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THE LIST INDUSTRY

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The success of every direct marketing enterprise depends on the strength of its customer and prospect lists. Even a package with a surefire offer and attention-getting graphics will bomb if it is sent to the wrong list.

A list represents a market segment and there are many segments of the market in today's diverse society. According to Standard Rate and Data Service, more than 9,000 lists can reach everyone from gun enthusiasts to deep sea divers, readers, antique collectors, opera season-ticket holders, sweepstakes respondents, computer analysts, millionaires, retired executives, and more.

Three kinds of lists are available for rent:



Compiled lists - Names compiled from telephone directories and other sources of public information, such as property transfer records, state driver's license bureaus, and voter registration records.

Response lists - Lists of people who have already responded to an offer, such as people who purchased from The Sharper Image, subscribed to Fortune magazine, ordered flowers, steaks, fishing tackle or wine by mail, or responded to an 800-number promotion. Consumer response lists contain names of consumers at home; business response lists consist of professionals at work.

House lists - A company's proprietary list of customers, which it uses for its own promotions and selectively rents out to companies with noncompeting offers. House lists can be huge. It's said that the house list for Fingerhut, the Minnesota direct marketing giant, is over 6 million strong.

The people who buy, sell, manage, enhance, and recommend these lists comprise the mailing list industry. The main players are list brokers, list managers, list compilers, and the service bureaus that massage lists in an effort to increase their profitability and limit the waste created by mailing to the wrong names, expired addresses, or duplicates. Their clients are companies seeking to expand their customer bases by adding new names or generate revenues from their house lists through rental activities.

LIST BROKERS

List brokers match the marketers seeking new names with those list owners and managers who have lists for rent. A broker has no vested interest in any particular list, but sells his or her ability to find and recommend the "right" list for a particular venture. This entails researching and evaluating dozens of lists that at first glance appear to have little to do with the client's product or offer, but on a closer look may provide exactly the market segment a mailer is trying to reach.

For example, a good list broker would know that Time magazine subscribers, a largely upscale and aware audience, are a good list for a wide variety of fund-raising appeals.

List brokers help marketers select appropriate lists, plan mailings, analyze response, forecast response to future mailings, and will sometimes consult on a client's marketing strategy. They must also be familiar with segmentation and enhancement technology that adds demographic or psychographic detail to rental lists to help identify and break out the potentially profitable segments.

The entry-level job in the list brokerage business is assistant account manager. This person does lots of legwork: calling list owners for information about list characteristics and prices, researching lists, placing orders, following up on delivery, handling invoice and billing problems. While an assistant account manager communicates regularly with list owners and managers, he or she may not have as much contact with clients.

An account manager is responsible for the day-to-day service of a client account. He or she meets with clients, investigates their list needs, and then analyzes and recommends the lists that will help clients meet their revenue goals. Account managers must have a keen grasp of a client's market so that they can assist clients in identifying new pools of prospects or expand existing pools. In addition, account managers help prospect for new clients for the brokerage firm.

Account managers and assistant account managers report to a vice-president/account supervisor, who oversees the work of two to four subordinates while handling several major clients directly. New business prospecting is an additional duty.
Succeeding in the list brokerage business takes ambition, a love for markets and lists, an eye for detail, and strong oral and written communication skills. But a head for numbers is perhaps the most important quality of all.

"Direct marketing is a measurable business. Anyone looking for work in the list industry should have basic math skills, including a foundation in statistics," notes Richard Vergara, executive vice president of The Kleid Company. "Our clients often give us the results of their most recent mailing and ask us to figure profit and loss for each of the lists they used. Based on those numbers, we then recommend which lists to continue to mail and which ones to drop. Even though clients can handle this analysis themselves, the trend is for people to ask brokers to handle it instead."

LIST MANAGERS

List managers rent lists to brokers or directly to mailers. As marketing consultants and salespeople, they are experts on the contents and the performance track record of the lists they manage.

List managers can work in-house or for a company that specializes in managing lists. One in-house manager is Connie Howard, list manager for CareerTrack, a Boulder, Colorado-based company that presents business seminars and sells audio and video tape programs on business skills.

For eight years, Howard has been chief promotions manager of CareerTrack's list of seminar attendees, which has grown from 5,000 names in 1982 to 2.5 million in 1992. When she first began, she was involved in every step of the process of promoting and renting CareerTrack's list: writing and proofing rate cards (which let potential renters know how much a thousand names cost, and what kind of "selects"-i.e., special segmentation options are available), conducting sales presentations, designing promotions, fulfilling orders, invoicing renters, and overseeing the delivery of magnetic tapes and Cheshire label lists to clients.

Today, she and her three associates rent approximately 25 million names annually. An expert on the characteristics of CareerTrack's house file, Howard can counsel potential clients on how to get the most of it. "Some people find our 2-million-plus file too big," she admits. "Very few people can make all 2 million names work, especially in this economic climate. Our job is to help them find the targeted names on the file that will work for them.

"CareerTrack's strategy goes beyond traditional segments like 'professional women,' 'management,' and 'upper management.' We can help clients target markets such as computer professionals, finance and accounting managers, or technical specialists. That's why our list is popular with major business-to-business and consumer mailers. They know CareerTrack names will be excellent prospects for magazine subscriptions, business office products, newsletters, and financial services as well as fashion catalogs and other consumer offers."

