When Ardmore, PA-based Collectibles Records Corp. decided several years ago to ramp up its catalog business, the company hired an outside list firm to manage its 100,000-name list.
“Up until that time, we handled our list internally,” says Joe Buesgen, vice president of consumer-direct marketing for the music publishing company. “But we weren’t large enough to dedicate an individual to that task alone, so inevitably list management took a backseat to other, higher-priority tasks.”
In this day of overstretched resources and multitasking, many catalogs are coming to the same conclusion as Collectibles Records and outsourcing list management. According to Catalog Age’s Benchmark Reports on Lists, the percentage of mailers using outside list managers has increased from 24% in 2000 to 42% last year.
The obvious benefit of outsourcing list management, says Katie Muldoon, president of Tequesta, FL-based catalog consultancy Muldoon & Baer, “is that you have a dedicated person who does nothing but sees that your list gets the highest exposure and is kept in pristine rental condition.”
That was a key reason gifts and home products cataloger Lillian Vernon Corp. turned to an outside list manager three years ago. For 48 years, the Rye, NY, mailer used an inhouse list manager, says spokesperson David Hochberg.
But in March 2000, after its sales fell 3.5% from 1998 to ’99 — a time when much of the industry was enjoying increases — Lillian Vernon hired a list firm to increase rental income from its 2.6 million-name 12-month house file. “They have more staff and resources in the industry to give our list more exposure,” Hochberg says, though he won’t reveal the extent to which the cataloger’s list revenue has increased. Currently Lillian Vernon’s list is managed by ALC of New York. Lillian Vernon also hired Greenwich, CT-based list firm Direct Media to market its package insert program.
George Mosher, president/CEO of Milwaukee-based office furnishings mailer National Business Furniture, has a similar rationale for having a list firm — Direct Media — manage his list. Direct Media “has a lot more awareness of the list. I don’t think we’d do a great job of marketing our list inhouse.” What’s more, “we believe in having as few executives on staff as possible.”
Rolling Meadows, IL-based Silvo Home has had its 60,000-plus-name list in the hands of outside list firms for the 12 years that brothers Stu and David Zirin have owned the company. The cataloger has worked with ALC of New York for the past several years.
An outside manager, says Stu Zirin, president of the home products cataloger, is more in tune with the marketplace. “When someone comes back and wants a select or, say, a 60% net-name arrangement, I don’t know if that’s fair or not. But I can ask my manager if that seems reasonable, and the manager may say, Let’s get back to the renter and take a certain [comparable] amount of our net with their list.”
Skincare and cosmetics cataloger Key West Aloe went straight to a list manager — Hightstown, NJ-based George-Mann Associates — when it decided to put its 125,000-name house file on the market in 2001. “Our manager is aggressive in marketing our list and is very good at getting us into new markets,” says David Hecht, purchasing manager at the Key West, FL-based marketer. “That’s important for a cosmetics cataloger like us, because it can be very hard to break into certain markets in the list business.”
For instance, in 2001, Key West Aloe’s list was rented to one “widely known high-end women’s apparel cataloger,” the name of which Hecht won’t reveal. It was the first time a women’s apparel mailer had rented Key West Aloe’s list; after the list manager spread the word about the cataloger’s success with the list, other women’s apparel mailers wanted to rent it, Hecht says.
While outsourcing list management has some obvious advantages for small and midsize catalogers, if you have an in-demand file with hundreds of thousands of names, you may want to keep management inhouse. Once what you pay in commissions to a manager each year reaches what you’d pay a full-time list manager — including benefits — it makes sense to hire someone inhouse, adds Muldoon & Baer vice president Jack Baer. Owatonna, MN-based Bernhart Associates Executive Search estimates that a typical catalog list manager earns $60,000-$70,000 a year, depending on the region of the country.
Some smaller catalogers also keep the job inhouse — often because they can’t meet list firms’ size requirements. Geoff Batrouney, executive vice president of New Rochelle, NY-based list firm Estee Marketing Group, says that newer catalogers usually need at least 5,000 names before a list firm will consider managing the account; mature catalogers’ lists typically needs to at least 15,000 names.
And some mailers keep their lists inhouse so that they have control. George Wachob, president/owner of Charlotte, VT-based Hearthside Quilts, says he manages his company’s list inhouse because he prefers to “have total control and security — we’re always paranoid about that.”