MAIN STORY: Gaining an Edge
NEWS: List managers predict pickup in business
THE RIGHT LIST List selection drives results
SHARING LISTS Missed opportunity
E-MAIL OUTLOOK: List managers forecast modest increase in e-mail
GUEST COLUMN: CAN-SPAM alters e-mail list rental practices
WEB Web tools enable users to build lists
LIST MANAGERS: chart (PDF)
Gaining an Edge
By Carol Krol
As the economy improves, look for marketers to step up their prospecting efforts. That should bode well for list rental companies, especially those that provide added value to clients. The decreased marketing activity of the past two years hit list the list industry hard. The downturn, marked by shrinking lists and increased competition for fewer marketing dollars, forced list companies to become more creative, refine their strategies and expand their services. As a result, they began to morph from simple list managers to complex list strategists.
"List management companies are offering all kinds of great add-on services for customers," said Deb Goldstein, president of IDG List Services, Framingham, Mass., a list owner as well as a list manager. "It's a partnership. Companies aren't just saying, 'Give me 20,000 names' anymore."
Marketers now demand very specific, targeted names from multiple lists "in order to make sure they're getting to the right person with their message," Goldstein said. They are also more likely to shift strategies quickly based on results, perform small tests and reallocate dollars.
"A much higher percentage of people we talk to really are not planning in the way that they used to," Goldstein said, because of the evolution of media.
Going that extra step
Marketers want a high level of sophisticated service, and most list vendors now offer such things as high-end analytics, cooperative databases and data enhancement tools.
"You go that extra step you might not have gone years ago," said Larrisa Hansen, president of Aggressive List Management, Barrington, Ill. She said Aggressive acts as a database consultant for marketers, helping them to get more out of their files. "To go through that process with existing clients is important, especially if they experienced a down year," she said.
Stevan Roberts, CEO of Edith Roman Associates, Pearl River, N.Y., said advances in database technology and analysis tools have made it possible for list managers to become better strategists. Edith Roman plans to announce this month the Roman Alliance, a database that will combine 50 million records from both Edith Roman and e-mail counterpart E-Post Direct. "You can do marketing through e-mail and postal channels and select across profiles and segments," Roberts said. "These things will be available in one place."
Walter Karl recently began using online sites to generate leads for clients. Ed Mallin, president of Walter Karl, said the list company, in a brokerage role, helps clients build customer files by posting questionnaires on other companies' Web sites. It then provides the names of respondents to the marketer. "We've really gotten aggressive with it," he said.
The expanded role of list companies has blurred the lines among list marketers, data compilers and database marketers.
"All those companies are nosing into each other's business more and more," said Lisa Penelton, senior VP-director of analytic services at Draft Chicago. Penelton collaborates with ID Media, the company's media buying and planning arm, to provide targeting, list procurement and program evaluation for clients including the U.S. Postal Service.
"Folks who manage databases are also moving into the compiling space or into data overlay or statistical model development," she said. "Everyone is looking to deepen their relationships with clients."
Marketers are the beneficiaries of this trend toward value-added service. "We get our best ideas from the vendors," said Danny Flamberg, VP-relationship marketing at SAP AG, New York. "CNET is our favorite flavor from last year." He said CNET had smart ideas about how to use its list to market to SAP prospects.
Flamberg, who oversees SAP's global direct marketing, said the company is highly selective when using outside lists. "We're extremely rigorous in quizzing the ability of list owners to target," he said.
Michael Veit, direct marketing manager at RSA Security, a security software company in Bedford, Mass., said the most recent enhancements he has seen are spam-related. "They [list managers] started offering new services related to spam law, like not charging or charging very little to suppress opt-out lists."
Marketers like SAP and RSA Security expect competitive pricing from list companies, even with the added services. "Has the pressure on [pricing] increased? Sure," IDG's Goldstein said, but she added this isn't a new phenomenon. Marketers continually ask for discounts, she said.
