"Since launching our catalogue three years ago, we’ve relied on word of mouth and search marketing to gain customers. We’re now ready to prospect via rental lists, but we don’t know how to go about finding a list company to work with. What should we consider when shopping for a list broker?"
Allie Oldham is group marketing director of multititle cataloguer Scotts & Co.
When working with any supplier, we look to them as an extension of the marketing team. It’s important that you find a broker who understands your business and, equally important, is someone you like. It’s essential that they have a sound knowledge of the mail order industry and what lists are available along with an understanding of what lists work. Find out which lists they manage and who they broker for; this will give you an idea of their experience and expertise.
Because you’re a relatively new business, I would recommend you consider a number of options. In addition to renting prospect names, you should consider data swaps, and your broker should be willing to manage this for you too. Don’t forget the industry data pools, either. They will supply 18 times your 0-24 month house file, so volume shouldn’t be an issue. They will recommend and build models for you, and at a rate of £70/000 for prospect names, it can be more cost-effective than renting direct from another mail order company.
The list brokers we use ourselves for selecting prospect lists are expected to do a lot of homework. We want to see new names on the list of files they recommend. We want to see recommendations that apply a series of selection criteria to find suitable names on large customer files. In short, our expectations of brokers working on our behalf are similar to those that we apply to our list managers: We expect a high level of intelligence to be applied. If, along the way, they can identify sophisticated clients who understand the benefits of mutual data enhancement and swap deals, so much the better.
Steve Reid is managing director of list firm Tri-Direct Sales.
The first thing I would say is to go with your instinct; you need to meet, like and trust your broker. If you’re not sure of your gut feel, then look at their client base: Do they look like the sort of company you’d like to keep? When you are shopping for your broker, take note of which ones offer testimonials, and start the shopping process by asking for referrals from your industry contacts.
Then have a look at their case studies. Have they helped others in your sector with similar challenges? Have they offered anything innovative? Try not to be seduced by glossy brochures and whizzy websites; depth of experience and a high standard of service are what matters.
Check that they are offering competitive fees and commission structures. The current guideline from the Direct Marketing Association is typically 10-20 percent of the list rental cost. And ensure at the start of the relationship that it is the senior brokers looking after your account. These are the people who can advise on VAT issues, data-protection principles and other legal aspects of your business. Do they seem willing to develop the relationship? For example, does the broker suggest testing the waters with a swap? Using a mixture of swap and cold lists is a great way of testing your offering, your creatives and your fulfilment or conversion process without a lot of initial financial outlay.
Once you’ve selected your broker, make sure you get the agreement of the who, what, when and how much down in black and white so that there are no misunderstandings or ambiguities.
The final piece of advice is to establish at the outset what success looks like; you need to measure the outcome of a campaign against something. You don’t have your own data yet, so decide—with the help of your broker—how you will assess the results of the campaign. He or she should, because of their experience, have a very good idea of how certain lists are likely to perform for you, and if they are promoting new, untried lists, they should provide a detailed rationale for their use.
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