Pros and Cons of Renting Names Through Databases

May 28, 2008 1:57 AM  By

There are numerous public and private multi-sourced databases on the market. Databases customarily represent hundreds of individual participants, including names from list compilers. Private databases keep the names of individual list owners confidential, whereas public databases tout name brand lists from selected participants.

Before lists are included in a database, they are given a light scrubbing by database managers, and then merged and purged to minimize duplicate names. As a mailer, you may choose names in a public database from individual lists, or simply order names meeting specific geographic criteria from diverse list owners, subject to list owner approval of your creative and proposed mail date. The so-called clearance process applies to databases of all stripes. Database managers also may offer profiling services, using compiled names for demographics, to lift response rates on older segments, including non-endemic files.

If your company requires squeaky clean hotline or SKU data, database names may not be your best pick. For example, individual database participants may not provide their best names to outsiders, or may offer limited quarterly, monthly, or annual updates, as is the case with some vertical-market compiled business files. List owners may also remove their standard selection criteria from database builds.

Names from databases are notorious for being churned over and over again by aggressive managers who focus on generating volume for their participants. As experienced direct marketers know, database names tend to be less responsive than discrete individual files, even with the benefit of pre-selects or list optimization.

Don’t be mislead into believing that every single viable list can be found in a database. Most list owners do not participate in databases. They are understandably fearful of losing control of their customer names to competitors, or allowing them to churn or cherry-pick their names.

Also, ordering names from databases may not be more cost-effective, given the fact that a growing number of motivated independent list owners and managers are willing to reduce their base rental fees, waive selects, or offer special concessions. Public databases use standard data card pricing, and do not tout volume discounts, or the unique selectivity of their participant’s files.

While it’s true that databases offer de-duped names, public databases may impose separate per thousand name run charges on all orders. If you rent outside lists along with database names, it is possible for an independent list broker to negotiate special net name agreements from database managers for a stand alone merge-purge.

For mailers on a quest to find the proverbial “raisin in the rice pudding,” there is no substitute for names from a well-sourced public or private database. They will always yield the greatest number of prospects. For example, if you have a highly localized seminar offer, databases can be a great fit with tight demographic and geographic criteria.

For catalogers and other mailers, it still makes sense to keep your options open and rent optimized names from databases, along with carefully screened individual lists. Before you make a decision to work with one or more databases, you should use the services of an experienced independent list broker to help you compare vetted databases and individual lists from diverse sources. Do this before renting or exchanging any names.

Beware of database managers who focus on volume and not offering you their best quality names. There is a place in the marketing mix for well-sourced databases, but it is not prudent to put all of your eggs into one basket. One should be particularly suspicious of database managers who do not offer commissions to independent list brokers, thus discouraging independent list selection and advice.

For those considering ceding control of their names to one or more database companies, be careful, because relying on database participation may translate into less total list management revenue and lower margins.

Database managers often frown on list exchanges. If you committed to maximizing the value of your names for rental or exchange, consider having an independent list manager. That strategy will afford you the opportunity to achieve higher margins, and keep your doors open to prospective suitors, while avoiding or limiting your exposure to databases. If your list is good and competitively priced, experienced mailers will still include your names in their circulation plans.

Vetted databases provide a valuable service to those who cannot find statistically valid quantities of sample test names from individual list owners. They can also generate incremental revenue for their participants, in addition to being a cost-effective resource for those who need to extend their reach beyond traditional lists or non-endemic mailers.

David Kanter is president and CEO of Ventura, CA based www.acculist.com.