How To Market A Product for Under $500
DanielleAdams.com - JeffreyDobkin.com 250 pages of lean marketing information. Written in a conversational style yet the technical marketing information runs quite deep.
How To Market A Product for Under $500
How To Buy a Great Mailing List!
By Jeffrey Dobkin
What’s the worst mistake you can make in direct mail? Poor mailing list selection is the worst mistake you can make in direct mail. Yep.
When you mail to the wrong mailing list, you get experience - which is what you get when you don’t make any money. No response. No calls. No orders.
Bad list is the same as offering Chevy hubcaps to a mailing list of Buick owners. Offering radios to a mailing list of the deaf.
A simple mistake in the selection of a mailing list moves all the hard work and $$$ you put into your mailing creative and offer from the “we made money” side of your spreadsheet to the “we got experience” side.
Here’s how to find and buy the correct mailing list.
The first consideration in any - and every - marketing campaign is to define your target audience, precisely.
Who exactly is your market? In direct mail, the better you can accurately identify your perfect prospect, the more tightly you can specify your mailing list to perfectly match that prospect, the better your response. That’s a promise.
Here’s where to start:
Get all the direct marking magazines (for free) that are still in print. Search the internet. Or go to the library, where the publication’s names are found in the reference section in the media directories like Bacon’s directory of magazines, Burrelle’s Periodical Directory, and Standard Rate and Data Directory of Periodicals.
Then call the direct marketing magazine publishers and request a “media kit”. This is the promotional kit magazine publishers use to sell their advertising space to people in their industry.
When I originally wrote this article years ago a few marketing magazine were Catalog Age & Direct Marketing, Response, Target Marketing, and DM News. Times change, and the Internet changed things faster and although I still see a few of these in my mailbox every month, I doubt other publications are still around. But new direct marketing magazines come in to take their place.
When you request a media kit, they’ll send it out, first class. Make sure they include several recent copies. Don’t fall for the “look us up online.” Tell them you need to see actual copies of magazines to evaluate it for your potential advertising consideration.
Call all the list management companies (a.k.a. mailing list brokers) that run full and half page ads for their mailing lists in these magazines. Ask if they have a mailing list catalog, many do.
You can reach mailing list firms online as well, but it’s much harder and time consuming to do this mailing list research online.
Now that you know your “Perfect” target prospects from the first part of this article, you can inquire about buying mailing lists that will reach them without too much wasted expense.
Buying the mailing lists
Housekeeping note: you actually “rent” mailing lists for a single use, but I’ll refer to “buying” the list because you buy the use of the list, and the term is commonly misused in direct marketing circles.
Kindly remember, even though you are the purchaser, the list brokers work for the LIST OWNER. So make sure you get tough with them about answering your questions. They are the sales agents, and some can be overzealous - overstating the qualifications of the mailing lists you are thinking about renting…
Questions to ask?
Precisely who is the list audience made up of?
There are two types of mailing lists: Response lists, and compiled lists.
Response mailing lists, as you would suspect, are records of people who responded to a direct mailing or direct marketing offer: catalog, mailing, TV and so on.
Questions to ask:
If it’s a response mailing list
· does the list include actual purchasers or also inquirers (who are of less value)?
· If it’s both buyers and inquirers, can purchasers be broken out and mailed to?
· How old are the records on the list?
· How often is the mailing list updated?
· How often - and how recently - has it been cleaned?
(Cleaning a list means the list owner passed it through the postal service NCOA (National Change Of Address) file and most of the old, outdated nondeliverables (nixies) have been removed. If a list is clean, you won’t get a lot of your mail pieces back.)
· Ask brokers for a data card, which shows list specifications.
·Believe only 1/3 of what the data card says - some are pure BS.
Major Factors in Considering any mailing list acquisition:
The formula of renting response lists (for direct solicitations) is based on 1. recency, 2. frequency, and 3. monetary. These are still the standard criteria for measuring the quality of most mail order purchaser lists.
Recency: When buying - more accurately renting - a list of names of purchasers to make your offer to, ask how recently the people on the list have made a purchase.
Recency is a key factor in mailing lists, the most recent being the better buy. Most list owners offer “Hot Name” selects - buyers who have made their purchase within the past month or two or three.
