Here is a top 10 checklist of what to look for in order to find the best list manager:
1. Do the research.
First, obtain a comprehensive list of list management companies. There are several things you want to determine when evaluating a prospective list partner: How big is the company in terms of number of employees and revenue? Who are its clients? Is it mostly a list broker or a list manager? Does it have a specialty as far as the lists it manages? What clients does it have that are similar to your company? You may have to do a bit of legwork to find this information, but trade publications and organizations are a good place to start, and references are always helpful.
2. Decide: Big or small?
Deciding whether to hire a big list company or a small one will depend on several factors. Size can be a plus in terms of the company's ability to cross-sell your file to mailers that are using other files it manages or to its brokerage clients. On the other hand, if your file represents a relatively small opportunity for a large company with big accounts, there may be the potential to get lost in the shuffle. In that case, better resources might be available at a smaller shop where you are a bigger fish.
While the actual infrastructure of the list company is important, ultimately it is the salesperson assigned to the list who will have the greatest impact on the bottom line.
3. Look for similar clients.
A company that has been successful selling lists similar to yours is likely going to be a good fit. If you publish a b-to-b magazine, for example, and 95% of a list manager's clients are consumer magazines, that would obviously not be a good fit.
4. Narrow your search.
Once you've done the research and found list companies that are strong on the management side and handle lists similar to yours, call each to gauge reaction and level of interest. A good first barometer is the enthusiasm a company shows about working with you. That will aid in narrowing the search to a few companies. Ask each for a proposal. Four proposals or so may be a good goal for your finalist list.
5. Prepare an information package.
If your list is already on the market and you are exploring a move to a different manager, you want the companies that pitch to you to be able to commit to a revenue target for the first 12 months they manage your list and growth targets thereafter. Provide current list usage so potential new managers can make an accurate projection. Prepare three years of list-by-list details of names rented and exchanged, and the dollars associated with these transactions. Always make sure to provide product samples if applicable, sales materials and detailed information about the makeup of your customer file, such as breakdowns by source they were sold through, value of the average sales and recency of the transactions.
6. Line up Sales presentations.
Schedule the top contenders to come in to make a presentation. This is a good opportunity to meet with senior management-often the president or CEO at the smaller shops-and get a good feel for how they run their business. Ask them to bring along their proposed account manager if possible.
Make sure they can defend the revenue projections they make. Ask what new files they have taken over in the last 12 months and how they have performed.
7. Would you buy a list from this person?
The president of the company and the VP of list management might do the sales presentation to you, but they are probably not going to be doing much of the direct sales on your list. Because so much is riding on the salesperson, this is one of the most critical parts of the list manager search process. Find out who the prospective list managers propose assigning to your account and set up interviews with them. Find out what other accounts they work on, how long they've been in the business, where else they worked. Ask how they would approach the sales and marketing of your list. See if you get a good vibe. Do you like their style? Would you buy a list from them?
8. Check references.
Checking references is one of the most critical factors in your list management search. Talk to people who have similar kinds of files and find out their experience with each vendor. Ask the right questions: Do they have enough resources or are they stretched too thin? Did they meet revenue goals last year? Do you see any trends, positive or negative, with their list management division? For example, did they just take on a huge new account that is going to take up a lot of their attention?
9. Put together The deal.
The standard commission for a list manager is 10%, but this is negotiable. You should consider getting some protection in case the manager doesn't meet its targets and also offering incentives if it exceeds them. You can also negotiate the amount of promotion the manager is willing to do on your behalf.
10. Set Contract terms.
Most list managers want at least a one-year commitment. This is fair and appropriate because it takes at least 12 months to judge their performance. The sales cycles are relatively long-they need to start by generating new tests, then retests and so on. It takes time. Sometimes managers will automatically renew contracts for another year if you don't notify them 90 days or so in advance. I prefer to be able to terminate the agreement with 90 or 120 days' notice at any time after the initial one-year term.
Finding the right list manager can be a difficult and time-consuming process. But for many businesses, list rental revenue is an important piece of their mix, so getting the right manager is a critical task.
Greg Wolfe is president of Circulation Specialists, a Norwalk, Conn.-based magazine circulation outsource company. He can be reached at [email protected]