Small cataloger or large, consumer marketer or business-to-business, a mailer needs to keep an eye on what its list management firm is doing with its list. The question some catalogers have is what to watch out for, and how.
To ensure that their list managers are working hard enough on their behalf, some mailers, such as Bear Creek Corp., L.L. Bean, and New England Business Service (NEBS), hold the managers to specific revenue goals or a minimum number of promotions.
“We are diligent in reviewing results,” says Cathy Fultineer, senior vice president/general manager of direct marketing for Medford, OR-based Bear Creek, the parent company of the Harry and David and Jackson & Perkins catalogs. “We budget yearly and expect the list manager to meet or exceed his or her goals.”
Groton, MA-based NEBS, a $520.6 million multititle cataloger of office products, workwear, and shipping supplies, works with its manager annually to come up with a list revenue forecast, based on past performance.
“We break [the forecast] into monthly goals and monitor activity regularly,” says NEBS list rental revenue manager Lynne Hembrow. NEBS looks at the list clearances (the request forms that its manager submits to the cataloger prior to renting out its list) nearly every day.
NEBS also keeps a rolling tally of its list revenue for the month. “If at midmonth we’re at 50% of our goal for that month,” Hembrow says, “we’ll try to anticipate whether we’ll make the goal for the month.”
Being given specific revenue goals has spurred NEBS’s list manager to create innovative rental initiatives — for instance, promoting the computer buyers segment of the NEBS file as a separate list, which garners the names more attention from brokers than they attracted as a select. Such initiatives have enabled NEBS’s list revenue to double during the past five years, Hembrow says.
To further encourage its list manager to meet its goal, Bear Creek uses financial incentives, Fultineer says. For example, if a manager exceeds the revenue goal, Bear Creek will pay the manager an additional fee.
More than revenue
When monitoring your list manager, you may want to check for more than how much list revenue he or she is bringing in. Forone, you might want to make sure that you have a mix of continuations and new renters. This ensures that you “keep the food chain going,” Hembrow says, “to replace any fall-off with new orders.”
Then there’s the matter of whom your manager is renting to. Freeport, ME-based L.L. Bean makes sure that the manager isn’t renting its names for mailings it deems inappropriate, such as a sales flier, says chief financial officer Mark Fasold. “For the most part, we want our list going to higher-end brands and reputable catalogs.”
Fasold says that Bean prefers to see the actual catalog before agreeing to rent its names to it. “And if we see something really competitive with us, something inappropriate, or just something we don’t want our customers to have to deal with, we might not rent out the list for that purpose.”
Neglecting to oversee your list management can lead to undesirable rentals and even lost revenue.
“I was too busy to keep track of the promotions my former list manager did for our file,” admits Ed Ruethling, vice president of marketing for Spring Valley, CA-based Chinaberry Book Service.
Once Ruethling did request some quantification of the manager’s promotional efforts, it “became a sore point,” he says. But soon enough, “it became apparent that our list wasn’t getting promoted enough.”
And lack of promotion, Ruethling says, translates to lack of rental revenue. So earlier this year, Chinaberry switched to a new manager. (See “Time for a Change?” at left.)
Time for a Change?
By keeping track of your list manager’s efforts on your behalf, you can ensure that he or she is promoting your list to your satisfaction. But if that’s not the case — and if despite your efforts to guide the manager, he or she still fails to meet your requirements — it may be time to shop for another manager.
“It’s never really one thing” that leads a mailer to switch management, says Andy Ostroy, president of list firm ALC of New York. Sometimes, it’s poor communication from the list manager to the cataloger in combination with a lack of attention or a lack of understanding about the market. But most agree that lackluster list revenue income is a significant part of the combination as well.
Such was the case earlier this year for books cataloger Chinaberry Book Service. The $11 million mailer has changed outside list managers four times during the past 20 years. Its latest switch was to work with a manager “who was more involved in the market we serve,” says vice president of marketing Ed Ruethling.
Spring Valley, CA-based Chinaberry produces the flagship catalog of children’s books and the Isabella catalog of spiritual-growth products. But the company’s previous manager marketed both of its lists within the children’s products segment, Ruethling says, although “we have a whole different demographic for the Isabella customer.” Under its current manager, Chinaberry has increased the number of rentals to catalogers selling spiritual-related goods, though Ruethling can’t provide specific figures.
While Groton, MA-based New England Business Service (NEBS) changed list managers five years ago to find one more in touch with its markets, the multititle mailer also sought a more aggressive list firm. The previous management “was passive with our rentals,” says list rental revenue manager Lynne Hembrow.
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