Competition remains intense
Marketers today can't afford not to attract new customers, so list managers will surely benefit from increased budgets as the economy improves. (Both SAP and RSA Security are expected to boost their direct marketing budgets this year.) But the intense competition among list vendors will probably remain.
Direct mail volume may not be decreasing as precipitously as it did the past two years, but it's not expected to return to its peak levels either. E-mail marketing has become a more cost-effective way to reach customers, and analytical tools have become so sophisticated that marketers generally don't need to rent a large volume of names anymore.
"A lot of companies are trying to maximize marketing dollars by narrowing down segments. Analysis tools have gotten so much better that marketers can pinpoint more precisely," said Greg Recht, manager of client services at Inktel Direct, Miami, a direct marketing lettershop and fulfillment house that buys lists on behalf of clients. The rise of search is also affecting list companies by taking away dollars from direct response marketing, both postal and e-mail. "The budgets are so small now for marketing" Goldstein said. "The pie has shrunk, and the way that pie is allocated is shifting all the time because people are looking so much more for short-term value and ROI."
By Carol Krol
List managers are under constant pressure from clients to extract the most value from their data. The troubled economy of recent years only intensified the pressure on companies in the highly competitive list industry.
BtoB recently assembled four list industry leaders for a round-table discussion over the phone. They discussed the effects of declining direct mail volume, the challenge of finding quality lists and the trend to e-mail marketing. They also speculated on what we can expect in the year ahead.
The executives who participated were: Michelle Feit, president of E-Post Direct, Pearl River, N.Y.; Fran Green, president-data management at American List Counsel, Princeton, N.J.; David O. Schwartz, CEO of 21st Century Marketing, Farmingdale, N.Y.; and Mike Tuohy, VP-business-to-business at Direct Media, Greenwich, Conn.
Below is the edited transcript of the roundtable discussion.
BtoB:Direct mail volume has been dropping for the past couple of years. What effect has that had on your business?
Tuohy: The most significant thing we're feeling is that the less people mail, the more their 12-month files shrink. If you went back to the same list that you used a year ago, [it] might be 25% less than it was the year before. So it is a challenge to find enough names to mail for people who are mailing. I am a little bit concerned that in the future, when people start to rack up their mail plans again, it will be a real problem. There just won't be enough names to mail.
Schwartz:As far as the impact, I totally agree with Mike that you do have a reduction in universe. You even have a reduction in the companies, list managers and mailers that aren't around due to the challenging market and some who have totally shifted into e-mail marketing or whose budgets are now heavily allocated in that direction.
Feit: People are definitely shifting some of their testing budgets over to e-mail. But for the real direct mailers, there is not enough universe on the e-mail side even still to actually decide "I am not going to do direct mail any more. I am only going to do e-mail." So they are able to reach some people by e-mail, but they still can't reach all the people that they are able to reach in direct mail by e-mail.
I would say that there is a certain amount of testing budget that probably has shifted over, but the true impact of why the whole direct mail volume has decreased goes way beyond just e-mail. That might be one factor.
BtoB:Will the decrease in direct mail volume change any time soon or is it part of a longer-term shift away from direct mail marketing?
Schwartz: I think it's going to stabilize and grow in 2004, by a small percentage probably-under 5%, maybe 2% or 3%-but I think that in 2005, we are going to see a very, very big year. I think it's going to be a significant growth.
Tuohy: I could not really give you a number on what percentage. I think it's going to go [up], but I do think that 2005 will be where we see people start to mail more. We get comments pretty frequently where they say, "We simply can't just mail our house file anymore; we have to search for prospects again or we are going to be in real trouble." And at this point, the survivors have survived.
BtoB:And so you don't think that there is a long-term shift away from direct mail?
Tuohy: I don't. I think that they were just scaled back for the most part in their prospecting.
BtoB:What do you think are the biggest challenges right now in b-to-b list management?
