As economic uncertainty causes consumer spending to slow, it has also led to a decrease in new names to rent. Fewer prospects placing orders and fewer established customers making repeat purchases translates to fewer new names and hotline names available.
Steve Rowley, president of Westerly, RI-based The Paragon Holdings, a $115 million gifts mailer that sells through The Paragon, Bits & Pieces, and Popcorn Factory catalogs, says that the lists he has rented so far this year are, after merge/purge, an average of 5% smaller than those he rented last year.
Large, multititle mailers aren’t the only ones finding fewer new names to rent. Atlanta-based Hobby Builders Supply, a cataloger of dollhouses and hobby accessories with sales of less than $10 million, has found in its merge/purges of rented lists and continuations this year many more duplicate names than in past years, says Debra Ellis, president of Marietta, GA-based Wilson & Ellis Consulting, who handles the cataloger’s list rentals. “That seems to say that many of the names are those that the list owner has had in its file forever,” she says.
For instance, with one particular list continuation that Hobby Builders rented in January, the cataloger came up with a dupe rate of 53%. The norm for that list would be about 30%, Ellis says. The list owner “is just not acquiring many new customers.”
To make up for the lack of available prospect names, Hobby Builders has increased its magazine and newspaper space advertising and launched an e-mail marketing campaign. The company is also mailing more often to its house file than it has in the past. “We’re finding that a more aggressive combination of catalog and postcard mailings to our existing customers is working,” Ellis says. The postcards tout one-day sales, free shipping, and 15% off to customers who have already received the catalog.
Indeed, “if catalogers can’t get as much circulation from prospecting, they need to use more house file names,” says Kathy Duggan-Josephs, president of Ridgefield, CT-based list firm D-J Associates. “We’ve been doing more regression modeling with some clients, which helps mailers identify untapped pockets of their house files that could potentially be successful.”
List rental income down too
As would be expected, on the flip side of the equation, a number of mailers have seen their list revenue decline this year. One mailer, who requested anonymity, says his company’s rental income has plummeted 10%.
Although list rental income for Boca Raton, FL-based The Mark Group, a $120 million multititle apparel and gifts cataloger, has yet to take a hit, the company has still felt the effects of other catalogers cutting back on prospecting. Director of circulation Debbie Musikas reports that whereas in the past the company’s catalogs — Mark, Fore & Strike, Boston Proper, and Charles Keith — obtained 80%-90% of their names through list exchanges, this year only 75%-85% of their names have been exchanges.
“If we want to get 300,000 names from another catalog through an exchange,” Musikas explains, “that cataloger may want to exchange only 150,000 of our names this year because it’s not mailing as aggressively as last year. So we’re forced to rent the other 150,000 names that we need.”
Prospecting for Names
Looking to compensate for a decline in prospects and hotline names? Try these suggestions:
-
Make less productive lists more profitable by tightening recency or frequency selects, or by applying zip models so that you mail to names from your best zip codes.
-
Maximize quantities on your best lists. If a six-month, $100-plus-average-order select works well, “try either the 7-12-month select at $100-plus or the six-month select at $50-$99,” suggests Steve Tamke, senior vice president, list brokerage, for Hackensack, NJ-based list firm Mokrynski & Associates.
-
Step up remails. “If a list is giving you, say, $2 per book,” Tamke says, “you may be able to get an additional $1.40-$1.50 per book if you remail three or four weeks later. And that may be better than adding a marginal list that can only yield $0.90 on the first mailing.”
-
Drill deeper into your house file, suggests Debra Ellis, president of Wilson & Ellis Consulting, to achieve greater customer reactivation.
— PM