Why Some Lists Work and Others Do Not
By David Bancroft Avrick
It's amazing. You read a datacard and the description of the list that
you're planning to select appears to be a perfect match to your customer
profile. You rent 5,000 names and mail them. Your mailing is a disaster!
What went wrong?
You immediately double check the datacard - yes, it still looks right. You
call your list broker and ask: "did they ship the right names?". The list
broker checks and says: "yes they shipped the right names".
So now you're left with the question: Why do some lists work, and others do
What criteria are important when selecting a list for testing? I've compiled
factors that can and should be used when deciding whether or not to test a
For years we've talked about RFM: Recency, Frequency and Monetary. And these
are unquestionably critical elements in list analysis. But there are many,
many others. Depending on your offer, some will be more applicable than
others. But each of these elements will impact on why some lists work to
your offer, and others do not.
The more "alike" the prospect on the mailing list you are considering is to
your customer, the better the success you will have. So the first thing you
must do is to figure out what your current customer is like; including what
kind of offer you originally sent to them that converted them from a
prospect to your customer.
Let's start looking at what will make a list work. Depending on your offer,
the importance of these characteristics will vary.
Is the list owner renting your list? One of the best signals that a
mailing list will work for you is that the list owner is renting your list.
Conversely if the list owner tested your list, but did not continue, there's
a good chance his list will not work for you either.
Are the prospects within your defined target market? You might have a
datacard that, at first glance, describes a list that's very similar to your
best prospects. But, you must look deeper. For example, a wealthy homeowner
in an urban area, who spent $500+ on a mail-order product, is still not
going to buy your snow blower, which is only practical for someone with 2 or
more acres of land.
Gender. Is there a gender prejudice to your offer? What percentage of
your list is male? If your offer is predominantly male, is the list
you're looking to rent overwhelmingly male? If the list is 50/50, that does
not mean you can select just the male names. If you're selling a 'macho'
product, and you select just the male names from a list that is only 50%
male, there's a good chance your offer will bomb. Why? Because the nature of
the offer that the outside list responded to may not have been macho enough.
So looking for "male" lists is very different from selecting males from a
Check the gender, does it make sense? If you're in the business opportunity
area, for example, the typical list will contain 70%-80% male names. If the
datacard shows the male/female breakdown is 50%/50% the list is probably a
'work-at-home' product, irrespective of what the datacard language says. You
can use the gender as a reality check.
There's a difference between demographics and the type of purchase. A
900-number psychic reading company might generate an average order of $90.
But the average age is probably 34 and the average income is $28,000. A
datacard showing an average order of $90 might sound terrific for a
high-ticket offer. You must study the actual nature of the offer that was
made to determine if it is a 'fit' for your-ticket proposition.
How did the people pay? Did the buyers on the list you're considering
pay by check or credit card? Did they respond to a soft, 'send no money now'
offer? Did they call an 800 number? If you're making a cash (check) offer,
renting the names of people who bought using a credit card will
significantly hurt your response.
Seasonality is different from recency. Everyone talks about 30-day
hotlines. The hotter the better. Many people are renting names on a weekly
basis. However, your offer might be impacted by seasonality. For example, if
you're sending out a Christmas offer, you'll probably be better off renting
the names of people who responded to a Christmas offer last year, than a 30
day hotline. If you're selling seeds in the pre-planting season, you're
probably better off renting names of seed buyers from last year's
pre-planting season rather than names of people who just bought 30 days ago.
New to File or Repeat? When you think in terms of recency,
differentiate between new-to-file names and repeat buyers. If someone bought
from Land's End 150 times, what are the odds that they are going to become
your client? However, if they just sent in their first order to Land's End,
that means they're willing to 'try something new', and they would probably
be an excellent prospect for your offer.
What is the nature of the proposition? Are people buying as a result
of a $10 million sweepstakes? Are they buying because they also get a
half-dozen mystery gifts? Is the list you are considering renting highly
promotional? If any of these are true, your straight, no frills, no
sweepstakes offer is probably not going to work.
Dollar Value. Carefully check the dollar value of the buyers on the
list you're renting. It's almost impossible to get $200 out of a $2 buyer.