Schwartz: The single biggest challenge is still to find quality names. There's so much repackaging of compiled and response data to create new offerings and new opportunities. It's hard to find the kinds of solid quality lists. Not that there aren't many out there; it's just more challenging because those universes are smaller.
Green: I would add two things that I think are very much signs of the time. One is that it's getting more difficult to identify and be able to target the emerging b-to-b market. Certainly, the community has recognized the whole value of the SOHO [small office/home office] and small-business markets-because there are only so many Fortune 500 companies you can beat on after a while-but they are hard to find. It's hard to identify the brand-new businesses or some of the emerging categories. By the time they are on our list, they are almost mature already.
The other challenge is being able to really go deeper into data and employ data to really make it work. The b-to-b market typically has much richer data than the consumer market, but [b-to-b marketers] don't use them as well.
There are not a lot of big consortiums or data being shared. There is not a lot of modeling that's being done in the b-to-b space that works as well as it does in the consumer area. Yet data absolutely drive the response, and if you can figure out how to go deeper into your data, if you can create more predictors using the robust data that exist in the b-to-b world, I think we'd have lists that truly delivered greater value. We would be able to meet the challenge of reduced response rates, which is causing some of the cutbacks. We'd be able to really position individual files much more strongly, capture market share in this shrinking environment.
It is incumbent upon us, the list managers, to add more value and to differentiate ourselves. In any business, if the service or product is perceived to be a commodity, then price becomes a competitive issue. I think that businesses are always willing to pay more, if they believe they are going to recognize real value for that, but if it is a commodity, why should they?
BtoB:Is ALC changing drastically to meet those challenges?
Green: Yes, we are very deliberately changing. We are offering more services to our clients, beyond just saying, "Give us your data and we'll manage it." We have a group called Database Resources where we are really helping people understand what they have on their database, [and how to] configure it properly so they can maximize the value. We are offering fulfillment services. We are offering modeling for their own internal use. We have reconfigured our staff so that we have more people on the front line talking to prospective buyers. The marketplace has changed, the needs of our clients have changed and, you know, if we don't change, we are a commodity.
Feit: The financials have really become the absolute No. 1 priority to the list owners. It's "give me more services, give me more added value and reduce the commission structure and increase the sales every year." Now, I suppose that is their No. 1 priority, but it seems that they are getting a lot of pressure from above from their management to push harder and harder and get more and more.
Schwartz: Unfortunately, list companies have a very unusual challenge. There are, of course, many, many mailers and many, many list owners that look at the list companies as peddlers that do nothing more or nothing less than a very specific function. And yet, we have all brought all this added value. You could go to the top 20 list companies' Web sites and almost change the names on the front of those Web sites, and when you read the basic services and what is going on, you will find it very comparable. Then you go one step further and you see, as Michelle was talking about, that every day, every week, every month, you run into somebody else who is discounting something even deeper or doing it for nothing. I think that list owners need to understand how to evaluate list companies-what's fair, in terms of service and quality-and, of course, get the most you can for your buck; but understand how much is going on today and how much it costs the list companies to do these kinds of services and have some respect for that. I don't want to sound like Rodney Dangerfield, but sometimes in this business, that's the way you feel.
Feit: As long as they are able to get what they are getting, they are not going to want, expect any less. They are always going to expect more.
Green: Years ago, there was this wave where there was some number of companies that were guaranteeing revenue. We all freaked out and said, "Oh my god, it's terrible," and some list owners went for it, and then two years later, they couldn't make good on the guarantees. If the client is not getting what they contracted for, then they are not going to be happy no matter what the price is. And no one is saying, "I will give this to you for a reduced price, but by the way, I will give you reduced services, too." Who would buy that?
BtoB:Let's move on to prospecting. Is that something that's still stalled because of the economy? Are your clients doing any prospecting?
Green: I know that there are still concerns about overall mail volume cutback, because it is very expensive. However, I think we see prospecting definitely rebounding. Mailers are experimenting with a lot of new things. One is more frequent, smaller mailings we've seen a lot of our clients go to, and trying that with great success.
