The most valuable asset of any direct-response business is its database of customers and prospects. The information in that database should be generating revenue for you. How much income it generates depends on the amount of effort you or your list management company spend on finding new opportunities. Sitting back and watching the revenue stream in can be good and bad-although I've never heard of bad revenue. But being passive means you are most likely underestimating the optimum value of the information in your database. The following pointers will add some work to your already busy schedule. But they can increase your chances of generating maximum revenue from your database.
Customer service. Always strive to improve your list business operation. It sounds like a cliche, but customer service really is key. List rental is a fast-paced business, and list renters have a lot of options. Devotion to customers-mailers, list brokers, agencies, etc.-and top-notch performance can make a big difference in whether your list gets rented or just sits there collecting dust. Count processing, order turnaround time, and product and market knowledge should be important considerations.
Whether you manage your list-rental effort in-house or through an outside list management company, set customer service standards and stick to them.
List broker and mailer relationships. It's not enough to just take orders from list brokers and mailers and fulfill them. Communicate with your customer base so you know what your customers' needs are. Meet your customers face-to-face; survey them; ask for input regarding your products and service. If your customers recommend realistic ways to improve your products or service, you will strengthen your customer relationships by acting upon their suggestions.
Seed/decoy systems. The security of your database-the names, addresses, and all the information attached to them-should be a top priority. Properly monitored database activity requires several levels of seed names and decoy address records-made-up files that permit you to receive mailings and phone calls from those who rent your lists without their being aware of it, so you can keep track of their activities. While this can be accomplished in-house, the volume of your list-rental business will most likely lead to the need for outside help. Independent mail-monitoring companies have a variety of products and services available, and can be an alternative to in-house processing.
Promotion and advertising efforts. Where do you turn for the most effective allocation of your list marketing dollars? Ads in direct-mail market publications are probably not enough to promote your lists efficiently. Hopefully, we have all learned to practice what we preach. Direct mail, trade show exposure, public relations, fax broadcasts, e-mail, Web sites, and advertising in direct-mail publications (and possibly vertical market business publications) can all be integrated into any list product marketing plan, even on a limited budget.
Take advantage of, or at least investigate, all of the marketing and promotional opportunities available. Just remember, it all leads to the sales effort. You or your list manager must be sure to follow up on all leads generated in a timely and consistent manner.
Choosing a list management company. Do not take this decision lightly! Too often, a list is placed with a list management company because of a relationship that exists with an individual in the list management company. Look for a list management company that has knowledge of your market, perhaps ev en specializes in your market segment. Base your decision on a sound analysis of the presentation and formal proposal that is offered, not on a co-worker's casual remark that "So-and-so is a real go-getter."
Database involvement. The list-rental business is much more complicated than it was a few years ago. Many sophisticated large-volume business mailers use public or private databases as a primary source of names for direct-mail campaigns. You need to make it your business to find these databases so you can take advantage of that knowledge, too.
Sales analysis. Are you missing opportunities to sell to hot new business-to-business markets? Might your product have potential in consumer markets? Are you even exploring all the possibilities of the market you are currently trying to rent to?
Cross-sell analysis is the first step to be taken in increasing your list-rental business. It is extremely important for the multiple list or database owner. For example, if your networking list is working for a mailer, then it is likely that mailer should also be mailing to your communications list.
Database segmentation and packaging. As we have suggested above, there may be opportunities for increased list-rental revenue within your database of names. Be sure to identify the hot segments in your database, and devise a plan (with your list manager) that allows you to market these segments and increase your overall list-rental business. For example, e-mail lists and databases are starting to become more mainstream in the marketplace. If you have been databasing e-mail addresses-and the addressees are willing to be contacted by others-you may want to consider placing that list on the market.
Overlays. If your database does not contain important business information such as company size or industry segment, you should research sources of this information. You may have to pay a fee or royalties to use it, but it will help to increase rentals by adding value to your list. Such outside information will also be important to your own marketing efforts, in terms of analysis of your own customer and prospect file and for outbound direct mail and telemarketing.
List/database hygiene. The cleaner your database, the more deliverable the addresses will be. This can only lead to increased response rates for customers that rent your names. Getting the test order from a mailer is hard enough, but trying to get another order after your list has failed is even harder. Be sure you run your list through address correction software and possibly even NCOA (National Change of Address) software so that it is as deliverable as possible. Also, many large companies require mail stop/department information in the address block of mail addressed to their employees. Be sure to capture these data when building your own database-and to ask for it when you are renting other lists for your own direct-mail efforts.
Reciprocal and exchange rentals. One of the most important leverage points of placing your list on the rental market is the opportunity to arrange for reciprocal rentals or exchange rentals with vertically competitive or (if you choose) even directly competitive companies. The universe of business-to-business market names (subscribers, buyers, attendees, etc.) is expanding quickly, and the number of opportunities is increasing.
Accounting policies and procedures. Your main business may be publishing, office supplies, or software, but your decision to put your list on the list-rental market has launched you into the list business-an important secondary venture is now your responsibility too. This means learning a whole new vocabulary and set of procedures. Whether you choose an outside list manager or manage list-rental sales in-house, be sure to consider the standard accounting practices in the list business: age your accounts receivable on mail date, take necessary steps to maintain tax-exempt status for your list reseller (list broker) channel, charge a realistic base price and selection price, and so on.
Residual/complementary products. The rental of your names and addresses will generate significant revenue, but it can also be the starting point for other revenue-generating direct-response products such as card packs, insert programs, and perhaps even new product lines. The dynamic nature of business-to- business creates a strong demand for current information. This information is disseminated in various media, and companies consider them all. Every database is unique and may contain information that can lead you to a new and successful segment of business-if you look for it.
Research. You should at least take the pulse of your list-buying community on an annual basis. The last couple of years have seen the advent of e-mail databases and scores of Internet-based lists, which have changed the landscape of the business-to-business market list business. Can you imagine not surveying your list product buying audience in some way about how these changes have affected, and may continue to affect, their list-buying decisions? Direct mail, telemarketing and e-mail surveys, focus groups, and one- on-one surveys are just a few ways to gauge the list-buying activity of your customers.
The list-rental revenue stream is an important one, but list owners often treat it as a secondary business. In most cases, it is a second business, but that doesn't mean that it can be treated with less care than your primary business. Successful list-rental operations require business plans and budgets, monitoring and refining. With hundreds of thousands-perhaps even millions-of dollars potentially dropping to your bottom- line, give your list-rental business the attention that it needs so you can realize maximum revenue. After all, every dollar of list-rental revenue you generate is directed back into your primary business toward the launch of new products or to offset existing costs.