How the ‘Net can speed the rental process
List companies have long recognized the inefficiency of the list ordering process: A mailer sends an order to a broker, who cuts an official order for a list manager. The manager then rekeys the order data into his or her system, generating a new order for the service bureau. The service bureau often goes back to the manager with an updated count, and the process begins again. One list order can take up to 14 days to turn around.
But consolidation in the list business, the rise of co-op databases, and a general decline in list order sizes are driving many to seek out more efficient ways of doing business. “The list business is dealing with shrinking margins and increased labor costs, and people spending their time moving paper is wasting our resources,” says Ben Perez, president of Peterborough, NH, list firm The Millard Group.
So Millard is turning to the Internet to help streamline day-to-day operations. “We’ve made good progress using the ‘Net for an increasing amount of communication with our clients,” Perez says.
Millard isn’t alone. Many list firms already host their own sites and fulfill list orders electronically by giving mailers an access code enabling them to download their orders by file transfer protocol (FTP). Other list firms fulfill orders by e-mail.
“We now process 30%-40% of our orders via e-mail,” says Tom McCulloh, vice president of list management at Pleasantville, NY-based Listworks. “Clients can go to our bulletin board with codes to pull down their lists. And we have a service bureau right here. Of the 35%-40% of service bureau order processing that is electronic, 90% is through e-mail.”
Farmingdale, NY, service bureau Anchor Computer transmits more than half of its list orders electronically, up from 20%-25% a year ago, says Joe Balaban, vice president of business development. “For the right-size file, electronic transfer is a tremendous time-saver. We can process any file under 500,000 names in hours.”
But transferring a larger list electronically isn’t so efficient. “We have some service bureaus tell us it takes as long to e-mail a file as it does to set up a tape,” says Bruce Kimmel, vice president of list marketing services for Cresskill, NJ-based list firm NRL Direct. What’s more, e-mailing a 1 million-name list increases the risk of a system crash.
Difficulties in transmitting large lists aside, the Internet offers another benefit: fast updates. “Hotline lists can be ready to ship five days into the month,” Listworks’ McCulloh says. “It used to be typical to have updates ready by the 15th of the month, but some mailers needed their lists by the 12th. Now we’re getting the business we were missing because of that delay.” He predicts that as more lists are updated electronically, “we’ll see a lot more two-week and one-week hotlines.”
Although the Internet is reducing list processing time, some professionals believe that the list industry still needs a universally understood system for taking orders, fulfilling orders, and sharing information online. “If the airlines can do it [with their ticketing systems], so can we,” says Millard Group president Ben Perez. “But it’s going to take the top four or five firms that control 80% of the business to realize that they need to cooperate before the process is standardized.”
This idea is hardly new. As early as 1995, David Schwartz, president of list firm 21st Century Marketing, was advocating the use of electronic data interchange (EDI) to standardize the ordering process and transmit information electronically. But list firms balked at making the sizable investment necessary to integrate their systems.
Now Schwartz, like many others, envisions the industry using the Internet to streamline the order process: “We can have a separate site to provide a database available 24 hours a day. We could use it to instantly update counts. It would eliminate duplication and the delay necessitated by postal mail, and ideally it could offer a centralized list exchange. Clients could keep track of their orders through this site by using a password.”