Feit: Our whole business is based on our mailers prospecting, because they come to rent our list. They're not going to rent names that they already have; they are renting new names. The fact that all of our businesses are here and growing means that there is a lot of prospecting going on out there.
Tuohy: We're seeing people prospect. There are a number of different types of mailers that weren't going to be so impacted by certain kinds of downswings in certain kinds of markets. If you are a business merchandise mailer, people are always going to need pencils, toner and paper, so you're going to continue to try and establish your ability to find new companies and try and get them to be your customers.
Schwartz: Some clients that we work with that traditionally would use only direct mail lists now are doing a lot more prospecting, testing the e-mail. We have integrated this, and they are adding it into their program.
BtoB:How does new federal e-mail legislation affect your business?
Tuohy: I would say in the second half of last year we spent a ton of time and hours on researching law, listening in to teleconferences, talking to our lawyers, trying to listen to what the DMA was saying and trying to figure out what did we have to be prepared to deal with. Then we would counsel our customers and that was one of those added-value things where people were calling every day. I would say a lot of time and effort was put toward understanding the law. Luckily, the federal law went into effect and we didn't have to deal with the California [anti-spam law], which would have been a nightmare.
On the list brokerage and management side, we have had to become experts, and we had to become very adept at explaining and cajoling people to become compliant. So it's been a full-time job for a lot of people here.
Feit: Well, I actually think that this law has done a very big service. It's validated the fact that our industry is here to stay and now, with this law in place, there's nothing that's going to stop our clients and stop our companies from continuing to do this business. Luckily, we had everything in place; we were already accepting suppression files because clients wanted that.
What we had to change was we were not releasing opt-out prior to this law, so we just have to put a system in place, so that an advertiser can get the opt-out from their campaign. It was actually quite an easy transition.
Tuohy: It does add one other task that's involved with the job. There is no way around it. Every single mailer is going to have to somehow suppress their file.
Green: It allowed us to get or maybe forced us to get a little more creative. There are things that can't be done now, so now we're seeing what else can we do. We're looking at coming up with new programs that are interesting, that are totally compliant. The only other thing is that there are still some fears out there. There are people who see all this legislation as a slippery slope. Are they going to legislate direct mail? I think part of what we had to do was allay some of those fears, which I don't think are well-founded.
BtoB:Have any of you seen your clients cut back on e-mail spending specifically because of the spam issue?
Feit: Our clients are continuing to do exactly as they were doing business before, so there is no reason why they even need to stop. It's not like they have to change the way they are doing the e-mail marketing.
Tuohy: What we found is that the people who relied on e-mail more as a total way of doing business and companies that were somewhat smaller and more nimble and sort of had centralized the department where the decision was made reacted much faster. In the larger companies-which have many groups they have to counsel and educate, and decide on what they are going to do corporately and meet with lawyers-it took them longer.
Maybe this is self-congratulatory, but our industry was well-informed, and was active, and was making sure they knew the answer and was keeping people up to date as this went along. This is one of the times we did a good job for our customer. We had the information. We were a resource.
Schwartz: The industry has gone through an awful lot, and it is definitely regaining in health and has always demonstrated the value it provides to our clients and contributions we make to their marketing programs.
Green: We've had a couple of years that were certainly the most challenging since I have been in the business. I definitely see the rebound where we are much more optimistic, and not because we just want to feel good but because of what we are hearing out there and seeing about this year. Part of it is that this is a very innovative industry. When I think back to some of the other times that were challenging, what came after that was almost a renaissance. We got more creative, we saw a lot of new ideas coming forward, a lot of list marketing innovations, a lot of new things.
By Ruth P. Stevens
In any outbound one-to-one marketing campaign, the list will be your single most important variable. The list far outstrips the message, the art, even the offer in its ability to drive results. Oddly, few marketers attend to list selection in a manner commensurate with its value. But you can triple, even quadruple, your campaign response rates through careful list selection.
