July 2014 - About to rent a list for the first time?
By Simon Remington
If you've never previously rented or purchased a list, there are a number of key considerations you must address. This blog will take you through each of these and hopefully provide insight into how your campaign can achieve its objectives.
The first consideration is identifying the purpose of the campaign. It could be increasing sales, growing market share, identifying new markets, increasing activity during a traditionally quiet time, improving your ability in marketing your product/service, testing different offers, markets or lists, growing awareness in your brand or all of the above.
Once you've clearly established why the campaign is necessary, your next step is to identify goals. If like most your primary objective is to increase sales, two of my preferred measurement techniques would be cost per new customer and the amount of time required to break even.
If for example your overall campaign (list, postage, printing, mail processing) cost you $2,000 and you acquired 20 new clients, each new client would have cost you $100.
If your profit margin is 50% and it took 12 months to generate $4,000 revenue from those 20 new clients, then it has taken that campaign one year to break even. The lifetime value of those 20 clients and their ability to refer others is how you are rewarded long term.
You then need to consider whether you will market to your existing customers only or look externally. If you elect to look at an external list, Australia is blessed with many proficient list brokers who can help guide you through your options.
Assuming you choose an external list, the next decision centres on whether you will market to it once (rental) or on multiple occasions. Please note with consumer lists they tend to be available for one time rental or 12 month use only. Business lists can be available for rental, 12 month or ongoing use (purchase).
This decision will be determined by your budget, time availability to manage the campaign/s but also your own instinct as to whether a multiple contact strategy is the right option for your target market.
If you have the budget, time and resources, my recommendation would be a two contact approach with six tor twelve months between mailings. When you consider the percentage of the list in the market for what you are selling on that day alone versus how many will be in the market over the next 12 months, it would be wise to conduct at least one follow up effort.
Coming up with the right target market is critical in allowing your list broker to make an informed list recommendation. As a broker I will always bow to the judgement of my client as to who their target market is. If you are not sure, talk to colleagues and also refer to your customer database for further insight.
Once your target market is defined, your broker can then research the various options on the market and make a recommendation plus handle the ordering and delivery of the list itself.
Your creative materials and offer strength are of vital importance. While the design and aesthetic appeal are important, don't forget to gear your message around benefits of your product or service to your prospect. If they can't glean a clear benefit of responding within the first five seconds, chances are they won't get in touch.
My recommendation is to test two different offers and measure them against each other. To ensure the results are meaningful, randomly split the list so the results are not skewed.
Measurement should be addressed before the campaign goes out. When overlooked it's then likely you won't get a full picture as to the true number of leads your campaign generated.
If your website asks people how they found you, make sure your campaign is mentioned as one of those options. Also ensure your reception staff have a sheet to prompt them to ask new leads how they found you and record each one.
You can also look to print codes on mail pieces especially when using more than one list at a time. Over the years I've witnessed large discrepancies between different lists for the same client and mail piece so it's well worth the effort of coding them separately.
During my fourteen years as a broker and ten running Remington Direct, I've come across a diverse group clients. While they may have come from a wide range of industries, locations, company sizes and levels of experience, all had to organise their first campaign at one point.
While some hit it out of the park on campaign one, most didn't and have gradually developed a feel for the most suitable approach for their business. My advice is to thoroughly plan your campaign, execute it and then be just as thorough with your analysis to identify ways of doing better next time.