If the average order is $25 - and you've got a $100 offer - find out if you
can select the higher priced names. If not, you'll probably be better off
not mailing that list.
What were the terms and method of payment on the list you're renting?
Was it 'send no money now, we'll bill you later?' Was it a free trial? Was
it pay 4 equal installments of $12.64? Even though these people made a $50
purchase, that doesn't make them prospects for your $49.95 cash-with-order
offer. Can you select by offer? Can you select only those who paid, and
suppress the deadbeats?
What is the income and socio-economic status of the list? A $50
purchase isn't as important as whether this $50 purchase was a necessity
item as compared to a discretionary or luxury item. There's a huge
difference between someone who bought 3 pairs of slacks for $50 versus
someone who spent $50 for a box of chocolates. If you're selling a product
that appeals to people in a specific socio-economic group, be sure the lists
you're renting contains names of people in this same group.
What impact does the presence of children make? If you're selling a
children's toy, it's easy enough to find toy buyers. However if you're
selling a juvenile life insurance product, presence of children is critical
and it might be harder to ascertain from simply reading a datacard.
What is the length of residence of the people on the list? The longer
the person lives at a location, the more conservative, and the less likely
to try something new. That's one of the reasons why 'new move' names work so
well for a wide array of products and services.
Are they homeowners or apartment dwellers? Surprisingly enough
apartment dwellers often outperform homeowners on many tests for a wide
variety of products and services. For example, renters often respond better
than homeowners to offers of low cost insurance.
What is the marital status? You might be surprised by the difference
in response, and it's often exactly the opposite of what you'd expect. But
if a list is not performing up to your expectations, this is certainly
something worth investigating. An example here is life insurance. Single
people often respond as well, or better, than married people, even though
married people often have a greater need.
What is the churn on the list? Churn is defined as a lot of activity,
in this case, a list being mailed many offers. If you're mailing to credit
based lists you want to see a lot of activity. The more activity on a file,
the better the response will be to most offers to that file.
Is there modeling capability? Although you may be able to model a
list you rent, the list owner really knows and understands each segment of
their list. Most mailers find that it is better to have the list owner do
the modeling on their list in order to identify profitable segments of the
list to mail to. The list owner usually has the best information regarding
selections that are available, and how to combine them.
Are they really buyers? Or are they inquiry names? Many datacards
list the two groups together - such as: "buyers and inquirers". Buyer names
always outperform inquiry names. Even though the datacard might not indicate
a selection, it's always a good idea to ask if you can select only the buyer
names. You might also want to ask what percentage of the names are buyers.
It's important to perform a reality check here - if the average order for
the product is $1000 and they have 500,000 names - and they say 50% of the
list is buyers - then you have to ask yourself if it's reasonable that
250,000 people spent $1000 with this company? That would translate to
$250,000,000 in sales. If a newsletter combines trials with subscribers -
and the newsletter sells for $100 - and they claim 250,000 names - is it
reasonable that the company sold 'millions' of dollars worth of
subscriptions in one year? Or is it more likely that the list is
overwhelmingly composed of trial subscriptions that did not convert.
Are the names deliverable? This is certainly a bigger problem when
renting international names than domestic names. But if the list you are
renting is stated as "1-36 month" there's a very good chance some 48 or
60-month-old names are still on that list. And with 20% of the country
moving each year - you are probably facing having 50% of these names
undeliverable. Unless you're mailing first class mail, you'll never know
Is the list saturated? The flip side of the comment regarding 'churn' is
over-use of a list. This is especially true in telemarketing. A great many
companies telemarket the names of people who purchased as a result of a
television spot or infomercial. It doesn't take very many calls before the
recipient gets turned off - and starts to hang up on telemarketers.
Selectivity is important. The more selections that are offered, the
more segments there are to test, or suppress. If a list has a significant
universe of names, it's wonderful if 'all' the names are profitable.
Alternatively, if you can profitably mail a segment that makes up 25% or 50%
of the universe offered, that is much better than not being able to use the
list at all.
