by Ron Kahan

An independent list broker's job is to meet with the client and learn the precise target market for his or her product or service. "Independent" is the operative word. Certainly, there are fine companies representing quality list products that they compile and/or manage. However, their job is to direct clients to a selection from their product menu.

A good broker then will research the 30,000-plus direct marketing lists that are commercially available and make a recommendation. Although only one list may be suggested, many times, a hybrid or two or more lists will be recommended to best target the prospective customer.

The services of an independent list broker are no more expensive than internal avenues of list research. Brokers are paid by the list company from which they acquire the files. The cost to end-users is the same, whether they contact the list supplier directly or use a broker.
The benefit of using a good broker is that it enables the client to tap into years of experience in data acquisition. The process is not easy and involves many nuances; insufficient familiarity can cost the client thousands of dollars.

A sampling of questions that should be asked prior to acquiring a list include:

• How is the file compiled?
• At what intervals is it updated and which fields or regions are updated when?
• Is the file offered for one-time, two-time or unlimited usage rates?
• Are telephone numbers and other selection criteria available?
• How old is the oldest record?
• What companies have rented the list more than once (continuation orders)?
• The third question refers to the list rental agreement. Lists are not sold and bought, but rented, and terms of rental agreements specify rights to use of the lists.

Those terms fall into three categories:

• One-time usage grants rights to use the list once, for a single promotion-usually either one direct mailing or one telemarketing contact.
• Two-time usage permits the list to be used twice, but for a single campaign-such as a direct mailing followed by either another direct mailing (teaser and order) or an outbound telemarketing campaign. For the second use, the list typically is rented at a discounted price.
• Unlimited or multiple usage is not so unlimited; it allow multiple use of the list within a 12-month (one calendar year) period.
• In all cases, if the client receives a response to a promotion, the client owns that individual record. Non-respondents cannot be solicited again unless arrangements are made pursuant to the list rental agreement.
• Pricing of rented direct marketing lists depends on the usage agreement between client and list supplier.

Direct marketing is self-regulated; privacy concerns have prompted right of refusal
as standard practice. Therefore, list providers must see a sample of the mailing and/or telemarketing script prior to list rental and may decline the rental if they believe the offer is unethical or in poor taste.

Another standard practice is "seeding" the list, meaning mixing decoy records in with lists as a means of monitoring list use. Terms of rental agreements forbid end-users, or agents thereof, from isolating seeded records in any manner and for any purpose (such as sending different, safer communications, or none at all).

Direct marketing lists can be grouped into the following major categories:

• Compiled lists are composed of individuals, households or businesses whose names are derived from directories or other printed material. Most national compilers include phone numbers, as well as name and address information.
• Response lists include individuals or establishments that previously have responded to a direct marketing promotion, by either requesting additional information or buying products or services.
• New move lists are generated from individual or business change-of-address data or new household or business data sources. These lists are excellent resources for businesses wishing to be the first to welcome new prospects to a neighborhood and to build store/customer loyalty and buying habits.
• Donor lists (typically considered response lists) contain names of people or businesses that have donated to a non-profit organization.
• Subscription lists are made up of individuals who have requested to receive magazines, newsletters or other periodicals.
• Finally, representing the client's most valuable asset, are house lists, also known as customer files, which include the names of present and past client customers.
• Different numbers have been bandied about concerning the contribution, percentage-wise, of a specific list to a successful direct marketing campaign. The bottom line: Clients should utilize all resources at their disposal to ensure that targeted marketing objectives are met by the direct marketing list being used.

Ariss Kahan Database Marketing Group, Inc. assists clients build customer relationships through proven and innovative database marketing techniques and marketing database technologies. They specialize in customer acquisition, retention, cross-sell and up-sell initiatives and can be reached at (303) 368-9800 or via e-mail at rkahan@dbmktg.com.