“Experience teaches slowly and at the cost of mistakes.” – James A. Froude
A common mistake made by novice direct marketers is to create a promotion and then, almost as an afterthought, look for a list to mail it to. They have it backward. The right way to do direct mail is to first understand, find, analyze, and know your audience — including their wants and desires — and then tailor a sales letter to this specific group or list.
There are many things to know about mailing lists — and we cover much of it in ETR’s new course, Mailbox Millionaire. But, basically, there are three things about mailing lists that are important to your DM success — though they may not be immediately obvious.
1. You never know in advance which mailing list will work for your offer — and which won’t. So, you should never look at a bunch of lists, pick one, and gamble your success or failure on it. A better approach is to test three to five or more of the most likely candidates, measure the results, and then roll out your mailing to the ones that are profitable.
The test results often surprise us.
For instance, one of my clients was selling software for a particular kind of computer platform to which two computer magazines were dedicated. The magazines seemed almost identical in content, so we figured there wouldn’t be much difference between the two subscriber lists. But when we tested, Subscriber List A generated three times the response rate of Subscriber List B.
Had we picked one at random and had it been B, our mailing would have been a flop. Instead, it was a winner.
Here’s another example: A car-rental company wanted to test direct mail to sell car rentals. The three relevant facts: (1) they serve the consumer market only, not business; (2) they are in Florida; and (3) they rent cars by the week, not by the day.
What type of list would you choose?
You might say “Florida residents.” But most locals need a car only a day or two while theirs is in the shop. They don’t want to rent by the week.
Other lists that were considered included customers from Disney, airlines, travel agencies, hotels, and subscribers to travel magazines. But one list outperformed all of these: a list of Florida condo owners.
Why did it work?
Many condo owners fly from the Northeast to Florida. They don’t bring their cars and they need one when they stay at their condos. And these condo owners usually need a car a week at a time.
2. Never rent a list directly from the list owner.
The list owner has a self-serving motive for renting you his list: to make money. Therefore, you should always rent your mailing lists from a list broker.
A list broker has access to all the lists available on the market — and a good one can recommend the best lists to reach your market. The broker has no proprietary interest in renting you List A vs. List B. His job is to get you good results. If your mailing is successful and makes money for you, he knows you will come back to him to rent more lists. List brokers do not charge you to make mailing-list recommendations. They get paid only if and when you actually rent a list from them. Even then, the cost of their advice is zero. You pay the same amount of money to rent a list from the broker as you would going directly to the owner (similar to the way you don’t pay extra to get plane tickets from a travel agent).
3. There are two basic types of mailing lists: compiled and response.
Compiled lists are names compiled from various sources, such as public records or the Yellow Pages. These can work well when you are doing lead-generation mailings and want to reach a specific market, such as lawyers in California or factory managers in a particular industry.
But when you are selling products or services via mail order, avoid compiled lists. Use response lists only.
A response list is a mailing list of people who have responded to a direct-marketing offer and have purchased a product through the mail. The best response lists are likely to be lists of buyers who have purchased a product similar to yours at a similar price.
Tip: When renting a response list, ask for the “hotline names.” These are the mail-order buyers who have bought recently, usually within the past 12 months. The hotline names almost always outperform any other names on the list.
(Ed. Note: Bob Bly is the editor of Mailbox Millionaire, ETR’s program to help you start your own successful direct-mail business.)