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.

Coming soon! To a mailbox near you! The next Great American Make-Over! Starring: The United States Post Office!

Not unlike the popular TV show in which a busload of contractors arrive at a home of a deserving-but-beleaguered "every family," intent on re-inventing the dilapidated structure (while sending the gob-struck family to Disney World for a week), the USPS is starting a dramatic make-over of its own. But without the diversionary trip to Disney.

Not unlike the TV show, the heroes in the rock-star bus do not show up until the last second, when the inhabitants are at its collective wits' end.

Not unlike the TV show, no one really knows what the outcome will be until later. And no one truly knows if folks will like what they get.

While not beset with awful diseases like these TV families, the USPS is seriously ailing and needs help fast.

Acknowledging that its current business model is unsustainable, USPS management cites huge declines in mail volume (thank you, internet and email)...as well as expensive-to-maintain, but probably-no-longer-necessary facilities...the folks who work (or don't have enough work to keep busy) in those underutilized facilities...and the dreaded Congressionally-mandated retirement pre-funding.

The cumulative effect is that the USPS has been saying if things are not resolved, they will be insolvent by September 30th.

Cue the bus. It's time for triage.
The USPS has manfully tried to forestall the current situation. Since 2006 it has closed 186 facilities, deep-sixed 1,500+ pieces of equipment, and decreased staff by more than 110,000. Result: $12 billion saved.

Good start, but not enough.

Realizing that it needs to save $3 billion (that's billion with a "B"!) a year, the USPS is considering closing or merging 250 more processing facilities, reducing equipment by another 50%, decreasing the transportation network, and eliminating up to 35,000 more jobs.

Ouch!

So what does this mean to those of us who mail to promote our businesses or non-profits, and hope to see mail in our mailboxes when we get home every night?

#1. Time delays. Fewer people and less equipment could mean delivery delays. The USPS Standards of Performance tell the tale:

Standards of Performance
	Today	Proposed
Priority	1-3 days	1-3 days
First Class	1-3 days	2-3 days
Periodicals	1-9 days	2-9 days
Standard Mail	3-10 days	3-10 days

OK, that's not too bad, all things considered. But what about...

#2. Postage increases. Count on it. Stay tuned.

#3. Closure of local post offices. Absolutely. Non-profitable locations—mostly in small towns—are already packing up.

#4. Procedural changes for mailhouses. No doubt. But exactly what and when is still TBD. Among the items on the table are:

• Reduced points of entry for dropshipped mail
• Rate changes in zone-based mail
• Schedule shuffling to meet required "in home" dates

So when will this take effect? September 30th is, after all, just days away.

Protocol requires that the USPS (1) put its proposal out for public comment. That happened on Thursday, Sept 15th. Then the USPS (2) asks the Postal Regulatory Commission (PRC) for approval. The PRC (3) considers, then proposes. A "reasonable amount of time must pass" before the USPS implements any nationwide service change (4).

Using the debt-ceiling debaters as a role model for bureaucratic efficiency, the USPS hopes to have its proposal presented to the PRC (step 2, above) by the end of October—one month into its insolvency.

The PRC is expected to respond by—well, we really don't know. But the USPS says it hopes to begin its consolidation and constriction efforts (step 4) by February or March of 2012. Only six months after its September 30th deadline for insolvency.

Adding more stress: The economy is showing few signs of recovery. The Super Committee (Debt Ceiling Part 2) isn't making headway yet. And the American public is understandably antsy.

Cue the bus! Disney World is looking better by the minute.

Psst! I'm talking to YOU! Almost 8 hints to cut through the noise

Machines run our lives today. They ring. They beep. They vibrate. They unfailingly demand our attention. And if you're like most of us, you readily give in to their insistent electronic demands. That we can still function despite all the electronic distraction is a testament to our capacity to multi-task.

Multi-tasking is both an amazing intellectual skill unique to humans and the bane of a marketer's existence. For to be successful in marketing, you've got to get someone's attention. And that means cutting through all the cacophony of electronic noise that fills heads today.

As a marketer, you know the first challenge is to make your message heard above the noise...to make people stop, listen and respond to your message. But it isn't as easy as it sounds. "Psst! I'm talking to you!" has never been more difficult.

