Direct mail is an amazing but complicated advertising medium. Getting into direct mail requires a long term, dedicated & strategic plan that should involve a budget that takes into account the need for significant testing and learning.

The mailing list is an important part of any direct mail campaign.

There is a lot to understand about renting a list. Besides identifying your marketing strategy and your target audience, there are other technical, legal and logistical considerations you should be aware of.

This brief primer will illustrate some key concepts and summarize some general processes. Review the following pages to better understand some of the intricacies of mailing list rental before beginning the list research process.

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.

Databases built from public records

A. Compiled Consumer Lists
Basic Geographic and Demographic Characteristics at the Household Level

Sources:
Telephone Books, Newspapers, City and State Government Offices
Birth and Death announcements
Voter Registrations
Real Estate Transfers
Bankruptcies

Available Data Elements include:
Adults by Age and Gender
Household Income
Ethnicity
Marital Status
Presence of Children by Age and Gender
Length of Residence (in years)
Dwelling Type (Single Family Dwelling Units – SFDUs, Multi-Family Dwelling Units – MFDUs)
Telephone Numbers
Geographical Location at the State, SCF, Zipcode, Carrier Route level
Select by Lifestyle and Hobbies
Select by Mail Order Buyer Categories
Select by New Movers
Select by Homeowners and New Homeowners
Select by Recent Bankruptcies

B. Compiled Business Lists
Basic Business Characteristics including geographic and firmagraphics

Sources:
Telephone Books, Newspapers, City and State Government Offices
Business Licenses
Bankruptcies
Industry Directories
Chambers of Commerce

Available Data Elements include:
SIC (Standard Industrial Classification) Code
Annual Sales Volume
Select by Business Credit Rating
Select by Square Feet
Select by Number of PCs
Select by Title of Executive
Select Executives by Ethnicity
Select by Businesses who Own or Rent
Select by Franchise, Brand or Professional Specialty
Select by Yellow Pages Advertising Spend
Select by Geo Radius
Number of Employees
Year Started
Headquarters/Branch Locations
Franchises
SOHOs (Small Office/Home Office businesses)
Import/Export Businesses
Top Contact Name
Geographical Location at the State, SCF, Zipcode, Carrier Route level
Telephone Numbers

Privately owned and built from direct mail and websites

A. Response Consumer Lists
Consumers who responded to a direct mail, email or telemarketing offer (Buyers, Inquirers, Subscribers)

Sources:
Self-reported Surveys
Catalog and Mail Order Purchases
Donors and Contributors to Political, Charitable & Religious Organizations
Magazine Subscriptions
Informercial Buyers
Continuity Clubs (i.e., Book and Music)
Opportunity Seekers
Retail Store Transactions
Travel & Entertainment Offers

Available Data Elements include:
RFM Data (Recency, Frequency, Monetary)
Mail Order Buyers
Mail Responsive
Credit Card Holders
Lifestyle Interests (Travel, Pets, Hobbies, Sports, Internet Usage, Health)
Geographical Location at the State, SCF, Zipcode, Carrier Route level
Demographics (either self-reported and overlaid from Compiled Lists) are often available on Response Lists: Age, Gender, Household Income, Ethnicity, Marital Status, Presence of Children, Homeowners, Telephone Numbers

B. Response Business Lists
Owners and Company Employees who responded to a direct mail, email or telemarketing offer (Buyers, Inquirers, Subscribers)

Sources:
Industry trade publications
Trade associations, clubs and organization memberships
Business catalogs and mail order offers
Business magazines and newsletters (including e-newsletters)

Available Data Elements include:
SIC (Standard Industrial Classification) Code
Annual Sales Volume
Number of Employees
Year Started
Headquarters/Branch Locations
Franchises
SOHOs (Small Office/Home Office businesses)
Import/Export Businesses
Contact Name by Job Title and/or Job Function
Geographical Location at the State, SCF, Zipcode, Carrier Route level
Telephone Numbers

How to read a mailing list datacard. Download the PDF

Additional policies and procedures you should be aware of:

• 5,000 record minimum is typical
  (though some list owners require 10,000 records or more).
• Rentals are typically for one time use only
  (reuses and one year unlimited use are available).
• Mail pieces, email creatives and telephone scripts must be submitted for list
  owner approval. Some list owners require list rental agreements to be signed
  by list renters and data facilities where their list may be sent, such as service bureaus, mail houses, letter shops.
• Volume discounts are available for some list rentals.
• Deliverability
  The list rental industry standard for deliverability is 90%. This means the list owner guarantees that 90% of their list will be deliverable by the US Post Office.
• Accuracy
  List managers believe the information concerning lists to be accurate, to an extent. But list managers and the list owners represented, do not guarantee list accuracy or the outcome of any mailing. Accuracy is very good on certain variables such as age and home ownership.
• Accuracy is very poor on variables such as income, net worth and any data self-reported from surveys or web site sign up forms. Because of this accuracy limitation, good direct marketers ALWAYS test lists to see how they perform, as nothing is guaranteed except deliverability.
• The average list will change 15% to 20% per year. No mailing list is ever static.
  The US Postal Service estimates that 15 to 20% of individuals and businesses move every year.
• Those who have previously bought by mail (Mail Order Buyers) and those who
  have previously bought from you (your House list) are stronger prospects than
  any other list.
• Telephone Numbers
  Consumers – Do Not Call Registry, SAN (Sunscription Accout Number with National “Do-not-call” registry)
• Prepayment is typically required by list owners from first-time renters.
  Net 30 day billing otherwise.
• RFM – Recency, Frequency & Monetary Value are important factors in mail order buyer lists.

Understanding the profits and losses associated with a mailing. Download the PDF

The Direct Marketing Association (DMA)
DMA (Direct Marketing Association) and ANA (Association of National Advertisers) have combined to form the largest and most influential advertising and marketing association in the world.

The ANA focuses on driving growth by fueling smarter marketing and leading industry change. By commanding the industry agenda, shaping the future of marketing, and championing marketing excellence, the ANA enhances career development and advances, promotes, and protects the interests of marketers.

FTC Do Not Call List
Starting January 1, 2005, telemarketers and sellers will be required to search the registry at least once every 31 days and drop from their call lists the phone numbers of consumers who have registered.

US Postal Service
Find ZIP Codes, postal discounts and mailing requirements.

Legal Issues:

Fair Credit Reporting Act
Gramm-Leach-Bliley Act
CAN-SPAM Act