Finding the newest new names

Apr 01, 1999 10:30 PM  By

An ideal time for business-to-business catalogers to find customers is when companies start their businesses. But by the time most b-to-b mailers reach these new concerns via rented or compiled lists, the firms may have been around for a year-or may even have gone out of business.

But some mailers have found sources of much newer business names. For instance, ñ10 million computer accessories cataloger Cyberguys has for the past three years been using the New Business Leads compiled list from database provider InfoUSA, which gets names of brand-new companies through local courthouses. (All legitimate new businesses must file for a business license through local county courts.)

The list, which is updated monthly and offers names of businesses that are less than three months old, is also used by such b-to-b mailers as Chiswick Trading Corp., New England Business Services, and Reliable Home Office, among others. A similar business database is offered by compiler Accutrend.

According to Cyberguys owner Wes Sumiba, the prospects from these lists typically respond two to three times better than other prospecting lists. “The high-tech industry, which we serve, is such a growth industry now that when you rent most lists, they’re rented to dozens of other companies,” Sumiba says.

Using city records as a source Rancho Cordova, CA-based Cyberguys, which mails four catalogs annually with a total circulation of 2 million, typically mails to as many as 40,000 new businesses a year through the InfoUSA database. InfoUSA goes into different cities in the U.S. and pulls the data from city records, says InfoUSA spokeswoman Shelly Vaughn. “Typically, these businesses are just opening, and we can get their names before everybody else.”

Cyberguys chooses Standard Industrial Classification (SIC) code selects of such businesses as small computer stores, software manufacturers, accounting firms, and computer disk duplication firms, Sumiba says. “And if we want to mail to more new businesses, we might broaden our SIC selects.” Brand-new businesses “are in a spending-money mode,” he says. What’s more, these new customers “still respond very well a year later.”

Depending on the selects chosen, the cataloger pays 11 cents-20 cents per record to rent the names, which cost about 2 cents more per name than typical list selects. But Sumiba says that Cyberguys yields a 50%-plus return on investment with these names within a year. And with the strong economy, “new businesses are spending more money, and our response from these kinds of names is up at least 30% over last year,” hesays.