Today, more and more marketers are returning to direct mail.
Whether it is to sell product off the page, generate leads, direct potential customers to a retail outlet, or lead new visitors to a website, direct mail works.
As a copywriter, I need to know about the lists my packages will go to… the better I understand my audience, the better I can target my message.
If you are coming around to the realization that direct mail needs to a component of your marketing campaigns, then you need to know about lists.
I don’t exoect you to become an overnight expert, but if I can reveal some of the basic details of the list business to you, you can make smarter list renting decisions.
If you rent lists for your promotions – postal lists or email lists, telemarketing lists, compiled or response lists – you MUST read this blog.
It's amazing. You read a datacard and the description of the list that you're planning to select appears to be a perfect match to your customer profile. You rent 5,000 names and mail them. Your mailing is a disaster! What went wrong?
You immediately double check the datacard - yes, it still looks right. You call your list broker and ask: "did they ship the right names?" The list broker checks and says: "yes they shipped the right names."
So now you're left with the question: Why do some lists work, and others do not?
What criteria are important when selecting a list for testing? I've compiled factors that can and should be used when deciding whether or not to test a list.
For years we've talked about RFM: Recency, Frequency and Monetary. And these are unquestionably critical elements in list analysis. But there are many, many others. Depending on your offer, some will be more applicable than others. But each of these elements will impact on why some lists work to your offer, and others do not.
The more "alike" the prospect on the mailing list you are considering is to your customer, the better the success you will have. So the first thing you must do is to figure out what your current customer is like; including what kind of offer you originally sent to them that converted them from a prospect to your customer.
Let's start looking at what will make a list work. Depending on your offer, the importance of these characteristics will vary.
1. Is the list owner renting your list? One of the best signals that a mailing list will work for you is that the list owner is renting your list. Conversely if the list owner tested your list, but did not continue, there's a good chance his list will not work for you either.
2. Are the prospects within your defined target market? You might have a datacard that, at first glance, describes a list that's very similar to your best prospects. But, you must look deeper. For example, a wealthy homeowner in an urban area, who spent $500+ on a mail-order product, is still not going to buy your snow blower, which is only practical for someone with 2 or more acres of land.
3. Gender. Is there a gender prejudice to your offer? What percentage of your list is male? If your offer is predominantly male, is the list you're looking to rent overwhelmingly male? If the list is 50/50, that does not mean you can select just the male names. If you're selling a 'macho' product, and you select just the male names from a list that is only 50% male, there's a good chance your offer will bomb. Why? Because the nature of the offer that the outside list responded to may not have been macho enough. So looking for "male" lists is very different from selecting males from a male/female list.
Check the gender, does it make sense? If you're in the business opportunity area, for example, the typical list will contain 70%-80% male names. If the datacard shows the male/female breakdown is 50%/50% the list is probably a 'work-at-home' product, irrespective of what the datacard language says. You can use the gender as a reality check.
4. There's a difference between demographics and the type of purchase. A 900-number psychic reading company might generate an average order of $90. But the average age is probably 34 and the average income is $28,000. A datacard showing an average order of $90 might sound terrific for a high-ticket offer. You must study the actual nature of the offer that was made to determine if it is a 'fit' for your-ticket proposition.
5. How did the people pay? Did the buyers on the list you're considering pay by check or credit card? Did they respond to a soft, 'send no money now' offer? Did they call an 800 number? If you're making a cash (check) offer, renting the names of people who bought using a credit card will significantly hurt your response.
6. Seasonality is different from recency. Everyone talks about 30-day hotlines. The hotter the better. Many people are renting names on a weekly basis. However, your offer might be impacted by seasonality. For example, if you're sending out a Christmas offer, you'll probably be better off renting the names of people who responded to a Christmas offer last year, than a 30 day hotline. If you're selling seeds in the pre-planting season, you're probably better off renting names of seed buyers from last year's pre-planting season rather than names of people who just bought 30 days ago.
7. New to File or Repeat. When you think in terms of recency, differentiate between new-to-file names and repeat buyers. If someone bought from Land's End 150 times, what are the odds that they are going to become your client? However, if they just sent in their first order to Land's End, that means they're willing to 'try something new', and they would probably be an excellent prospect for your offer.
8. What is the nature of the proposition? Are people buying as a result of a $10 million sweepstakes? Are they buying because they also get a half-dozen mystery gifts? Is the list you are considering renting highly promotional? If any of these are true, your straight, no frills, no sweepstakes offer is probably not going to work.
9. Dollar Value. Carefully check the dollar value of the buyers on the list you're renting. It's almost impossible to get $200 out of a $2 buyer. If the average order is $25 - and you've got a $100 offer - find out if you can select the higher priced names. If not, you'll probably be better off not mailing that list.
10. What were the terms and method of payment on the list you're renting? Was it 'send no money now, we'll bill you later?' Was it a free trial? Was it pay 4 equal installments of $12.64? Even though these people made a $50 purchase, that doesn't make them prospects for your $49.95 cash-with-order offer. Can you select by offer? Can you select only those who paid, and suppress the deadbeats?
11. What is the income and socio-economic status of the list? A $50 purchase isn't as important as whether this $50 purchase was a necessity item as compared to a discretionary or luxury item. There's a huge difference between someone who bought 3 pairs of slacks for $50 versus someone who spent $50 for a box of chocolates. If you're selling a product that appeals to people in a specific socio-economic group, be sure the lists you're renting contains names of people in this same group.
12. What impact does the presence of children make? If you're selling a children's toy, it's easy enough to find toy buyers. However if you're selling a juvenile life insurance product, presence of children is critical and it might be harder to ascertain from simply reading a datacard.
13. What is the length of residence of the people on the list? The longer the person lives at a location, the more conservative, and the less likely to try something new. That's one of the reasons why 'new move' names work so well for a wide array of products and services.
14. Are they homeowners or apartment dwellers? Surprisingly enough apartment dwellers often outperform homeowners on many tests for a wide variety of products and services. For example, renters often respond better than homeowners to offers of low cost insurance.
15. What is the marital status? You might be surprised by the difference in response, and it's often exactly the opposite of what you'd expect. But if a list is not performing up to your expectations, this is certainly something worth investigating. An example here is life insurance. Single people often respond as well, or better, than married people, even though married people often have a greater need.
16. What is the churn on the list? Churn is defined as a lot of activity, in this case, a list being mailed many offers. If you're mailing to credit based lists you want to see a lot of activity. The more activity on a file, the better the response will be to most offers to that file.
That’s the end of Part One of this post. Next, I will ask and answer 20 more questions that you need to understand to make your promotions work better.
Peter T. Britton,
Idea Generator. Wordsmith. Resultant.
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