Lists and Prospecting: Rating B-to-B Compiled Lists

Compiled lists have long been a keystone of business mailers’ prospecting efforts. Homing in on selections from them was challenging, though, as the files were usually little more than records from Yellow Pages and public filings, with virtually no enhancements other than standard industrial classification (SIC) coding.

Fortunately, “the depth of information on companies listed in compiled files has improved in recent years,” says Stevan Roberts, president/CEO of Pearl River, NY-based list firm Edith Roman & Associates. “You can select based on job function, company sales volume and employee size, number of years in business, SIC code, and other selects. Five years ago, you couldn’t select all this stuff — or at most, it was very limited.”

Improved compilation techniques among the three primary business list compilers — Dun & Bradstreet (D&B), InfoUSA, and Standard & Poor’s — have led to much of the increased selectability. Rather than simply inputing data, the compilers now have employees call businesses to verify their status.

“We make more than 20 million phone calls a year to verify their existence and to make sure they have a storefront,” says InfoUSA chairman/CEO Vinod Gupta. “Then we collect information like the number of employees, square footage, number of PCs, key executives, etc.”

What’s more, “more than 95% of records now have zip + 4 addresses,” says Vesta Beany, marketing database manager for Moorestown, NJ-based Interline Brands, which produces the Wilmar, Barnett, and Sexauer catalogs of building maintenance and repair supplies. “Formerly, certain geographic pockets weren’t included in compiled lists” because zip + 4 address coverage wasn’t nearly as complete as it is today.

The way in which SIC codes are assigned to compiled files has also improved considerably. Selections that began with 15-20 four-digit SIC codes in all U.S. geographic areas “have evolved into selections of more than 50 six-digit primary SIC codes,” Beany says.

Each digit in an SIC code — of which there is no official limit — corresponds to a level of detail about the companies. As the compilers take SIC codes selections further, each code has additional unique requirements, such as employee counts, specific hotel room count, or simply omitting specific zip codes.

During the past several years compilers have “drilled down” deeper into the SIC codes when building their files. For instance, more than five years ago D&B used only the first five digits of the code to compile files. Now it sorts companies to an eight-digit level of the code, allowing for greater specificity. Other compilers, such as InfoUSA, compile names up to a six-digit level.

Say a marketer of square-drive screws orders compiled lists of hardware stores; no longer will it receive all records with the word “hardware” in their names. After all, companies such as Acme Computer Hardware or Ajax Marine Hardware don’t sell the sort of hardware of interest to woodworkers or building maintenance crews.

Model opportunities

With the files vastly improved, “the idea is to overlay as much data as you can onto compiled lists,” says Tom Jule, vice president of marketing services for Thorofare, NJ-based RapidForms, a division of New England Business Service (NEBS) that specializes in imprinted office supplies. “You can take a name and bring it to other sources.”

“Additional and more accurate data are available for analytics and targeting,” adds Beany of Interline Brands.“There are many fields that we receive automatically today that may have been available in the past but not purchased due to astronomical costs.” For instance, all geographic areas in the U.S. are now available; in the past some pockets may have been excluded.

With the more accurate and improved data available through phone-call verification, business catalogers such as Interline believe they can prospect more aggressively if response is likely to be better than it was in the past.

Some b-to-b catalogers, such as Groton, MA-based NEBS, use compiled files to create models based on their house files. “We can match our names and addresses to those from the compiled files” that have similar characteristics, says technical service manager Mary Cullinan.

NEBS has been licensing, or leasing, names on a regular basis from D&B and other compilers, Cullinan says, since “no one file has all the names.” She notes that when compilers began adding two key selects — company employee size and company sales volume — it made sense for NEBS to begin licensing compiled files.

Unlike with renting names, in which you typically pay for the same names each time you rent them, Cullinan says, “if you lease, you can remail those names as many times as you like — as well as leverage all the overlay data on the file for modeling and analysis.” According to most sources, leasing names typically costs about 10% more than renting lists.

No dramatic results

With all the advancements in compiled files, you might expect response rates from them to have improved dramatically in recent years. But several b-to-b mailers say they’ve seen no change in response rates.

At NEBS, for instance, reponse rates from compiled lists have not improved, but Cullinan attributes this to increased competition.

Interline Brands’ response from prospects taken from compiled lists hasn’t improved either, Beany says. “But previously inferior data quality and subsequent poor deliverability of mailings have been offset by increased direct mail competition,” she says.

Business Buyers on the Move

Business-to-business catalogers have all they can do to find — and retain — mailable names, considering the rapid mobility of the U.S. workplace. Just when you think you have a viable customer contact, that employee leaves his or her company. In fact, according to compiled information provider Dun & Bradstreet, within the next 60 minutes:

  • 240 business addresses will change
  • 150 business telephone numbers will change or be disconnected
  • 112 executive changes will occur
  • 20 businesses will fail
  • 12 new businesses will open their doors
  • 4 companies will change their names.

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