Who is the list owner? Some list owners have a reputation for
offering lists that are not exactly as advertised. Some list owners will
market a list as containing 50,000 current year buyers. In reality they have
10,000 buyers a year. When you test the list you get current year buyers,
when you rollout you get 1, 2 and 3 year old names, and the continuation is
a disaster. Most reputable list brokers know who the less-than-reputable
list owners are. It's important to do another reality check here. Have you
seen mailings from the list owner? How did this list owner gather hundreds
of thousand of buyer names? This list owner claims to have 250,000 current
year buyers, with an average order of $75. If they're doing almost $20
million a year in sales how come they never tested my list, how come I've
never received their mailing or catalog?
Who is the list manager? Just as noted above with regard to list
owners, one of the most upsetting problems in the list industry is that some
list managers are not ethical. Most of the more experienced brokers and
mailers have identified, through painful trial-and-error, the questionable
list managers. One way to help avoid this problem is to deal with an
experienced list broker. And don't hesitate to ask: "who is the list
manager" - if it's not a company you're familiar with, ask about the list
broker's experience with that manager, and if you're not satisfied with the
answer either do some more checking, or forget about the list. You cannot
afford to 'test' a list and then, if the test works, rollout and get
murdered on a continuation. Often, irresponsible list managers will give you
current customers on a test, and ancient names on a rollout.
Exactly what was the source of the names? Was it direct mail? Was it
telemarketing, or space or television, or possibly the Internet? If
you're doing direct mail, then direct mail generated names will most
consistently be productive for you. Sometimes you can get television
generated names to work, but only if you mail them 'instantly'.
Traditionally, people who responded to telemarketing or Internet offers do
not work well for direct mail offers.
If you do not have an 800-number, try to suppress the names of people who
ordered using an 800-number (or get an 800-number). If you're not taking
orders on the Internet, try and suppress the names of people who ordered on
Recency is considered critical to most mailers. Many people are now
mailing weekly hotlines. I've already mentioned the difference between
seasonality and recency; but I cannot stress enough the importance of
recency. There are some people who believe that the nature of the name is
more important than recency - that a person who donates to animal causes
will always respond to animal cause fund-raising promotions. I do not think
that's true. For some reason an individual is moved to make a donation
'right now' to causes he or she believes in. And now, at this very moment,
is when you want to reach these prospects with a fund-raising offer.
Certainly it's critical to mail "alike" names. But a current, hotline name
will always outperform an older name.
How consistent are the names? Several companies have more than one
offer; yet they combine responses to all their offers into one list. For
years, one of the major catalog companies, with an average order of around
$40 combined these names with names generated from their semi-annual 'every
item 99-cent' newspaper insert program. The two types of buyers were
entirely different. If you tested catalog buyer names, and rolled out when
tens of thousands of 99-cent buyer names hit the file, you were going to get
destroyed. And, of course the reverse was also true ~ most low ticket
mailers would do sensationally well when they mailed the 99-cent names and
get murdered when they mailed the catalog buyer names.
One infomercial company combines their infomercial names with their periodic
catalog buyer names. It wouldn't be so bad if they mailed the catalog
consistently, because the mix would then be consistent, but they generate
television names every day, and only mail the catalog a few times a year.
How beat up is the list? Several years ago, when 900-number mailings
were the rage, one marketer sent 20 promotions out to each buyer before
releasing the names to the market. When you use hotline names, you are
competing with anywhere from 5 to 20 other companies mailing these same
'hotline' names. But you may also be following the list owner, who is
mailing massive quantities of their own house offers before the names are
released. It's a good idea to decoy the offers on lists you're considering
renting, in that way you'll know exactly how many offers are hitting the
list before the names are available to you. You'll also know how long the
lists are withheld from the marketplace before they are released.
Are special positions being offered? In many instance this is not
important. But, we know that there were two huge multi-magazine marketers
competing with one another. The company that mailed their multi-magazine
monster-sweepstakes offer 'first' had a significant advantage over the
competition. Find out which offers are competitive with yours. It's often
important to find out who is mailing the list before you, and to try and
negotiate a priority position, so you can mail before your competition.
Is the list owner holding back multi-buyers, or any other group of names?
Unless you have a very sophisticated decoy system it's hard to identify when
a list owner is holding back multi-buyer, or any other group of names. You
should certainly decoy every list that you're renting to find out how
quickly your decoy names appear on the list you're renting. If you place 2nd
or 3rd orders, does your decoy name reappear as quickly as it did the first
time you ordered?