But hey! You're in marketing, and you're up for a good challenge. So here are a few techniques to help you combat the multi-tasking madness:

1. Repetition. If they don't hear you the first time, say it again. How many times a day do you hear ads for McDonalds? It's about getting someone's attention and cutting through the clutter. And coincidentally about selling a burger or two.
2. Choose your Audience carefully. Studies show that 40% of your success is based on the list you use. If the audience is wrong, your message—even a brilliantly creative one—will fail.
3. Personalization. Catch your recipient's attention—at least momentarily. Call them by name. Refer to their last purchase/donation by date or dollar amount. Mention their hobby or passion. Make your message about them. After all, everybody likes to talk about themselves.
4. Timeliness. Make your message pertinent to your recipient. It is no coincidence that Super Bowl ads often have football themes.
5. KISS it. Keep it short and simple. Attention spans are shortening. Recipients only have so much time they will expend on your message. They've got to get back to their texting, after all.
6. Make it amusing. They may not have much time, but everyone likes to laugh.
7. Experiment. If your message or audience isn't suited to one media, change your message, change your audience or change your media. Find the combination that yields best results, then "work it."
8. Repetition. Successful marketing today is a lot like voting in old-time Chicago. Market them early and market them often. And yes, I am repeating myself.

You get the picture. Marketing in this noisy environment is not for the faint of heart, but there are techniques that will make you more successful.

I could go on, but Dancing With the Stars is starting soon, I've got to check my email and the phone is ringing.

I know you understand.

Do you want Tea or Coffee? Multi-tasking makes it tough on marketers

Anyone who has a kid (or a wife/husband, for that matter) will understand. Ever ask a simple question ("Do you want tea or coffee?") and get "uh-huh" or "Yes, Mom" for an answer?

Someone didn't hear, wasn't listening or was probably multi-tasking. Maybe all three.

Our brains only have so much capacity. But ask a tricky question (Tea? Coffee?) of someone whose mind is focused elsewhere (football? Grand Theft Auto?) and you can expect a lot less than their full time and attention.

Consider this: a report from the University of California at San Diego says that in 2008 Americans spent 1.3 trillion leisure hours consuming information. That's leisure hours! Or 12 hours per day every day for each one of us.

Since we typically use 9 hours at work (or enroute) + 8 hours in sleep and the length of the day is still 24 hours, we are cramming 12 hours of information processing into the 7 remaining hours, assuming we do nothing else. No eating. No exercising. No shopping. No showering. No walking the dog. Nothing else. Just processing information.

We do it by multi-tasking.

Watch TV and check your email—that's multi-tasking. Multi-task for an hour, and you earn 2 hours in the UCSD study. Play video games and listen to music all Saturday afternoon, while texting your friends regularly and you'll really rack up the hours. See how easy it is?

UCSD says we each spend 5 hours in front of the TV per day...2 hours with the radio...2 hours on the computer...1 hour gaming...36 minutes reading print media and 27 minutes listening to recorded music.

No wonder a deeply philosophical question like Tea or Coffee gets lost in all the noise!

All this noise presents an immense marketing challenge. As the media options expand (remember, in 2008 there was no Wii, no I-pad, no Droids or i-phones, and FaceBook and Twitter were just getting a head of steam) our challenges will only increase.

What are you doing to get your message heard through all that jumble of noise?

I'd love to hear from you! If you can spare the time away from Pandora.

Bulking Up First Class Mail?

The USPS, which has been hemorrhaging money for a decade or longer, is desperate to keep mail in the mailstream. Beset by reduced volume (thank you, internet, email and the economy), rising manpower costs (thank you, ballooning retirement fund), an aging infrastructure and too many facilities, the USPS is creatively looking for ways to reduce cost and increase mail volume.

To that end, the USPS has offered postage-on-sale promotions for the last 2 years that have been widely popular among their target groups. For instance, most recently the USPS announced that business mailers using a QR code in July or August of 2011 could receive 3% off First Class or Standard postage rates.

And now here's the latest thinking: Mailing the 2nd ounce of First Class mail for the same price as the first ounce.

Not bad, eh?

Consider the price difference between First Class and Standard mail: Three letters mailing at Carrier Route Saturation Standard rate equal approximately the cost of mailing one letter at First Class. Hence, it would seem logical that encouraging First Class mail usage would be a no-brainer for the USPS.

Less work. More money.

Today a letter weighing up to one ounce costs 44 cents to mail; the 2nd ounce adds 20 cents. That means in a letter you can get approximately 4 sheets of paper (or 3 sheets and a reply envelope) for the first 44 cents; but go to one more sheet of paper—even a tiny little lift note—and you're staring at an additional 20 cents.

But at Standard you can mail up to 3.3 ounces for a much lower price. The weight differential is huge. In today's postal pricing structure, heavier packages almost always have to mail at Standard as the price difference is punitive.

But it's not just about money. It's about time. First Class is delivered in 2-3 days; Standard can take 2 weeks. If your hair is on fire because you botched your pre-event planning and your event is now two weeks away, you may have to mail at First Class. Cost be damned.

It happens all the time. Just ask me.

