Determining the value of an online buyer

Oct 01, 1998 9:30 PM  By

It’s fundamental: A list’s source-essentially, how the names were obtained-affects that list’s performance. For catalogers, “direct mail-generated names almost always outperform print, and print almost always outperforms package inserts,” contends David Schwartz, president of Farmingdale, NY-based list firm 21st Century Marketing. But the value to print catalogers of the names and addresses of customers who bought via the Internet is still to be determined.

For one thing, there aren’t yet enough Web-buyer lists on the market to perform an analysis. A search on DirectNet-a Web-based list directory service of directory publisher SRDS-uncovered just 25 lists of Internet-buyer names, and most of these had counts only in the low thousands. (Of the 25 lists, only four were traditional catalogers; the remainder were computer-related companies.) “I don’t think Web buyers would be of interest to us unless we and the competition had enough names to work with,” says Mark Gallo, vice president of marketing for apparel cataloger The Territory Ahead.

But while industry sources claim there are more Internet-buyer lists available today than this time last year, demand is reportedly still very low. The ‘Net-buyer list of Chicago-based gifts and gadgets cataloger Hammacher Schlemmer, which has been on the market for two years, has generated little interest thus far, admits circulation manager Dan Fagan. The file consists of 8,000 12-month actives from Hammacher Schlemmer’s Website (launched in February) and its site on America Online.

High-tech interest High-tech gifts cataloger The Sharper Image has been offering Internet names as a select for nearly a year. The file has drawn mostly high-tech companies rather than traditional catalogers, says Sandy Sheppard, director of marketing for the San Francisco-based company. The Sharper Image’s 20,000-name select sells for the premium price of $30/M (compared to $5/M-$20/M for more common selects such as hotline names and demographic characteristics). It represents 5% of the company’s 12-month active catalog customer file, according to Sheppard.

While Schwartz, for one, predicts that more noncomputer print catalogers will begin renting lists of Web buyers, not everyone currently sees such lists as marketing must-haves. “I personally don’t recommend them,” says Lesli Rodgers, president of list firm LR Direct in Monroe, CT. “There are still a lot of traditional lists I’d go to first. I’d rather mail fewer names than try new sources.”

Gallo agrees, noting that he prefers to market through the same medium that the customers came in through, such as sending e-mail to Web buyers and mailing print catalogs to proven mail-order buyers.