Frequency: Ask if you can get a mailing list select of multi-buyers - who have made several direct mail purchases. Ask how often they have purchased: frequency is another key factor in better mailing lists, and my personal favorite preference when you are selling products or mailing a catalog.
Monetary: Finally ask how much money has been spent on each purchase. You are looking for a list where people will spend a similar amount for your products. Usually higher spend numbers are better.
Ask how often the list has been rented. You don’t want to rent a list that is almost never rented, because there’s probably a reason no one is using it - no one is getting the desired response from that particular list.
You don’t want to get a list that has been rented toooo often and may suffer from list fatigue. You don’t want to be the 50th person that month that sent them a direct mail offer.
Ask how many other mailers have tested the file.
Tests in direct mail are usually 5,000 names, and only a few list owners will rent you less mailing list names. This doesn’t mean you have to mail to all 5,000 names, but you may have to purchase them.
I always ask for a 2M name test - I’ve found it’s usually enough for my clients to get a fair indication if the mailing list will pull a decent response. I also always ask for a free 2,000 name test from the list owner, and sometimes I get it. Some list owners know their list works well, and know I’ll be back with larger orders for their mailing lists.
Ask how many people “continued” after their test - meaning their test mailing drew enough of a response to warrant being mailed to again. And they mailed to that list again.
Ask how many mailers ordered names for a second continuation, meaning they absolutely did make money and it was worth the effort.
Then ask how many people “rolled out” - mailed to the rest of the entire mailing list. When a mailer rolls out to a mailing list file you can bet it worked well.
Compiled Mailing Lists
A common source of mailing list names is from records that have been compiled in some fashion.
Compilers may acquire their names through public records such as drivers licenses, vehicle registrations or state records. For example high school teachers, people who are a certain age, or who drive an expensive car.
Many lists are compiled from the listings in phone books. A compiler may acquire a mailing list of all the insurance agencies across the U.S., all the luggage dealers in selected states, or all the plumbing supply dealers in Pennsylvania.
Always ask the origin of the list.
You can specify an “overlay” for the mailing list names.
An “Overlay” is additional selection criteria added to the mailing list.
A “demographic overlay” of “restaurant owners” may be the restaurants are all located in a few selected counties or states.
A business-specific overlay may section out the name of the “chief marketing officers” of “businesses with over 500 employees,” or with “sales volumes greater than 2 million, or under 2 million.” Request as many overlays and selects as you need, keep in mind each overlay will limit your mailing universe, and increase your list cost slightly. But better targeting definitely pays off in increased response with less wasted mailing pieces.
For example: your mailing list of small business owners (40 million records = mailing universe), with a demographic overlay of businesses in the Philadelphia area (200,000 records) doing more than $2,000,000 in sales (50,000 records) who are owned by women (15,000 records) who are non-white (5,000 records) with under 20 employees (2,000 records) that have started up within the past 5 years is now a mailing list of just 500 names and addresses. If that’s your target, this list is a home run.
Compiled list information - like fish - gets old rather quickly and doesn’t age particularly well.
Even though a few mailing list rental firms reimburse you for postage on returns, that won’t be much help when you are staring at a couple of mail sacks full of crushed, mutilated returned mailing pieces.
Some compiled lists are excellent, but some are horrible - and compiled lists are usually my least favorite way to purchase records, but sometimes a necessary evil. You’ve got to dig deep - ask lots of questions - to find the best lists.
Example: Guaranteed delivery of some mailing lists of 93% may sound good up front, but it is actually pretty mediocre.
In reality, with a guarantee of 93% delivery a minimum of 10% of your mail is going awry and most of these will come back to you and you’ll pay for all the returns. Additionally more likely and additional 10% will be lost or at least no one knows where those mail pieces went, they just never came back to you. So now your 93% delivery is at about 80%.
Guaranteed deliverability of 95% is still just fair. 98% is good, 99% better. These lists are out there.
Mailing list resources —
Magazines are usually a Great Resource for mailing lists.
Magazine publishers are usually a great source of fully deliverable mailing lists. Magazines can be very industry specific, and the mailing list file is usually very up to date. When a subscriber moves and the publisher gets the magazine back, it costs the publisher money - so most publishers have a process for handling this and are extremely prompt with their name and address corrections.
