8 Essential Functions Your List Broker Should Perform

Before I tell you what your list broker should do for you, it’s important for you, as a mailer, to do some things for them...

First, it’s of the utmost importance to communicate with your broker. He or she should be viewed as a true partner in your business. Most importantly, share your results. This doesn’t mean you have to disclose profitability or response rates. Much of this information can be indexed, giving your broker a relative idea of how lists are doing.

Don’t be too guarded about your future plans. Brokers should be involved from the beginning of new ventures. It’s not uncommon for a company to invest in the development of products or services they plan to market through the mail, only to find out later the volume of qualified list universes are simply not available.

Finally, share your expectations with your broker. Discuss with them specifically what you expect them to do for you. These eight functions will help get you started:

#1. RECOMMENDATIONS

If you are to expand your business through direct mail, it is absolutely imperative for your broker to constantly recommend new lists for you to test.

The best brokers will look at your list usage by categories of lists, e.g., donors, book buyers, opportunity seekers, catalog buyers, etc. Categories can be further classified and grouped by subject matter and particular selections that work well. For example, you may do well with change of address selects across many different types of list categories. Your broker should look to totally exploit every list available in your strongest categories and recommend lists in other categories, to open up new sources of names for you to mail.

When a list is recommended to you, expect your broker to also recommend the specific selects available on that list that you should test first. I personally believe in testing the portion of a list that has the best opportunity of performing well, even though by adding selects you’re cutting down the total universe available to go back to. But, by first giving a list its best opportunity to perform, you will not totally abandon it because of a marginal test result — then miss out on mailing a smaller portion of the list that would be profitable. If your initial test results are strong, you can always expand into new areas of the list in your next mailing.

#2. LIST USAGE

Whenever your broker recommends a list to you, be sure that they include who is using the list on a continuation basis (not who has tested the list). You should be interested in companies that have similar products and promotions to yours — in other words, your competition. Usage information is usually made available to list brokers by list managers or owners because they want to rent as many names as possible. Don’t rule out testing a list because the competition is not mailing it, but definitely test every list the competition is mailing on a continuous basis.

#3. TIMING OF UPDATES

If hotline selects work well for you, then it’s very important that you know when a list owner first makes these new buyers available to the rental market. In other words, when were they updated onto the list rental file/database? This is important for two reasons:

First, you need to know the true length of time since these prospects responded or purchased. If a list owner updates, or adds names to their rental file, on a monthly or quarterly basis it could make a big difference in the performance of hotline names. What is advertised as a monthly hotline could be seven or eight weeks old — quarterly hotlines could be five to six months old.

Second, if you know when the list owner adds their new buyers to the list rental file, then you can then start planning your mail dates accordingly to maximize your response. I’ve included critical information about hotlines in the section that follows called, Hotline Lists and How to Mail Them While They’re Still Hot.

#4. CLEARANCES

This is the process by which a list broker gets the approval from the list manager/owner to release names for you to rent for a particular promotion. Usually this is a simple process. You send a promotion to your broker and he usually sends copies of it along with the rental order. It’s normally just a formality.

However, this is not always the case. A list owner may reject your request to rent their names for a number of reasons. Your offer may be too competitive, or the list owner simply may not like your promotion and does not want his customers exposed to it. It’s your broker’s responsibility to let you know early on in the process if a rejection is possible. You don’t want to find this out after you’ve placed orders and planned on a certain mail quantity.

Put your broker to work right away gaining clearances on any lists that may be potential rejects. If you’ve been rejected initially, your broker should be able to tell you exactly why. Often you can overcome objections, or at least get a provisional acceptance to just test the list. Once you get test results you’ll know how important this list could be for you and how much of a premium you may want to pay, or even if it’s worth changing your promotion to satisfy objections.

Above all, don’t hesitate to try to gain clearance for a list because you think, “there’s no way they will rent to us”. Companies have become much more aggressive marketers of their lists. More and more list owners are renting to the competition and approving offers they rejected in the past. Plus, keep in mind you have a valuable list that they may want to mail — use your list as a negotiating point. There are many win win situations in the list rental business.

#5. LIST COUNTS

You will see list counts on the data cards your broker sends you, but often these counts are estimates or simply old and outdated. Plus, when you’re in a continuation/ reordering mode, you’re really not going back and looking at data cards for these lists. You’re usually ordering the exact same selects and simply suppressing names you’ve ordered before. In this case, you’re looking for balance counts. Whichever type of order you’re placing be sure your broker has provided you with the most accurate counts available.

