List management—the process whereby the asset value of a customer file can be monetized via controlled list rental—is a strategically sound business practice that is not incompatible with a company’s larger mission. In fact, list rental can enhance that corporate mission by responsible and tightly administered programs that improve the metrics of the company’s efforts and generate significant income. Consider:
• The names on your house file are already in the marketplace. It is unlikely that your names are unique to your company. Therefore you ought to profit from their rental to other quality, qualified mailers, under the auspices of a reputable, well-capitalized list management entity.
• The care and feeding of your file is a necessary and not insignificant cost. To maintain the effectiveness of your mailings, you must clean your file with adds and deletes, updating it for changes occasioned by the extraordinary mobility of the American consumer (15%-20% a year in times of affordable interest rates) and the inevitability of life changes. Adding geodemographic selections so that you can improve your response rates, for instance, is a quite significant cost without an offset, except for the house file income the mailings produce. And it can take a while to see the payback: A mailing based on added file characteristics might take a year or more to deliver any results—good or bad. List management can and does pay off quickly. • You want clean, perfect, high-average-order, responsive lists but you are not willing to enter into a reciprocal transaction? How can you possibly expect to have that which you are not willing to offer? It is fundamentally a matter of equity, and as long as the transaction is between quality-minded, reputable, and well-run companies, everyone—all parties, including consumers—will win. Remove the offer of reciprocity from the table, and you fly solo. Solo geese rarely make their life-sustaining voyage alone and intact. They know to work together.
• Renting your names can garner you useful market information—information that’s not only free but that you are actually being paid for. Direct marketers use alphanumeric codes to control the recording of the echo from the offer. Make an offer on Monday via the Web or a catalog that hits that day, and by Friday we know what is going on with your own offer, with your own customers. We then put our file of customers in the market for rent. After a screening and approval process handled by your list manager, certain mailers pay you money to rent your file, to make an offer to your customers. And it works. And it works again. Let us assume for a minute you own a list of fishermen. Let us assume that a mailer of fishing lures rents your list three times in one year. Pray, what are we learning? We are being paid handsomely to learn what our customers want in real time. (Hint: Most mailers whose lists are in the marketplace tend to cash their income checks quickly and overlook the underlying intelligence that underpins the payment.) Mailers, you need to think about this!
• You are of good repute, your list manager is of good repute, your service bureau is of good repute. You are making a lot of money, essentially investment-free income. When—not if—the actors in the play are all on the “A list,” you have nothing to fear when the income is realized. And this is the last reason: the income. The preceding four elements must be in place, and the exercise must be organized and controlled—a strategic decision, not a tactical stumble through the front doors of the bank.