| According to the Direct Marketing Association, on | | | | Response lists, especially among those who are |
| average, direct mail returns ten dollars for every dollar | | | | shown to respond, can produce higher response rates |
| invested. However, as noted earlier, the most pivotal | | | | – thus justifying the higher price. Both types of lists |
| element to direct marketing Success is having the right | | | | are not always available for all audiences. So a little |
| list. What does it look like? Where does it come from? | | | | research may be required to determine what is |
| Where do you start? If you are prospecting for new | | | | available for your target market. Once the correct |
| customers you will probably not have their names. But, | | | | type of list is determined the next step is to decide |
| names of qualified prospects are available through list | | | | how many names are required. This comes back to |
| compilers and brokers. However, to buy mailing lists it is | | | | your direct mail marketing plan. First, decide how many |
| essential to know what your best prospective | | | | customers you are trying to acquire. The answer is |
| customers look like. That’s where your house list | | | | not as simple as “as many as possible”. |
| comes in handy. Scanning through your house list you | | | | Consider how many responses you can handle. If the |
| can identify the traits that are common among your | | | | goal is to have customers call you, and you only have |
| best customers. For example, you may find that your | | | | one person to answer the phones, then you probably |
| best customers live within five miles of your business | | | | don’t want 10,000 prospects calling you at once. It is |
| and have incomes of more than $75,000. This | | | | a simple rule of marketing that the further you get |
| demographic information will help you purchase a list of | | | | from the initial point of contact with your prospects the |
| customers that will buy. There are two main types of | | | | less likely they are to buy. Thus, you only want as |
| lists that can be purchased: compiled lists and | | | | many prospects as you can service at any given |
| response lists. Compiled mailing lists are comprised of | | | | moment in time. Similarly, if you have a restaurant that |
| information from public records and sources such as | | | | only has seats for 100; it doesn’t make sense to |
| the phone book, courthouse records, bankruptcy filings, | | | | attract 1,000 new customers to your doorstep on any |
| mortgage deed records and more. On the other hand, | | | | given day. If you have the chance to acquire a new |
| response mailing lists consist of individuals who have | | | | customer you may only have one chance. Another |
| responded to an offer either through the mail, phone, | | | | simple rule of marketing is that it is ten times easier to |
| television, or through other means of mass | | | | get a new customer to try your business the first time, |
| communication (e.g. a magazine subscription list, a | | | | then it is to get them to try it again if they have a bad |
| catalog mailing list, etc.). | | | | experience; plan to acquire only as many customers |
| These types of lists must be understood – each | | | | as you can service – and serve them well. In the |
| has a set of unique characteristics that enables it to | | | | long-run this is a far more powerful plan. With your |
| achieve specific and distinct objectives. The key to | | | | target in mind just work backwards. For example, if |
| success is to understand when it is most appropriate | | | | you are trying to attract 100 new customers, and you |
| to use each kind. | | | | believe that 2% will respond to the promotion, of those |
| Compiled list are ideal for those businesses that need | | | | 50% will buy, then you will need 10,000 names (10,000 * |
| special demographic selectivity to target a well-defined | | | | 2% * 50% = 100). Response rates will vary depending |
| market, for instance targeting auditing companies | | | | upon the accuracy of the list and attractiveness of the |
| specializing in bookkeeping, manufacturers with 50 or | | | | offer. Direct mail professionals often use a 2% |
| more employees, or families with household incomes | | | | response rate as the benchmark for a successful |
| of $50,000 who live within 10 miles of your store. All of | | | | campaign. However, much higher response rates are |
| these examples are likely to do better with a compiled | | | | possible with a targeted and attractive offer When |
| list than a response list. This is good news if you | | | | using a response list the vendor can often provide you |
| understand the demographic profile of your customers | | | | with target counts. These may or may not be |
| since compiled lists are generally less expensive than | | | | enough to meet your goals. You may need to combine |
| response lists – costing between $40 and $70 per | | | | several response lists to get the list counts that are |
| thousand versus $90 to $125 per thousand for | | | | required. With compiled lists the trick is to configure the |
| response lists. Response lists are the best choice if | | | | demographic selects appropriately to produce the size |
| you need to cover an entire market of prospects with | | | | list required. For example, if you need 10,000 names, |
| similar characteristics. For example, if you are selling a | | | | and you request all females within ten miles of your |
| specialized software engineering tool, or to every | | | | business, and the initial list count is 100,000 names, then |
| Certified Public Accountant in the State, there are lists | | | | you may have to tighten your search criteria – |
| available from publications that serve these markets. | | | | possibly by adding another select (e.g. income level). In |
| Often information is even available on how frequently | | | | a similar fashion, the demographic criteria can be |
| these prospects typically respond to offers they | | | | relaxed slightly if the name count is not high enough. |
| receive. | | | | |