Call a magazine publisher and ask if their subscriber list is for rent, most subscriber lists are. They may handle this in-house, or give you the name of their list broker. It’s good revenue for them from the rental of their mailing list.
Trade associations are also an excellent source of mailing lists.
Better national or state associations always contain the industry’s major players. The Gayle Directory of Associations shows 28,000 associations, who they are and how to get in touch with them. Every large library has this 3-set directory.
Local associations like the Chamber of Commerce are a good mailing list resource: their members are local business owners.
You can also select businesses by size, number of employees, SIC code (the government’s industry classification of each business), or any of a multitude of other selection parameters and specify who in the firm you want to mail to: the name can be President or owner, sales manager, VP, HR director, plant maintenance or whatever.
Catalogs of Mailing Lists
Some of the larger list brokers publish a free catalog showing the thousands of lists available through them - so give them a call. I’ve listed their phone numbers, but they’ve probably changed over the years. Hugo Dunhill: 800/729-2600, American Business Lists: 800/555-5335, PCS Mailing Lists: 800/532-LIST, Best Mailing Lists: 800/692-2378, CompilersPlus: 800/431-2914 to name just a few. Also, Melissa Data and Accurate are two mailing list firms I’ve personally used.
Two excellent resources for researching lists at the library are the SRDS Direct Marketing List Source™ and the Oxbridge Communications National Directory of Mailing Lists. We use the both in our own office - they’re thorough and exceptionally easy to use. Each book contains facts and figures like rental costs and number of records, source, and the contact names and phone numbers of the mailing list owner or broker. Over 50,000 lists are available to rent. These directories can be found in your local library.
List brokers are found in the phone book in every major city. They can be heaven, supplying incredible information, or hell, looking for that fast buck with cheap sales tactics. Make sure you ask tons of questions before handing over any money. Remember, they work for the list owner, not you.
You can hire a list broker to find a list for you, they charge the list owner a 20% commission of the cost of the list - you don’t pay any more to purchase a list through a broker. If the list owner sells through an agent or agency, the agency generally gets an additional 10% of the sale price.
Lists are sold - actually rented, remember - for a single use unless you pay a premium for multiple use. Typically mailing lists cost between $65 and $85 per thousand records. Specialty mailing lists can cost quite a bit more. Upwards of $250/M. Some very select mailing lists can cost in the thousands.
Mailing lists are available on disk, tape, printed out on paper (for Cheshire label machines used by mailhouses), or pressure-sensitive labels. Nowadays they can be downloaded quite easily.
Residential lists are low in cost ($20 per thousand) and may or may not come with a name in the name field. If there is no name, I always have the computer house imprint “To our Friends at” or “To our Neighbors at” on the top line.
When purchasing and testing several lists, don’t forget to key code the response vehicle so you can accurately track response back to the source list. That way if you are mailing to several lists you’ll know which one is working for you.
Several companies now offer lists of every business or every person in the U.S. on CD or on their internet websites.
These products allow you to create your own list criteria and generate your own mailing lists on your file management system on your own computer. Many of these lists let you mail as much as you like. Very handy.
Some of the better programs make it easy and fast to use their products, and these can be great for testing different markets.
Whatever you do, don’t settle for a mediocre list, unless you want mediocre results.
Spend some extra time in this most important area to tighten your criteria, and search out the best lists you can. Then test several. It’s worth the extra time and money to target your audience with precision and come up a winner at the post office.
On Jeffrey Dobkin’s Website:
Many More Articles on Mailing Lists
One Hour Audio on Mailing Lists
Articles on Marketing and Direct Mail
Creative Samples of Dobkin’s work in Direct Mail.
Word Count: 1600
Jeffrey Dobkin, author of the incredible 400-page marketing manual, How To Market A Product for Under $500 ($39.95), now has a second book, Uncommon Marketing Techniques ($17.95) - 33 of his latest columns on small business marketing, exactly like the one you just read, but better. Both books are available online directly from the publisher - JeffreyDobkin.com, and on Amazon.
These books are completely filled with tips and techniques to make your marketing faster, cheaper, more effective - and fun. You never learned this stuff in college! Dobkin cuts right through the theoretical crap and demonstrates a wealth of practical how-to direct marketing techniques. He is also a speaker, and a direct mail copywriter who will change your letters and direct mail packages into something that sizzles with response. He’s also a marketing consultant, the first call is always free. To speak with Mr. Dobkin personally call 610/642-1000. The Danielle Adams Publishing Company can be reached by mailing to Jeff Dobkin, P.O. Box 100, Merion Station, PA 19066.
