B-to-B Ideas of Merit: Combating Prospect Universe Erosion

“B-to-B Ideas of Merit,” from White Plains, NY-based list services firm MeritDirect, is a new series on business-to-business growth strategies that will appear exclusively in List and Data Strategies for the Multichannel Merchant. Ed A. Larkin is director of business development for MeritDirect.

The b-to-b catalog industry is coming off three consecutive years of flat to negative prospecting circulation for a majority of mailers. As a result, many rental list have 10%-20% fewer names than they’d had a few years ago. Some are down even more.

If you have seen many of your core continuation list universes shrink by 20%, you have a difficult challenge on your hands: How do you continue or increase circulation levels without sacrificing profitability? The relative scarcity of new lists coming onto the market makes your task seem even more daunting.

The good news is that a combination of new name sources, database-aided selects from existing sources, and revisiting how you use the old standbys can help you grow a bountiful crop of productive prospects.

Most consumer catalogers have already learned that participation in the multiple-membership cooperatives yields hundreds of thousands of productive new prospects; business catalogers are learning the same truth with the b-to-b co-ops. These databases require you to put your buyer names and transaction data into their bases. They offer prospects net of house file, sophisticated Boolean selects, and modeling. Many b-to-b marketers have tested co-op databases, and a number have continued using them, finding productive modeled outputs typically in the range of 100,000-250,000 names per quarter.

Another type of cooperative database, the prospecting database, does not require you to submit your house file names. Doing so is recommended, however, for house file suppression purposes. It allows you to optimize list selections with far greater precision than a traditional order fulfilled directly from the list manager.

For example, if the most recent quarter of Joe’s Widgets is a core continuation list for you, but older quarterly names drop off in performance, the co-op database environment allows you to add additional filters to the older names that can make them perform as well as the hotlines. You could take older quarterly names from Joe’s Widgets, omit companies with fewer than 10 and more than 200 employees, select only your most responsive SICs, and select only those names in the two previous filters that are also multi-occurrence names in the database. Any one or a combination of all three tactics is sure to enhance the responsiveness of the older Joe’s Widgets names. Multiply this process by the 20 or 50 or 100 core hotline lists you mail, and you can see how database-aided selects from existing list sources will bolster a sagging prospecting universe. Similarly, select 50 previously submarginal lists but target only names in the top deciles of a customized response model, and you have an entire new source of prospect names.

Many mailers assume that the leading business universe lists–D&B, InfoUSA, Experian’s National Business Database–have virtually identical coverage. Not so. In fact, if you were to match any two of these against one another, you would find 20%-30% unique names. So how do you take advantage of this? Let’s assume you have an offer for plumbers. If you are mailing from a co-op prospecting database you can order all 36,000 plumbers from one of the business universe files and then order the incremental names from the other compiler. This would typically add another 4,000-6,000 plumber prospects. Revisiting how you use compiled lists, and how many you use, can produce incremental prospect universes in your core markets. And like noncompiled lists, these files can be significantly enhanced by the use of database selects and models to reopen previously unproductive segments.

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