If you’re planning to select certain portions of the list, your selects will certainly effect your counts. Sometimes it’s possible to estimate the impact of your select, e.g., if you’re selecting females only and the data card states the list is 75% female, then you’ll have a pretty good idea of the quantity to expect. However, often you’ll want to combine selects and estimating becomes much more difficult.

Your broker should be your guide to determining the types and number of selects to order and the impact on the resulting counts. Sometimes it’s virtually impossible to determine the expected count unless the order is run, but this is an area of the list rental business that’s improved greatly. Today many list rental databases utilize the latest technology that allows managers to run select queries to obtain balance counts. Even complicated queries will run on large list rental databases in a matter of seconds. This information can be obtained during a phone call from your broker and you’ll know what counts to expect before you place an order.

#6. DEALS

This is another area where your list broker can make a major contribution to your success. Often deals are needed because, without a better deal, you cannot mail the list profitably. This is one reason it’s important to keep your broker informed of your list results. Don’t hesitate to tell your broker the deal you need in order to mail the list. It’s very important that you are prepared to back up your words. If you don’t get the deal, don’t order the list. Your broker can then point out the missed revenue to the list manager, which builds up your negotiating ability.

Please keep in mind that most deals a broker makes for you may appear to actually reduce their commission. You may think that this is a disincentive for them to make deals, but most brokers realize that it’s important to keep you as a satisfied client, and furthermore, your success will translate to their success in the long run. Here are a few examples of the kinds of deals your broker should negotiate for you:

Pricing - This type of deal is self-explanatory — a better base price on the list. However, in the case of a competitive list, you may agree to a higher than advertised price, just to get clearance to use it. But don’t forget about exchanges. Often it’s a good decision to enter into a name exchange relationship with another mailer. You’ll find most brokers discourage exchanges, often with valid reasons. But if it’s clear to you that an exchange relationship is valuable for particular lists, then insist that your broker arrange it.

Net Name Arrangements (NNA) - Whenever you end up netting out less than your current arrangement, ask for a better net. Don’t just accept it as a normal part of doing business. Supply your broker with the results of your merge purge to demonstrate your point. If the final cost per name in the mail for a particular list is making it marginal or unprofitable, then you must be prepared to drop the list from a mailing in order to make your point, as I mentioned before.

Special Selects - Just because a particular select is not listed on a data card doesn’t mean it’s not available. Again, it’s important to have your broker ask if a special select can be made for you. Selects are also an area where your broker can do a lot of dealing. List owners often will allow you to add a select for no extra charge or will put a cap on selection charges, so you pay for one select, but can add several more for no extra charge.

#7. CHANGES IN LISTS

Your list brokers are your eyes and ears to the list business. Whenever a new list comes onto the market or there’s been a change in a list you’re using, you should expect to hear from your broker.

Here’s what I mean by changes in lists. If a company changes certain aspects of its new customer acquisition strategy, it could have a major impact on the future results you realize on the list. Here are some examples of changes that you must be informed about:

• non-sweep to sweep

• hard offer to soft offer

• direct mail to TV or Internet-sourced sales

• acquisition product changes

• new reliance on agent sold sources

Don’t get caught like one mailer I know that was successfully mailing names on one list for a while, then mailed 200,000 new names from the list that bombed. Why did it hap-pen? The list owner was a general merchandise mailer whose main offer switched from a product directed toward women to one purchased primarily by men. Besides having your list broker look out for these situations, I suggest whenever you see the quantity of names added by a list owner go up or down significantly, ask why this has occurred — volume changes can be your first tip off.

#8. DELIVERY OF ORDERS

Once you’ve told your broker what lists to order it’s imperative that he or she places your orders immediately and monitors their progress until they are well into the merge purge process. You should receive copies of orders within a day or two. Review them for accuracy. Your broker should be in constant communication with you, the list managers and your service bureau in order to insure:

• Output counts from the list manager are what you expect

• The expected delivery date is met

• The file is readable and the counts are verified

Does your broker perform all of the functions I’ve just explained? If not, I know several that will, with great enthusiasm. Let me know if you’d like me to recommend an excellent list broker experienced in your business area.
 

Proceed to Chapter 6...