack, you’re wrong. So sorry to disappoint.

But if you think this article is how to make your direct marketing better, then you just got lucky. Read on!

Creating effective direct marketing is a lot like dating.

In dating, the more you know about the individual you’re going out with, the better your date can go. You know what to say, how to say it, and when to shut up and listen. A good date necessitates 2-way communication. As you learn more, you get better and better at communicating with the other person. A relationship develops.

Similarly, in direct marketing, the more you know about the individual recipient of your message, the better and more targeted you can make your approach to him or her.

Suppose you care passionately about a park proposed for your community. You decide to send a letter to everybody in 2-mile area asking for support. That is shot gun marketing. Not everyone is a donor. Not everyone cares. Even the small fraction of people who are donors may not care a whit about your park. It’s rough out there, Baby.

But send that same message to those people who are most likely to agree with you, and your success rate increases exponentially. Who are these folks? Bicyclers, campers, hikers, bird watchers, nature lovers of all stripes. They are your go-to constituency.

Blind dates and non-targeted “shot gun” marketing both have the same abysmal result: They are expensive, frustrating, usually doomed to failure. There has to be a better way.

While people who continue to go out on blind dates get what they deserve, marketers have indeed found a better way to find out whom they are approaching.

But first, a brief history of getting personal in direct marketing…

50 years ago, the height of getting personal in marketing was using the recipient’s name and address in ALL CAPITAL LETTERS. All of us over a certain age remember getting letters that read in part

Dear WILLIAM E. JOHNSON,

The WILLIAM E. JOHNSON household is one of the few households in
SEVERNA PARK, MARYLAND receiving this letter…

In this Pleistocene era before computers became ubiquitous, this ALL CAPS stuff was sophisticated marketing. Recipients had never seen their names in print, much less their city and state. It stopped them in their tracks. It was revolutionary. It was wildly successful. For a time.
The quirky ALL CAPS novelty wore off quickly, so then marketers went to less obvious upper/lower casing. But the information content was unchanged. For years all marketers had to work with was the recipient’s name and address. We needed help.

In the 1960’s lists got more sophisticated. Soon 35,000+ lists were on the rental market, with each list purporting to be the absolutely best list available of people with some common interest or need. This was an improvement. Marketers could at least select recipient lists based on some common criterion.

But even that improvement was not enough. Not every list could be absolutely the best, nor even relevant. After all, one of the best producing lists of all time was a list of households that owned vacuum cleaners! What did owning a vacuum have to do with the price of tea in China?

OK, it wasn’t great, but it was getting better. We could at least choose our lists based on donor history, magazine subscriptions, membership in clubs and associations, and other general indicators.

Still, marketers only had a minimum amount of generalized information about the target group as a whole. Even with the advent of “selects” which allowed us to “drill down deeper” we lacked specificity about the individuals who comprised that amorphous whole.

The revolution began with the advent of inexpensive computers in the 1970s and 80s. As more organizations could afford computers (remember at the beginning of time, computer time that is, world experts predicted that only 24 computers could run the whole world!) the rules changed again.

Companies and organizations could keep their own data. They could keep it in greater depth, tracking such things as most recent donation/purchase and highest donation/purchase. There was a gleam in marketers’ eyes as we saw the possibilities.

It was another big improvement when we got selects for gender and implied age on consumer lists. It helped even more when we got selects for job title, company size (by number of employees or annual billings), and industry type on business-to-business lists.

Sure, we had some idea of who these people were and what they wanted/believed in/bought into (that’s what put them on the list probably, and what list research is supposed to ferret out, after all). But we also knew that good marketing copy is written by one individual to another individual. It’s one-to-one. It’s about being personal.

We needed more. And in just the last few years we finally got what we needed.

Today, there are dozens of data “filters” through which we can run lists to “data mine” the demographic and psychographic composition of the list.

OK, that’s a big mouthful. What it means is that finally we can determine the gender, age, marital status, ethnicity, language preference, household income, homeowner or renter, presence of children, personal interests, hobbies, credit worthiness, religious and political affiliations of individuals on lists. And that’s just for starters!

Filters can help determine education level, likely profession and level within that profession, as well as the car they drive and the music they listen to. We may know more about them than their Mothers!

What can we do with all this info, really? The goal is to take this new-found knowledge and use it well.

Part II of this series addresses what some innovative marketers are doing to use personalization in their prospect mailings.

===

Get Personal. Get Results.
Part 1 Part 2 Part 3 Part 4

43670 Trade Center Place, Suite 150, Dulles, VA 20166
Phone: 703.996.0800 Fax: 703.996.0888 1.866.365.2858
http://www.paulandpartners.net/ sales@paulandpartners