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Wrapping your Head Around List Acquisition

Updated: Jul 28, 2020

New customer acquisition is still a business necessity during these unconventional economic times. With more people at home, many companies are turning to direct target marketing which requires lots of data in the form of potential customer lists. Acquiring those isn't exactly like buying a loaf of bread, though.


When Do you Need a List?


Target marketing, especially direct mail marketing, has an old rule called the "40-40-20 Rule" which speaks to how marketers spend their energy. 40% of your campaign should be based on targeting the right audience. 40% should be focused on making the right offer. And 20% should be devoted to provocative creative. This rule guides how marketers devote time to development, assess their campaigns' performance, and where to adjust when the numbers are disappointing. Today we'll be focusing on the first 40– targeting the right audience.


Know your customer. It's a simple responsibility of any business, especially the marketing department. We have many tools such as building customer profiles, commissioning surveys, and of course, analyzing your active customer base. Once you know the type of customer you want, the next step is finding them. Sometimes this is referred to as prospecting, and for every service or product, there's a new prospect out there! And there's a very, very good chance they are on a list.


So what do we need to know about your ideal customer to find the best list for your company? Well, the more the better. Age range, gender, location, income, spending habits, car ownership, home ownership, debt, online activity... there's a wide swathe of demographic details that certain lists specialize in. Now in the digital space such as Facebook, you can go through these traits and simply check a box, and they will publish an ad to those people. In the direct mail space, finding your target prospects isn't that simple, but the ROI is much better, especially during the health crisis when more people are opening their mail.


What Type of Lists are Available?


Lists can be rented or purchased. They can be rented for a one time use, or usage over a period of time. Which situation will vary based on a number of factors. What is the length of the campaign? How many drops (pieces of mail sent) will you have? What's your budget? The size and geographic scope of your target market will influence these factors and what is available on the list market. A nation-wide campaign for Medicare Supplement will require more investment than a localized coupon offering for a mechanic. If the mechanic wants to send out a coupon to every Jeep owner every month of the year, he'll be investing more than the hair dresser who wants to do a one time postcard to women aged 50 - 65 in a single zip code.


There are two general types of lists, Compiled and Response. These both have different use cases and variation in acquisition process. Many companies, especially those using a marketing agency, will use a combination of both.


  • Compiled lists are large databases collected from external sources, such as phone books, credit files and various types of public records like county tax assessor data. Compiled lists are used for mass marketing, especially if you have a limited budget. A local business with broad appeal, such as a hair dresser or pizza parlor, would use this type of list. Compiled lists can be segmented using demographic data like gender, age and income level. They typically are less expensive to rent than response lists.

  • Response lists (also called managed lists) are collections of consumers who have responded by purchasing or inquiring about a specific product or service. Typical response list sources are subscriptions, membership clubs, newsletters, or savings services. If you’re selling a particular type of product or service, it makes sense to market it to people with a similar known interest. For example, if you’re selling golf shoes, renting the Golf Digest subscription list is a way to target potentially qualified prospects. Response lists are more expensive to rent than compiled lists because they are more highly targeted and more valuable to the marketer. They also tend to generate higher response rates.



How do you Acquire a List?


There are a number of ways to approach this need, and it will vary based on the scope and objectives of the marketing campaign. For a small business looking for a localized campaign, working with a list broker can get you the data you're looking for, and they will take their cut. This will still leave you with a lot of work to do as well, such as developing the offer and the creative design, bringing it to print, and mailing the drop (remember the 40-40-20 rule). On a local level, there is the option to trade lists with similar or complimentary businesses, which can help both companies. Going it solo (without a marketing agency) will require you to deal with a number of different players in the list market:

  • List Brokers perform research and make recommendations based on their experience and your goals. They also advocate on your behalf with the list owner or manager.

  • List Compilers manage the lists they compile and market them to potential clients.

  • List Managers oversee the rental of the lists they manage and advertise on their behalf.

  • List Managers/Brokers both manage and broker lists and, consequently, may promote lists they manage over others. Keep this in mind as you consider their recommendations.

  • List Owners can rent or sell the lists they own to non-competitive companies.

Simply having the data isn't always guaranteeing that you're getting the most out of the data, though. There are a multitude of data modeling techniques that can refine your target prospects even further, and the best database experts will use a combination of many of these methods. Working with an agency who specializes in target marketing can streamline this process due to their longstanding connections and experience with what works. A prospective client for a direct mail agency will be given a full suite of list options along with the necessary services to bring a targeted campaign to completion. List hygiene is an essential process that is guaranteed when dealing with an agency with an experienced data team. We didn't focus too much on this subject, but there's a number of legal concerns that protect consumers from unwanted solicitation, so make sure you trust who you work with!


Here's a list of questions any business should ask when pursuing customer lists for new acquisition:

  • What sources are used to compile the list? Some sources may be more credible than others.

  • When was the mailing list last updated? To be current and assure deliverability, lists should be updated about once a month.

  • What other mailers use the list? This info can help you evaluate whether or not you think a specific list might work for you.

  • Is there a discount if you want to use the list multiple times? Some list owners offer multiple-use discounts versus the rate for a one-time rental.

  • Does it contain complete names and titles? An incorrect address may cause your envelope to get trashed.

  • Which list hygiene practices are used? This includes running the list through the USPS National Change of Address (NCOA) database, removing duplicate names, and fixing incomplete addresses.

Milestone Marketing Solutions are target marketing experts that are excited to answer any of these questions for a business interested in direct mail. Please inquire below or through our chat service.





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