Here are some techniques used by experienced direct marketers to improve their campaign results:
Begin with the best "selects." Test your way into a new list by pulling the narrowest, most targeted segments, known as "selects." These might be "hot lines," meaning names that are newly added to the file, or segments based on title, function, industry or company size. You'll pay a small premium per thousand for selects, but you will also guarantee your ability to evaluate the list's quality. If the selects don't work, the list is never going to perform for you. If they do, then you can test deeper into the file with confidence. Selects are now available on many e-mail files, as well.
Think multichannel. These days, list owners and list brokers are offering access to target audiences through a variety of media, whether e-mail, postal mail or telephone. Many list managers offer exact matches between e-mail and postal names. So you can choose the most profitable or the most responsive medium for any given set of prospects. Better yet, you can develop multitouch campaigns, wherein you mail first and then follow up with phone or e-mail-or whatever sequence optimizes your results.
Profile your best customers. Once you understand the characteristics of your best customers, you will make better list selection decisions. Make sure you profile for the same elements that are typically available via list rental-product affinity, SIC code, number of employees, gender, job title, job function, state, ZIP code.
Select e-mail lists based on your experience with postal mail files. If subscribers to certain magazines or attendees at certain seminars work well for you in the mail, then the e-mail files are likely to work, too. As many as 25 percent of b-to-b postal list owners will have e-mail files on the market.
Examine the merge-purge report for insights. When you have de-duplicated all the rented names, analyze the "dupe rates" of the rental lists against your house file. You may be annoyed at finding lists with very high duplication rates. Yes, there is waste involved in paying for the names and not mailing them. But relax. In fact, the lists showing the highest duplication rates are going to be the most productive in your mail plan. These are the lists with the highest natural affinity to your customer base.
Get educated on the new CAN Spam Act. One of the key provisions of this act, which provides fairly clear guidelines on allow-able e-mail marketing practices, is that mailers themselves-not just the list owners-must maintain suppression files of anyone who opts out. The Direct Market-ing Association has some helpful information on how to comply with the new law, including an easy-to-read chart at www.the-dma.org/antispam/E-mail_Chart.pdf.
Negotiate pricing. B-to-b lists are expensive. (CFO magazine, for example, gets $375 per thousand for its e-mail file, plus a $50-a-thousand charge for transmission.) But there is room to negotiate, especially if you are renting in volume. And you can combine your e-mail, telephone and postal list rentals into a single price discussion with a single owner.
Hire the most experienced broker you can find. Look for experience not only in b-to-b, but in your industry as well. Find out which brokers your competitors are using and talk to them. Brokers can help you navigate through the maze of CAN Spam, negotiate the best prices and advise you on what's working out there.
b>Dig deep when it comes to e-mail files. There has been a lot of bad behavior in e-mail-land, and you owe it to yourself and your company to mail only reputable lists. Talk not only to the list manager but to the list owner as well. Ask the tough questions about the source of the names. Are they truly opt in, or do they use a pre-checked box? How frequently are the names being e-mailed? How does the "From" line read? What kind of open rates and bounce rates is the owner experiencing?
Test response lists as well as compiled lists. Ask the broker to find out who else has mailed this list. But don't just ask who tested it, but who remailed it. This is the ultimate indicator of performance.
Ruth P. Stevens consults on customer acquisition and retention and teaches marketing at Columbia Business School. She can be reached at email@example.com.
By Christine Blank
Renting and exchanging customer lists is a missed profit opportunity for a quarter of b-to-b catalogers-and a majority of b-to-b marketers, industry observers said.
"The growth of any catalog company will be limited if they are not willing to rent and/or exchange names with other firms," said Stephen Lett, president of Lett Direct, a consulting firm in Bethany Beach, Del.
"List rental revenues can be a major source of profits for b-to-b catalogs," said Ralph Drybrough, CEO of MeritDirect, New York, one of the largest b-to-b list broker and management firms.
