Understanding the Real Value of a Prospecting List

Oct 16, 2006 9:14 PM  By

Prospecting results are traditionally reviewed based on the total performance of sales per book for each list, and subsequent mailing decisions are based on these results. In actuality, you should conduct further analysis to determine the true strength of each particular list and whether it makes sense to rent that list going forward.

By breaking out the multis and unique names for each list in the merge, you can then code and mail them separately. After performing a matchback to calculate book performance, you can perform additional analysis on the individual outside lists to determine 1) what portion of each list was multis vs. unique names, and 2) what is the performance or value of the unique names. This is what will determine the true value of each prospecting list.

The value of a prospecting list results from incremental, unique names coming out of the merge that perform at an acceptable level. If the overall list results are being driven only by the multi names and very few unique names are being generated, you do not need to rent that list going forward. You may have two lists that on the surface are equally profitable, but with further analysis you might determine that it is the high responsiveness of the multis that is driving the overall results of one of those lists.

Let’s say you have two lists with the same overall results of $0.85 per book. List A consists of 40% unique names, which are performing at $0.81 per book; list B is made up of only 30% unique names, which are performing at $0.46 per book. While both lists perform at the same level as a whole, List A is clearly stronger because it is brining more unique names to the mailing that are performing at a higher level than the unique names from List B.

By better understanding the real value of each list, you are better equipped to make tough list decisions going forward, especially in weaker seasons when you aren’t able to rent as many names and create as many multis.

Michelle Farabaugh is a partner with San Rafael, CA-based Lenser, a catalog consultancy.