List Watch: Testing for the Best

Considering the soft sales and lower response rates many mailers reported this year, it’s not surprising that catalogers have cut back on list testing and, in turn, become more selective about the lists they test.

“There has been at least a 20% decrease in list testing,” says Debra Goldstein, divisional manager of Scarsdale, NY-based list firm Leon Henry. And catalogers are more reluctant to go beyond core lists that are proven workhorses, adds senior account executive Barbara Henry Grady.

“When things slow down, mailers allocate less for testing,” agrees Ed Bocknik, executive vice president of Greenwich, CT-based list firm Direct Media. To encourage mailers to test more lists, this summer Direct Media is offering what it calls a risk-free list test program. For certain orders placed between July 1 and Aug. 31, mailers do not have to pay for lists that do not perform to agreed-upon standards say, generating at least a 1.5% response rate. (Several rules and regulations apply, of course.)

Seeking an affinity

Still, many catalogers remain reluctant to test far and wide. “We test only lists that show some kind of affinity with our offer,” says Greg Harper, vice president of marketing for Beverly, MA-based Appleseed’s, which sells clothing for mature women. “We have two brokers and are always challenging them to bring new lists to the table it tends to keep them hungry. If they know our offer well and what lists work for us, they can find lists with an affinity and eliminate those that don’t.”

Appleseed’s also requests sample catalogs from the mailers whose lists it considers testing, Harper adds: “We try to picture our customer buying from it if we can, we will test it.”

Besides looking at the basics such as affinity, demographics, and purchase behavior, when considering a list you should look at the recency of the names. Fresh is best, and list pros generally recommend that you look for files that are updated at least monthly.

Among other steps to take when testing a list:

  • Investigate the broker’s reputation. Look at the information presented on a list with a skeptical eye, says Stephen Mickolajczyk, president of the brokerage division of Oakland, NJ-based Catalyst Direct Marketing. For instance, many data cards simply list recency as “the last six months.” You might assume this means the most recent six months, when it may simply refer to the last six months on file for a list, “even if the list was from 1997,” says Mickolajczyk.

  • Consider the source. Sharon Vorhees, vice president of Cresskill, NJ-based list firm Conrad Direct, advises looking at how a list’s names were obtained. For instance, if the list is 95% direct mail buyers and 5% space-ad respondents, it may be worth renting even if you can’t select out the space-ad names, she says. “But if a list is 50% direct mail and 50% space, make sure you can select the direct mail names.”

  • Check out usage both initial and continuation. You want to be sure that other mailers that have used the file to target an audience similar to yours. And if catalogers ordered continuations of a list, it’s a safe bet that the file worked for them.

  • Use modeling technology. “My philosophy is to never test lists with fewer than 10,000 names; otherwise the results are inconsistent,” says James Matuszewski, cofounder/CEO of Lakewood, CO-based FeelGood catalog, which sells pain-relief and comfort products. Matuszewki says that he would rather test a larger amount of names and model the best segments.

Indeed, “since technology and data are much cheaper now, many more people are applying modeling overlays,” says Conrad Direct’s Vorhees.

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