Drybrough estimates that an annual rental profit of $2 to $3 per customer name is typical, while some can go as high as $5 per name.
While more b-to-b catalog-ers started to rent or exchange their lists during the recent recession, about 25% still do not, according to Lett's esti-mates from list managers. Quill Corp., CDW Corp., Dell and Consolidated Plastics Co. are among those that do not, Drybrough said.
B-to-b companies and list brokers say the reasons for not renting include: some lists are not large enough to be profit-able; companies want to pre-vent their competitors from snagging their clients; and, for mainstream b-to-b marketers particularly, protecting cus-tomers' privacy outweighs profit potential.
"We made a promise to our customers that if they share their profiled information with us, we would protect it not only from our business partners but the internal IBM brands as well," said Yvonne Brandon, who was global direct marketing manager for IBM Corp.'s software group until December 2003.
The software group protects names as part of a personalization strategy, adopted a few years ago, that allows customers to sign up for e-mail, direct mail and other communication from only the IBM brands they're interested in. "For a retention and loyalty program for people who are already customers, you don't want to do it [rent lists]," Brandon said.
However, there are options for catalogers and b-to-b marketers that are not comfortable with renting lists, including list exchanges and other reciprocal agreements.
Some b-to-b catalogers use exchanges because no money changes hands; they simply exchange a certain number of names for the same amount of names from the partner, explained Peter Candito, president of Transcontinental CC3 List Services, New York. Lands' End Business Outfitters is an example of a company that has reciprocal agreements with other catalogers to exchange lists, Drybrough said.
While exchanges can work well, list brokers issue some cautions. "The difficulty is in keeping both sides of the exchange within relative balance. Invariably, one side uses a lot more names and pretty soon the other side is playing catch up," Drybrough said.
Candito said: "The trick would be to find the balance, as a cataloger, to allow yourself to realize the benefits of incremental revenue but not create a situation that's a bother to your customers." Marketers can put restrictions on the list, such as only renting it a certain number of times and only approving certain offers, he said.
List managers forecast modest increase in e-mail
By Carol Krol
E-mail list rental by many accounts came to a screeching halt in 2003, as marketers remained in legislative limbo over the spam problem. But activity is expected to pick up this year, say industry watchers, who predict a tempered recovery.
"I don't think it will be a bonanza, but I think we'll see people getting back into the mode of a more aggressive strategy," said Ed Mallin, president of list manager Walter Karl, Pearl River, N.Y.
Legislation put a significant crimp in the momentum that had been building for e-mail marketing. Many companies that wanted to continue to use the medium last year chose instead to reallocate dollars to direct mail to avoid being labeled spammers.
"I look at postal vs. e-mail every month, and there was clearly a shift in terms of dollars spent [by my clients] towards postal marketing," said Deb Goldstein, president of IDG List Services, Framingham, Mass.
The legislative concern shown by marketers and list managers was well-founded. Based on multiple state spam laws that were passed last year, especially the highly restrictive California law, e-mail list companies were facing declining revenue.
"It was one of those years that everything that could go wrong did go wrong," said Michael Mayor, president of e-mail list manager NetCreations, New York. "We were thrown challenge after challenge."
The California law that passed in September was the toughest anti-spam law in the country.
"We had a big scare around the California law," said Michael Veit, direct marketing manager at RSA Security, Bedford, Mass., a security software company. "It was so vague that you didn't know what you could and couldn't do."
Others agreed. "There's no question that the latter part of 2003, people were pretty terrified about the implications of the California law," said Mallin. "That would have been a terrible blow to e-mail acquisition."
Federal legislation passed in mid-December preempted state laws. The new law was a relief to the e-mail industry because it created a national standard. But because it went into effect just two weeks after it was signed, companies had to scramble to become compliant.
Adapting to the law
Many e-mail marketers, distribution service providers and e-mail list companies are still adapting their operations to comply with the law, and that may continue to hamper e-mail's recovery. "It's quite a lengthy process," Mayor said.
