The most important element in your direct marketing campaign is the mailing list. Identifying and reaching the right customers for your enterprise is critical to your business's ongoing success. But where do you get the contacts you need to compile a mailing list?
You can use internal sources to compile a mailing list of both customers and prospective customers. You can also rent or purchase existing lists from sources such as list brokers, Web sites, publishers, or organizations that offer customer lists. You might also want to commission a list that exactly matches your requirements.
Identifying sources of information
You can find contact information in several sources — it's just a matter of knowing where to look. Sources fall into two areas: internal sources that already exist within your own business, and external sources that are publicly accessible.
Determine internal sources of information
The first source of information is the internal documents that your business creates. You might be surprised at how many ways your company retains customer information, including:
- Customer records
- Customer correspondence, including customer complaints
- Warranty records
- Service records
- Sales prospect files
- Sales force reports
- Records of former customers
- Market research surveys
- Business information library
Determine external sources of information
Beyond the information you can glean from your internal sources, you can find a wealth of contact data from sources outside your company. External sources include the following:
- Customers' and prospective customers' Web sites
- Databases and information services available on the Internet
- General or industry-specific trade directories
- Membership directories for associations and groups
- Local telephone or chamber of commerce directories
- Specialized magazines and yearbooks
- Business reports and industry surveys in newspapers
- Published surveys
- Summaries or reports on consumer surveys
- Government and industry statistics, including census, industry reports, and trade association statistics
Creating an effective list
In its simplest form, your business mailing list needs to include names, job titles, addresses, and telephone numbers. But is this information enough? To make your list more effective and to make sure you are reaching the right customers and prospective customers, you can refine your list by adding information about buying patterns, lifestyles, and any other factors that might provide a more comprehensive picture of the people you want to reach.
Segment your list
Direct marketing works most effectively when it is aimed at a specific audience. Different groups within your target market might have different purchasing needs or different spending levels. The more you segment your mailing lists, the more precisely you can communicate to those specific target groups. By segmenting your lists and by customizing your marketing material, you can address individual needs.
Segment internal lists Customer records can quickly provide you with names and addresses of individuals, but to get more specific information, you need to carry out further analysis. Dividing your list into simple segments might give you such categories as:
- Customers who have made a purchase in the last six months
- Former customers
- Customers who spend over a specified amount per annum
Segment external lists A basic business list contains names and addresses, telephone numbers, and job titles, but this type of list is useful only for carrying out direct marketing in the most general sense. The strength of direct marketing is that it can provide a high degree of precision — so your lists must be structured carefully. Here are some commonly used approaches to segmenting business-to-consumer and business-to-business lists that you build by using external sources.
- Marital status
- Income level
- Occupation category
- Home ownership and home value
- Vehicle ownership and vehicle value
- Personal interests
- Credit card holder
- Shopping patterns
- Vacation preferences
- Insurance status
- Leisure interests
- Brand preferences
- Recent purchase history
- Reading or viewing habits
- Type of business
- Size of business
- Number of employees
- Annual expenditure
- Average order size
- Purchasing frequency
- Head office or local purchasing location
- Purchasing history
- Key contacts
- Job titles of key contacts
- Budget authority
Comply with legislation and regulations on personal data
The basic premise behind legislation and regulations on the use of personal data is, if you have data, use it properly. The laws and regulations place obligations on data users, who must be open about how they use the data and who must follow sound information-handling practices. The regulations also state that data users must provide every individual with access to information held about them.
Check the accuracy of lists
After you have created your contact lists, you need to refine them continuously to improve your coverage or to make your lists more precise. To reduce waste in your mailing campaigns, it is important to check lists regularly for accuracy. Three of the biggest problems in list management are:
- Duplication, in which the same individual appears on a list several times, possibly in different guises (for example, you might have Bonnie Skelly, B. L. Skelly, and Ms. Skelly on your list, all with the same address). Duplication is not only wasteful, it also irritates the recipient.
- Incomplete addresses.
- Out-of-date information, because the original recipient has moved or changed jobs.
Keep refining your lists
Many standard lists and lists you have compiled yourself might not match your requirements exactly. To improve coverage or to make your mailing lists more precise, you need to refine them continuously. Take steps to refine your list by:
- Ensuring that new customer and prospective customer data is added to the list as you acquire the information.
- Including coupons and other reply mechanisms with every form of communication and adding the responses to your lists.
- Encouraging the sales force to provide up-to-date customer and prospective customer information.
- Maintaining a search program on the Internet and in publications to identify new prospects for your list.
Making use of existing lists
If you do not have the resources to compile your own lists, or if you are moving into new markets, you might be able to make use of existing lists. Here are some suggested places to look for existing lists:
- List brokers who offer different categories of lists
- Web sites
- Magazine publishers
- Directory publishers
- Trade associations or professional institutions
- Commercial organizations
If you plan to use a ready-made list, you need to check the following:
- How closely does the list match your customer profile?
- How much waste will there be? That is, how much of the list falls outside your customer profile?
- Are there any restrictions on the use of the list? The owner might want to protect customers against direct mail overload or to maintain an air of exclusivity.
Commissioning a list
Standard lists might not give you the degree of match you need, and you might want to commission a specially tailored list. The success of such a list is directly related to the quality of the brief you give your supplier, so you need to provide the supplier with a highly detailed description of your target audience.
Tips for best results
Which methods you use to obtain customer information and whether to offer your own internally compiled customer information depend on the kind of information you have and how you plan to use it. The following are a few considerations you need to address:
- Overlooking internal sources Don't make the mistake of buying or renting an external list without first considering your internal sources. Mailing to your present or past customers can reinforce the benefits of existing communications programs and deliver a high level of response.
- Using out-of-date lists A mailing list is out of date almost as soon as it is compiled. People change jobs, move, or change interests. Maintaining your lists must be a continuous process. You can use returned mail as a starting point, check your lists against updated sources, or use telephone research to check a customer's or prospective customer's current status.
- Marketing your customer list to other organizations You can market your list to other organizations; however, you must be aware of the implications of applicable legislation and regulations. Your customers might have a right to know how their data is being used. In the forms you use to collect customer data, always include a clause asking your customers whether they are willing to allow their data to be passed to other organizations. If they are not, you need to remove their names from any lists you offer to other organizations.
- Buying vs. renting an external mailing list Whether you buy or rent a contact list depends on how frequently you plan to do mailings. Rented lists are for a single use only, charged on a cost-per-thousand basis, and the owners have security techniques to counter unauthorized repeat use. A single campaign might be enough, but experience indicates that multiple mailings generally achieve better results. You need to compare the cost of buying a contact list with the cost of renting the list for multiple mailings.
- Using internally compiled lists versus lists obtained from a direct mail list specialist Your internally compiled list is only as good as your sources. If your target market is your existing customers and good prospective customers, your sources might be adequate. An external list supplier might not have the same detailed understanding of that market. However, if you are moving into new markets where you have no existing contacts, it might be more effective to draw on the resources of a company with experience in those markets.
Building your direct marketing mailing list carefully from the start can ensure that you have a successful direct mailing campaign. You end up with better results from the mailing, and you don't waste mailing campaign funds. If you keep in mind common problems such as legal issues and outdated information as you build your lists, you will find a direct mailing campaign to be a successful way of advertising your business.