Are the multi-buyers really multi-buyers? A true multi-buyer is a
person who has ordered, and then come back and ordered again. The customer
has made more than one buying decision. Some data cards list as multi-buyers
customers who have purchased more than one item in one transaction. This is
more appropriately a dollar selection.
Does your list broker manage the list? This is a double-edged sword.
If your list broker is also the list manager of a particular list they are
recommending, the benefit is that they're very familiar with the list, the
accuracy of the list, the selections, etc. Conversely, many times list
broker will 'push' a list that they are managing, and that can be a very
powerful negative to the mailer. List owners are always pushing their
managers for 'new tests', and one way the manager can push the list is by
having their brokerage clients test the files, even though they would not
recommend this same list were it managed by another management company.
What psychological hot buttons did the consumer originally respond to?
Good examples of these are the greeting card or name-and-address label donor
files. There are many people who will make a donation to a particular
charity because they received a mailing with a dozen free greeting cards, or
a package of address labels. They feel guilty and make a donation. They have
no commitment to the particular charity. If your charity has a similar
cause, the greeting card donor will probably not be a good prospect for your
mailing. The same thing, of course, happened in the sweepstakes area. People
who responded to sweepstakes mailings would often be unresponsive to
non-sweeps mailings. So the product was irrelevant, the psychological hot
button, the gift or the sweepstakes, is what made the person respond. Unless
you're appealing to the consumer with a similar psychological hot button,
this list will probably fail for you.
Are there a lot of tests, but few continuations? Ask the list broker
to provide you with a list of companies who tested the list, and who
continued on the list. Be wary of those lists that have a plethora of tests,
but few continuations.
Mail the best segment first. If your offer doesn't work to your most
promising lists and list segments, it probably won't work to the less
Use Competitive Lists. The odds that any new list you test will work
are against you. However, if you're using a category of list that is
working, be sure to test every other list in the category. If you're
profitably mailing a new parent list, test every other new parent list. If
you're profitably mailing a new move (change-of-address) list, be sure to
test other new move lists. Every compiled list is different. You stand a
much higher chance of getting a 2nd or 3rd new-mover list to work if you
have one that already works, than you do of getting a brand new category of
names to work for you. If you experience significant duplication between
lists, discuss this with your broker, because that problem can usually be
solved with a better net name arrangement.
In any direct response business, the object is to get as many lists to
'work' as possible, and to get the largest universe to work as possible.
Were you to follow all of these guidelines all of the time, you would
probably end up testing very few lists, and then only testing minute
selections. That's not going to help you build your direct response
If you're just starting out, you cannot afford dozens of tests that fail
because of poor list selection. But, in my opinion, there are several
benefits to studying this checklist and incorporating it into your list
selection process. It will certainly help you evaluate lists that you're
If a list was tested and it was marginally unprofitable, this data may be
very helpful. Let's assume you're working with a reputable list broker, one
who has extensive experience in your marketing category. A particular list
makes sense and you test it. Unfortunately the test is marginally
unprofitable. Instead of simply discarding the list, you can use this test
to help you consider segments of the list that might prove profitable.
These criteria should also help you avoid predictable disasters. Nowadays it
costs $3,000, or more, to test a list. And that assumes you're just testing
5,000 names. No one can afford to throw away $3,000 several times every
month. Or worse, test a list, have it prove profitable, and then get
destroyed on a continuation.
Certainly no "list about lists" can be complete. I assume everyone who reads
this article will come up with 1, 2 or more critical items that they use
when predicting whether and why a particular list will, or will not, be
These criteria have guided me in renting tens of millions of names for the
mailings I've sent out. And hopefully they have guided the many mailers who
have profitably mailed the hundreds of millions of names I've been
privileged to rent to them.
David Bancroft Avrick has over 57 years of direct response experience.
During that time he has billed over a billion dollars in list rental fees
and generated over 100 million responses from direct marketing campaigns.
The current focus of Avrick Direct is the compilation of a portfolio of
unique data. These include pre-movers, new movers, new homeowners, new
credit card issues and new online respondents.