Smaller companies may have an advantage over major marketers in navigating compliance issues, since larger companies typically have more complex operations. It can be challenging to assure databases are working together. The danger is that an individual who unsubscribes from one company product line could continue to receive unwelcome e-mail from another division within that company.
"Larger companies have many different ways to access e-mail addresses and they're not all connected," said Peter Mesnik, chief technology officer at IMN, an e-marketing company.
List managers are jumping in to help marketers. For example, List Services Corp., Bethel, Conn., recently announced a new service that includes an unsubscribe page, confirmation e-mails and a password-protected site with a database of suppression files.
List executives say marketers may begin to come back to e-mail in greater numbers once compliance is squared away. "Things are picking up steadily," Mayor said.
IDG's Goldstein said: "There is a lot of business that's being promised, even on the e-mail side, that is going to happen in the February-March time frame. There doesn't seem to be anyone that's saying, 'Well, because of this law, I'm not going to do e-mail marketing.' "
Mayor suggested the pain of the past year might have been worth it. "A lot of good came out of 2003 in terms of making us a better list manager," he said. "We owe it a bit of gratitude."
CAN-SPAM alters e-mail list rental practices
By Regina Brady
The dust is settling from the whirlwind passage of the federal CAN-SPAM Act, which went into effect Jan. 1. While most marketers have come to grips with the new law's impact on ongoing communications, many may not realize its requirements have a monumental impact on e-mail prospecting.
Here's a look at the major changes and thoughts on how e-mail list rental practices will change in the longer term.
The marketer is the sender. In e-mail prospecting, the sender is now defined as the marketer whose "product, service or Internet Web site is advertised or promoted by the message." This represents a sea change from the "old" days of 2003 when the industry standard was that the marketing message came from the list owner, which obtained permission to send third-party offers. To allay spam complaints there will still be prominent explanation in the message header or footer explaining why the recipient is receiving the message.
The opt-out link is to the marketer. The law states that in every commercial (marketing) e-mail "there must be the clear and con-spicuous opportunity ... to de-cline to receive further com-mer-cial electronic mail messages from the sender." That means the recipient is opting out of future messages from the marketer.
Now, most list owners require that the marketer provide an opt-out link that goes directly to the marketer's unsubscribe form. This is sensible. It is onerous and potentially dangerous for the list owner to collect this information and be in legal compliance. Mar-keters must be sure their opt-out link works for at least 30 days after the prospect message is sent and must process opt-outs within 10 working days.
Marketers must include a postal address in each e-mail. This is a modest change to the message content and already is being implemented on all retention e-mails. It is easy to comply with this change.
No prospect e-mail should go to an e-mail address that has previously opted out from the marketer. This is the thorniest change mandated by the federal law. The premise of CAN-SPAM is that individuals who have indicated they no longer wish to receive a marketer's message should have their request honored. To be compliant, a marketer must now provide the list owner with an opt-out suppression file that the list owner must match against all individuals on its list. If an e-mail address is found to be on the marketer's opt-out file, the name must be deleted from the mailing.
So, what does this mean for marketers? You must build an internal suppression file of all opt-outs. You must provide this file to each list owner whose file you wish to use, and you must provide this on a timely basis before the mailing.
Marketers affected least by this requirement are those whose opt-out pages allow specific opt-out choices.
So, what's the future for e-mail prospecting? In the short term, prices will increase. List owners now must do additional processing to prepare any order. This charge is reasonable since it represents an additional burden on list owners.
In the longer term, expect to see "traditional" merge-purge services finally put in place for e-mail. Up until now, market-ers had no way to ensure individuals received only one prospecting message since merge-purge was virtually non-existent and each mailing was sent by the list owner. List owners were compelled as the sender and the entity with responsibility for immediate processing of opt-outs to handle all aspects of e-mail prospect-ing. Now, the marketer is the sender and also the recipient of opt-outs, so we should see the dynamics change.