So if the USPS is willing to allow that 2nd ounce for the same price as the first ounce, maybe—just maybe—more mailers will use First Class. And maybe—just maybe—the USPS will benefit by higher mail volumes.

Best yet, because it is not a rate increase issue, the proposal doesn't require an Act of Congress or the Postal Regulatory Commission to approve it. Hence, it should be do-able with a minimum of fuss.

Making this happen would require very little—if any—additional cost to the post office. After all, it takes no more labor to process a heavier letter, and it requires no more machinery.

Now consider who wins—in addition to the post office:

1. Printers win. They could print more materials.
2. Paper companies win. They could sell more paper.
3. Mail houses win. They could process more mail.
4. Equipment manufacturers who serve the printers and mailers win.
5. Mailers win. They could mail more materials for the same price.

Who loses? I can't even think of a loser. It's a win/win all around.

The Post Office Board of Governors is considering the idea as I type. How long those considerations can take is TBD. If they give it a quick approval, it could be put into effect this Fall.

Just in time for the Year-in-Review family newsletters that go out at the Holidays.

So you think you've got it hard now? IRS eliminates 14% of nonprofits

With a click of the computer, the IRS has trimmed 275,000 nonprofits—or about 14% of the national total—from its roster of tax-exempt organizations, claiming that the organizations had not filed legally required documents for three consecutive years.

Three years??! Now that's a Big Oopsie! They shoulda oughta known.

While some of the de-listed groups are doubtless defunct, most are small charities providing vital services to their local communities, including food banks, clothing distribution centers, art centers, abused women counseling, resume' preparation assistance, abandoned animal rescue and fostering, and help to injured firemen, policemen or veterans. Especially at risk are very small nonprofits with annual revenues under $25,000.

Wait a minute! These are the "below the radar" groups who are repairing the shredded safety net in our communities every day. They make life livable for thousands of our neighbors!

Because of their small size and limited staff, (who are busy doing the work we've asked them to do!) many of these groups may not be aware that they have a three-year filing requirement (enacted by Congress in 2006 to better track groups claiming tax-exempt status). Congress gave micro groups three years to comply; larger groups must file annually.

Hold on! 2006? That was a whole different landscape. We need every possible do-gooder on the scene now to help those affected by this intractable recession.

So as to not appear cold-hearted about the public whacking, the IRS is offering to assist groups that are still active regain their tax exempt status.

Groups that find themselves de-listed can apply for retroactive tax-exempt status. Applying can cost as much as $850, but the fee can be reduced for small groups with legitimate reasons why they failed to file in a timely fashion. (Too busy serving the community during the worst recession since 1929? That works for me!)

Larger groups seeking retroactive reinstatement may not see as much generosity of spirit from the IRS.

These words were hard to type and may never leave my fingertips again: Thank you, IRS. These groups are vital to the wellbeing of millions of Americans. Any assistance you can provide is appreciated.

And here's a final word to my generous readers: If you donate to one of these groups, your gifts made after de-listing will not be tax exempt. At such time as the group is reinstated, then your generous gifts once again became tax exempt.

Doing it By the Numbers...

If a picture is worth a thousand words, sometimes a few statistics can trigger a million thoughts. To wit:

52%. Percent of total US mail volume that is direct mail.

$45.2 billion. The sum US businesses spent on direct mail in 2010—a 3.1% increase over 2009.

$48 billion. The projected expenditure in the US for direct mail in 2011—a 5.8% increase over 2010.

149 million. The number of addresses to which the USPS delivers mail.

171 billion. The number of pieces of mail delivered by the USPS in 2010.

$5.2 billion. The estimated amount in fundraising driven by non-catalog direct mail in 2010.

13.5 billion. The number of catalogs mailed in 2009.

15% and 12%. The percentage of consumers receiving respectively a catalog or a letter/postcard/flyer who then made a purchase on the company's website.

28%. The additional sum spent by individuals who received a catalog compared to individuals who did not receive a catalog.

43%. The number of B to B campaigns that fall in the 5,000 to 50,000-piece range.

33%. The number of B to B campaigns that fall in the 1,000 to 5,000-piece range.

391,000. The average number of pieces of mail processed at the USPS per minute. That's 23 million per hour and 563 million every day, in case you're curious. And yes, I know this number doesn't tally with the 171 billion number quoted earlier. It's another example of how statisticians and their numbers lie.

41.5 million. The number of address changes in 2010.

40%. Estimated percentage of new movers who changed addresses for economic reasons in recent years.

98%. The percent of consumers who collect their mail every day.

77%. The percent of consumers who sort through their mail immediately upon arrival.

3.1 million. The number of individuals employed in the direct mail industry.

A penny. What I'm willing to pay for your thoughts after reading these statistics.