Success in list management, Howard notes, requires a sensitivity to the nuances of the list market, which has slowed down somewhat in recent years. "You need to understand what potential clients are looking for, and make sure you offer as much added value as possible, through precise segmentation, demographic information, and top-notch customer service.

'To be really good, you need to have a passion for lists. It helps to really enjoy matching a mailer's offer to the most appropriate segment of your file. Of course, a list manager is fundamentally a salesperson so your selling skills should be very strong.

"My position as an in-house list manager is unique. Instead of managing several files, I only manage one-albeit a big one. I think an intimate knowledge of a house file such as CareerTrack's is an asset no matter what corner of direct marketing you want to move into. If you know your customer inside and out, you are better prepared to plan new products, devise marketing strategies, and pull together brilliant creative."

List managers who work for professional list management companies routinely handle several lists at a time. They promote the lists to prospective renters through promotions and rate cards, trade show exhibitions, advertisements in trade journals, and personal and telephone sales calls to brokers and list renters.

Often, one company will offer both brokerage and management services through two separately operating divisions. The Kleid Company's management division represents about 100 lists, including the subscriber lists of Cond6 Nast magazines. Each of its account representatives handles a group of lists that ranges from five to fifteen. These account reps handle all contact with list owners, and serve as resources to brokers and mailers who call for information about the content, characteristics, and performance of the lists. They know how a list was generated, who is on it, what kind of offers it has been successfully used for, and how it can be segmented.

Assistant account representatives support the account representatives by processing orders, coordinating delivery, and preparing orders for
billing.

Sales managers or sales directors sell managed lists to brokers and mailers and handle presentations to list owners searching for a management firm.

A vice-president or account supervisor oversees the work of these lower-level employees and also handles high-level client contact. At the very top, a general manager runs the list management operations and if the division is part of a combined brokerage/management company, reports to the principals or president of the entire company.

At The Kleid Company, & financial specialist handles earnings projections for prospective clients who are interested in discovering what their lists are likely to earn in a year. He or she also runs the numbers for current clients, who receive an annual projection of rental income.

Although Kleid works with an agency to produce promotional material for the lists it manages, other agencies have in-house creative staff. They write space advertisements, sales letters, and direct mail brochures that promote the lists to the trade.

LIST COMPILERS

The list compilation business was born in 1947, when Rose Rashmir hired women in Redlands, California to type labels directly from telephone and municipal directories for a national list of potential customers for the Diners Club.
Today, list compilers continue to develop lists by capturing data from a variety of commercial and public sources, although lists and labels are no longer typed by hand. Information on consumers is compiled from telephone directories, voter registration lists, automobile registrations, and other public information. Information on businesses is often obtained from professional organizations or trade show attendees.

Large compilers like Metromail, Polk, and Donnelly have databases with marketing-oriented information on millions of individuals and households in more than 10,000 compiled lists. This information is often enhanced through demographic information that can add data about sex, income, age, family size, car ownership, telephone number, and neighborhood demographics to a simple name and address file.

List compilers require the services of data processors, computer programmers, program analysts, software engineers, and sales representatives. It takes the work of detail-oriented professionals to keep the lists up to date (a problem, since the public records on which these lists are based are sometimes a year old before they are published) and marketable.

SERVICE BUREAUS

Service bureaus were introduced on the heels of the Zip Code in 1963, when mailers needed someone to organize, maintain, and presort lists in Zip Code order to take advantage of new postal service discounts and incentives. Over the years, service bureaus also began to offer merge/purge services, which combine two or more lists into one to identify and/or eliminate duplicate names.

Today, service bureaus can help a mailer segment lists by geography, income, and other characteristics; they can also analyze response, offer sophisticated demographic data overlays that add meaning to a list, and convert lists to Cheshire labels or magnetic tapes. (Cheshire labels are gummed address labels printed on continuous forms, machine-cut and machine-affixed to a mailing envelope.) Some offer list management services that help mailers add, delete, or alter names and records on a house list.

Some service bureaus are taking on the look and feel of database consultants, and now offer cutting-edge data processing, analyzing, and modeling techniques. That's why personnel in service bureaus must have a very good grasp of computer and technical skills, including statistical analysis. Even salespeople need to understand the technical side, in order to credibly sell their services to brokers, managers, and mailers.

MOBILITY IN THE LIST INDUSTRY

As Connie Howard of CareerTrack points out, a knowledge of a list or more than one is a great asset to a career in direct marketing. Richard Vergara concurs. "Once you become a list specialist, you can be in demand on both the brokerage/management side and the client side. Lots of direct marketing companies are looking for list specialists." As for getting started in the business, he observes that, "the ideal way to break into the list business is to start out on the client side and learn how to put a mailing together. That hands-on experience will pay off in the brokerage business."

According to Richard Vergara, it is more common for people to move from list brokerage into list management for a management company or a client than it is for list managers to become list brokers. "The skills of list brokers are a little more specific."

SALARY RANGES

Anyone interested in entering the mailing list industry must have a head for numbers, as Richard Vergara points out. Also helpful are good oral and written communication skills and basic knowledge of computer programs like Lotus. This analytical corner of the business demands an ability to plan and analyze. Computer analysts, software engineers, and other highly technical positions require high-level technical knowledge and advanced degrees.

List brokerage firms

Professional list brokers earn commission on top of a base salary. The base salary can be as little as $20,000 but the sky is the limit for brokers who produce.
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