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MeritDirect chief: Cultivate existing customers

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Ralph Drybrough, a 14-year veteran of the list-management industry, joined several of his colleagues from Direct Media Inc. to form MeritDirect in February 2000. In just two years, the Stamford, Conn.-based company has emerged as one of the leading players in the field, with 46 million b-to-b names spanning many disciplines. Its clients include catalogers such as CDW Inc., Lands’ End Corporate Sales, Reliable Corp. and Executive Greetings Inc.

CEO Drybrough recently offered BtoB some insight into the state of the list industry.

BtoB: How have response rates been holding up among your clients, considering the recession?

Drybrough: They haven’t. Response rates have been decidedly soft for the majority of my clients. With few exceptions, there’s been a lot of weakness in prospecting new business versus customer retention.

When the economy slows down, we counsel our clients to look inward and hone their skills at retaining their customers. Companies can emerge from downturns in much better shape if they cultivate existing customers to improve the lifetime value of the commercial relationship. That way you can afford to invest more to acquire new customers.

BtoB: Have the bigger b-to-b companies been slow to embrace online lists? Are they still wary of putting their marketing dollars into an area that is hard to measure?

Drybrough: On balance, yes. But then the bigger companies—computer hardware catalogers, office-supply companies, general office-supply retailing—have shown a willingness to test opt-in e-mail lists for purposes of generating store traffic and driving people to their Web sites to get some sales. Fortune 1000 companies have been the most aggressive in testing e-mail marketing because they have the resources to do it.

BtoB: What are the current sticking points in negotiating rates? What are your clients demanding to be assured that the lists they’re renting are not only highly selective but will provide solid returns?

Drybrough: B-to-b transactions tend to be much higher and provide better long-term retention, so the b-to-b company can afford to invest more in acquiring the customer. There’s less price pressure because they know they’re getting lists with good hygiene that are updated and deliverable. Prospecting is inherently testing, not just with the lists but the offer and the creative.

BtoB: How big is the trend of combining offline/online lists as part of a larger integrated marketing package? Does it all depend on the client and the particular market?

Drybrough: If you’re trying to do a multichannel promotion to a specific company or an executive at a specific company, then you have to be able to have available lists with both an e-mail and a land mail address.

In my experience there’s virtually no sources for this kind of multichannel marketing, with the exception of controlled-circulation publishers. A combo requires a lot of orchestration because you have two different parties responsible for making the mailing happen, and to connect one with the other can be tricky in terms of coordination.

Direct mail has its own set of problems with the piece not getting to its target on time, and e-mail has its own set of afflictions. The one difference is in waiting a matter of days compared with a matter of hours.

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