It will now be practical for marketers to do a merge-purge on all e-lists using their global opt-out file to ensure only interested individuals receive a prospecting or lead-generation e-mail. This allows marketers to ensure that only one message is sent to one individual.
Regina Brady is president of Reggie Brady Marketing Solutions, a direct and e-mail marketing consultancy. She can be reached at firstname.lastname@example.org.
Web tools enable users to build lists
By Roger Slavens
As several list management companies beef up their online, self-service Web sites, industry experts say it’s becoming easier, faster and cheaper than ever for marketers to build prospect lists.
“These tools really put marketers in the driver’s seat, giving them an enormous amount of control,” said Cyndi Greenglass, president-agency services for Naperville, Ill.-based Diamond Marketing Group. “They can go online, get counts, perform a high-level segmentation analysis and download their customized lists in minutes—often for a fraction of what they’d be charged working one on one with a salesman or broker.”
Greenglass, who also serves as president of the Direct Marketing Association’s B-to-B Council, said that building lists themselves will ultimately “make marketers smarter.”
Industry giants such as D&B and Infuse have been developing this self-service automation for the past few years, continually updating their interfaces with new list-building capabilities.
15 million businesses
All InfoBase’s lists, including a compilation of more than 15 million North American businesses, are available for online slicing and dicing, said Rakesh Gupta, VP-marketing for Omaha, Neb.-based InfoUSA.
“Today, you can narrow down your list with an almost endless range of categories, from industry type to geography to specialty fields such as job descriptions or even URLs,” Gupta said. “Marketers can play all they want with the lists without having to register, and we’ll give them the first three prospects for free as an appetizer.”
For those who have questions, customer service is available 24/7, Gupta said. “But no one gets in your way, no one gets personally involved in the transaction unless you want them to,” he added.
InfoUSA caters primarily to small and midsize business such as Poughkeepsie, N.Y.-based Gilman + Ciocia, a tax and financial services company. “With InfoUSA’s automated service, I’m able to go online and build lists of 25,000 individual and company names by ZIP code, income and other variables,” said Laurie Macionne, assistant to the president and Gilman’s de facto marketing director. “We do very targeted marketing in very specific regions, and this tool allows us to tailor our lists any which way we want. It makes building our lists so much easier.”
Zapdata allows list previews
D&B offers self-service list building through its Zapdata.com portal. In addition to standard online segmentation features, Zapdata offers premium annual services. “We offer what we call our List Builder subscription, which allows users to preview all businesses in the list, then sort, delete and create cross-tab reports,” said Tom Gaither, VP-marketing for D&B’s Sales & Marketing Solutions unit.
For $450 annually—in addition to the cost of the lists themselves—List Builder also includes one free upload of a client’s list to suppress company names, as well as suppression of all previous Zapdata lists the client has licensed, Gaither said. “Another level, at $1,250 a year, gives marketers up to 40 opportunities to purge against their companies’ proprietary lists and much greater analytic capabilities,” he said.
Smaller list companies are getting in on the automated action, too. Data Dialog Marketing has modeled its operations on the cutting edge work of the industry giants. It offers two Data Dialog Select subscriptions of 20,000 names, one that segments based on geography for $250 per year and another that adds demographic segmentation for $395 a year.
“That’s pennies per name, and they can download as little as one name at a time,” said Steve Main, Data Dialog Marketing’s national sales manager.
The larger list companies also give their customers a big bang for their buck, said Diamond Marketing’s Greenglass. “Automating the list-building process greatly reduces their operational costs, and they pass some of the savings along to marketers,” she said. “They’re also offering subscription-based payment plans, which allow marketers to lock in lower rates by buying a large quantity of names upfront.”
While list brokers fear they may get cut out of the loop by some marketers that migrate their list building online, Greenglass doesn’t believe they’ll suffer greatly. “There will always be a place for list brokers,” she said. “Marketers need their knowledge and insight. And that’s especially true in b-to-b, where relevant lists are hard to identify.”