Invention: 50 Brief Questions for Inventors
I’ve never seen a person without an invention rolling around in his mind. So…
What state is your invention in? Scribbled on a napkin? A written and sketched idea? Professional drawings, 3-D rendering, handmade proof of concept prototype, manufacturing prototype, samples made, product finished? Here are the next 98 questions:
The Top 10 Questions (Taken from my article The Top Ten Questions for Inventors)
1. Do you have a budget?
2. What are your goals?
3. Have you done a patent search?
4. Are you going to patent it, or not?
5. Is your product “Commercially Feasible”? - (can you make it and sell it at a profit)
6. What industries will your product sell to?
7. Will it sell itself from a shelf in a store?
8. Can you make a few prototypes?
9. Is it in your own field of expertise?
10. What are your next 10 steps?
And now a word from our sponsor: Buy the amazing inventor’s, small business and entrepreneur’s marketer’s Bible: How To Market A Product for Under $500. If you’re an inventor who’d like to market his or her invention - you’d be crazy not to read this book. Thanks. And now, back to the article:
11. How much will it cost at retail?
12. How much will it cost to make?
13. How much will you make per sale?
14 Has it been field tested?
15. Have you researched to find this or similar products on the web?
16. How many other firms make a similar product?
17. Why will yours be better, cheaper, faster?
18. Who are the people most likely to buy one?
19. What mail order catalogs will carry your item?
79. How many mail order catalogs will carry it?
Which catalogs will carry it?
What stores will sell your product?
20. What is your product name?
21. What are some other names for your invention in case that one is taken?
22. Is your “product name” website taken?
23. What is your website name?
24. What products compete with yours?
and what are their prices?
25. What stage is your invention in (idea, sketch, proof of concept prototype, working prototype, mechanical prototype, manufacturing prototype, finished product?)
What problem does your invention solve?
How common is this problem?
How can you reach people with this problem without wasting money reaching others?
How can you reach people who will want to purchase your product without wasting money reaching others who won’t.
Are you applying for a patent?
Are any patents similar in nature?
26. Are your patent claims broad or narrow?
71. How strong is your patent?
How many patent claims do you have?
27. What materials are used in manufacturing your product?
28. Will you need $$$ tooling to manufacture it?
What will the tooling cost?
What is the manufacturing cycle time to build one?
What is the length of your first run?
29. How many parts and pieces does it have? (affects costs and scheduling)
Are their ‘off the shelf’ parts you can use to make one?
30. How much does it weigh? (affects shipping costs)
31. Who will be creating the final design?
32. Is it easily breakable?
What is the product life cycle before it breaks?
What is the product life cycle before it wears out?
42. Does it ever wear out?
58. How long will one last (days, months, years?)
46. Do you offer a guarantee?
What is the buying cycle (how long till you need a new one)?
When will they need a replacement?
How many will people need?
34. Are you going to manufacture it yourself?
Are you going to market it yourself?
33. What are your projected sales for the first year? 2nd year?
35. Are you going to license it?
Who is the most likely candidate to license this from you?
36. What makes yours better than other ones?
37. Is there a ‘highly perceived difference’ between yours and others?
41. What are the demographics of people who will buy it? Younger, older, urban, rural, northern (cold), southern, rich, poor, specific geographic areas such as costal cities, house owners or renters…
38. Have you sold any yet?
39. Has anyone offered to buy one?
40. How did you come up with your retail price?
43. How many will people need one (or can use one)?
44. If you contact 1,000 people, how many will people buy?
45. Does it have replaceable parts?
Does it consume any parts or have recurring expense (recurring revenue for you?)
47. How many colors does it come in?
48. Is there an upgrade for it?
Are there additional pieces you can buy with it to make it better?
49. How many models will you offer?
50. How will you package it?
This has been taken from the article 200 brief questions for inventors by Jeffrey Dobkin. Dobkin is the President of the American Society of Inventors - a Philadelphia area non-profit organization that helps inventors free of charge.
Merion Station, PA
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