Notes from DMA Master List Class in New York

In August I attended the DMA List Vision seminar in New York. This year I took the Master Class and learned a lot about the latest thinking, tactics and strategies concerning list management, brokerage, hygiene and much more.

Lecturer: Seth Radwell, e-Scholastic Magazine

Continuity in an Age of E-commerce

This was the kick-off lecture and it dealt with e-commerce, not lists specifically, but I found the content very interesting.

• Benefits of commitment are dubious. Customers are asking, “Why sign up for a long-term commitment to one product or source when I can get anything I want, when I want it, for a price I feel like paying?”
• However, commitment is not dead; continuity just needs to be reinvented

Examples of Successful Continuity-based Consumer Models:

• Netflix
• e-harmony.com

What Makes These Models Work?

• Transparency: Customers can see what they’re getting
• Control: Customers can change the terms of their commitment
• Simplicity: Flat price, low-cost or free shipping, few conditions

What Drives These Models?

• Computer-mediated conversations that give people what they want and also contribute to learning more about the customer in order to anticipate their wants

Content marketing

• Content marketing delivers a message to the prospect that has value in itself. The first contact doesn’t necessarily ask for a sale, but is meant to open a dialogue with the prospect
• Content marketing uses “pull devices.” Pull devices are things given up front to prospects and are targeted to the prospect’s known interests. They pull prospects into a dialogue with the company
• An example of a pull device might be tips that a publishing company sends to parents on getting their kids to read

Customer churn

• Customers are more likely to stay with a company when the relationship is transparent, customer controlled and simple to understand

Lecturer: Kris Snyder

This class dealt more directly with lists. Kris broke the class into three segments: The Past, The Present, and The Future. At first I questioned how valuable it was to know the history of lists, but after we got into it, I found it was my favorite section. To really understand how to use lists creatively, you have to know how lists came to be in their present form and where they are going in the future.

RFM: Recency, Frequency, Monetary. These are valuable things to know about a name on a list.

• Recency: How long has it been since a prospect bought?
• Frequency: How often does a prospect buy?
• Monetary: How much does a prospect spend?
• Amount of last purchase
• Average amount of purchase over a period of time
• Lifetime value of purchases

ZIP Code: Zip Improvement Plan

• 1963 Zip Code introduced
• 1967 Zip Code becomes mandatory
• Mandatory Zip Codes made it possible to eliminate duplication

1960s: Women entered the workforce in large numbers. This increased their buying power tremendously. They had more money and less time. Direct marketing really took off in this period and lists began to become more sophisticated.

For Whom Do the List Brokers and Managers Work?

• Both work for the list owners
• Broker’s commission is 20%
• Manager’s commission is 10%
• Costs are always negotiable
• 80% net is usual for orders of more than 50k names—this means you pay for only 80% of the names instead of 100%

List hygiene

• NCOA: National Change of Address—list is updated with change of address forms submitted to the USPS
• CASS: Coding Accuracy Support System—validates addresses to the block level
• DSF2: Delivery Sequence File Second Generation—validates addresses to the delivery point
• Eliminates nixies: unmailable addresses
• DMA Do Not Mail list: People who have asked not to receive direct marketing—there used to be a list of people who requested to receive DM, but those people didn’t buy. I asked if people are given the opportunity to be specific about what kind of mail they want to get, and Kris said no they are not, but that it is a good idea

New ways of correcting bad addresses: CDI: Consumer Data Integration

• Traditional mover-correction systems can’t correct bad addresses
• Incomplete addresses can’t be ZIP+4 coded—cost more to mail and might not be deliverable
• CASS and NCOA validate to the block level, apply carrier route and bar coding
• New private systems can correct 35% to 50% of bad addresses that can’t be validated by CASS
• Lowers postage and improves change-of-address match rates by 10% to 25%
• Uses occupant’s name and address to amend information and make changes
• USPS gives 6 to 8 cents off postage for applying the correct bar code
• Many files come with a 10% or higher undeliverable rate

Segmentation

• Compiled lists: Demographics
• Responder lists: Psychographics
• Vertical lists: Interest-specific
• Competitive: Names your competitor is mailing to
• Affinity: Names of people belonging to certain group

Control groups

• Kris’ opinion is that it’s not economical to hold out names when you are using multiple lists

Rule of 100

• You need to get 100 responses to any test cell to have a 95% certainty that the rollout of that test cell will return a similar performance

Questions to ask about the list you are renting:

• When did you last update your list?
• How often do you update your list? (30-day, 3-month, 6-month hotline)
• What promotional techniques were used to generate the lists I’m renting?
• What about seasonal buyers?

Co-op databases

• Co-op databases are groups of lists from many different sources
• They allow you to identify multiple-source buyers
• List owners surrender approval over mail specifics
• In a cold test, only 2 out of 10 lists worked at an acceptable rate

List facts

• Once you’ve found a list that works, up the quantity to 10 to 25k names (Rule of 100)
• Performance of a list will fall off by 10% at 5 to 10k
• Performance of a list will fall off by 15% to 20% with larger numbers
• The larger the number of pieces mailed, the lower the performance
• Re-uses fall off by 25% to 30% and cost less
• 20% of U.S. population moves each year
• 70% of business people have at least one change to their business cards each year
• There are companies that update business lists

Trigger marketing B2B and B2C

When people move, get married, or have owned a car or appliance for a particular period of time, they can be good prospects to sell by direct mail. When businesses ramp up staff, win a large account or change their name or address, it means they might be in the market for new equipment, stationery, etc. Also, when people or businesses carry a heavy credit balance or are late in paying their bills, you might want to weed them out of your list.

Trigger Marketing Allows You to Pick and Choose Your Trigger Criteria and Adjust Your Mailing List Accordingly

• Allows companies to identify prospects most likely to respond
• Reports changes in prospect’s demographic information and credit status
• Can direct you to likely prospects for different kinds of products/services
• Can direct you away from prospects who are bad credit risks
• B2B trigger marketing is relatively new
• B2C trigger marketing has been around for about 5 years
• Can subscribe to services that will send you automatic alerts
• Can choose from 19 trigger events
• Of the 16m businesses Experian monitors, 3.5m have some event each month
• Trigger Marketing is accomplished through persistent ID—each business has a constant ID number so even if it changes names, it is still identifiable

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