List Watch: The Benefits of Older Names

Several list professionals estimate that, as a result of sluggish catalog sales, the number of 12-month buyer names available for rent has dropped by as much as 10% this year. To compensate, a number of catalogers are turning to a select they may have snubbed in the past: 13- to 24-month buyers.

“Companies like ours that are healthy and trying to grow are struggling to find names,” says Julie Hopkins, director of marketing and advertising for San Francisco-based gadgets cataloger/retailer The Sharper Image. “So this is one way to prospect above break-even.”

Sensing a drying up of 12-month names last year, Sharper Image tested 24-month names from tried-and-true rental lists during holiday 2000. Then this past Father’s Day, “we chose to mail deeper into the six or seven lists that perform about four times better than any other lists we’ve tested,” Hopkins says.

When mailing to older names, The Sharper Image narrows its criterion for average order size. Whereas the cataloger typically grabs buyers of all average order sizes when it rents 12-month names, it will select only buyers with average orders of at least $50 when renting older names, Hopkins says.

Fran Golub, senior vice president of list management for Pearl River, NY-based list firm Walter Karl/InfoUSA, recommends that strategy to other catalogers mailing to older names. By targeting buyers with higher average orders — even though they haven’t made a purchase in 13-24 months — catalogers have a better chance of making at least one sale at an above-average order size, she says.

Delray Beach, FL-based cataloger Levenger, which sells reading and writing implements, also started using older names during holiday 2000. “We’re simply going deeper into files than we used to go,” says director of marketing Tracy Lamb.

Among the older names that have worked for Levenger are those from The Sharper Image, home furnishings cataloger Frontgate, travel apparel book TravelSmith, outdoor clothing and sporting goods mailer L.L. Bean, apparel and gifts title Norm Thompson, and kitchenware cataloger Williams-Sonoma. Lamb likes to start by testing 10,000 names. Then, for the better-performing lists, the company will rent up to 50,000 names at a time.

Unlike Sharper Image, though, Levenger won’t go beyond 18-month buyers. “I just haven’t seen the results to warrant it,” Lamb says.

As for response, Lamb says that there’s typically a 20% falloff in response with 13- to 18-month names compared with 0- to 12-month buyers. “But they’re probably as profitable as the newer names we get,” she says, “because we go for higher average order selects.”

Another reason older names can be profitable: They’re cheaper. In calculating return on investment when testing 13- to 24-month buyers, John Papalia, president/CEO of Danbury, CT-based list firm Statlistics, suggests that you factor in 20%-30% lower costs per name compared with 12-month names. Consumer lists of 13- to 24-month buyers average $90/M, compared with $110/M among 12-month files.

Too great a drop-off

But tapping into older lists isn’t for all catalogers. Christopher Bradley, president/CEO of Portland, ME-based bedding mailer Cuddledown of Maine, has no interest in buyers beyond 12 months. “We’re still seeing strengths in more-current names,” he says. The drop-off for his company is historically too much among the older names, even though they’re less expensive.

Bradley’s strategy in this year’s tough economic environment is to “try to get back to the strongest segments of circulation you can. The older segments of lists really aren’t the strongest,” he says. “We find that even 7- to 12-month buyers drop off 70%-80% from 0- to 6-month buyers.”

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.