List Rental Basics

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Direct Mail Marketing

It is through mailing list rental that direct mail offers its selectivity.

The fundamentals of direct mail are its selectivity and its accountability. Unlike many forms of mass advertising and marketing, direct mail allows you to select your targets and measure their response to a much higher degree. It is through mailing list rental that direct mail offers its selectivity. It is through the use of tools such as Break-Even Analysis that direct mail can measure response.

The Basics of Renting Lists

Two basic types of lists: Compiled Lists versus Response Lists
Compiled lists are just that. They are compiled from public sources, typically starting with phone books and then aggregating any other sources to each record. Other sources are credit files, court house records, tax assessor records and, in the past, motor vehicle registrations. Compiled lists are often overlaid with basic demographic and lifestyle data from these other sources.

Response lists contain individuals and companies who have responded to offers, typically mailed offers but also internet, print ad, and television offers. The key behavior is that they have responded to an offer, where as compiled individuals and business may never respond to any offers. Sources of response lists are magazine subscribers, donors and contributors, membership clubs, catalog customers, inquirers and the like. Response lists are usually recognizable brands such as Victoria’s Secret buyers, Sports Illustrated subscribers and St. Jude’s Children’s Hospital donors.

Compiled lists typically cost from $30/M to $70/M on the base without selections compared to $70/M to $200/M for response lists.

Most direct marketers would say that response lists outperform compiled lists. However, with all the new list enhancements and overlays available, compiled lists are achieving exceptions to this rule of thumb.

In the past, compiled lists were considered a good choice for marketers who are in a hurry (mail piece approval is not required), who have a limited geography they want to saturate, who can target by basic demographic and firmographic selections, and who mail smaller quantities. However, many large, sophisticated mailers now use techniques such as modeling with large compiled database installations to produce excellent response rates at reduced costs.

Still, response lists are often the better choice when a marketer must target a niche audience especially based on a brand, or product or service category. For example, a direct marketer who is selling up-scale women’s apparel might be very interested in renting the Victoria’s Secret list mentioned above. Another example might be a medical supply company who would want to target physicians and would be interested in the AMA’s physician list.



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