Lists and Prospecting: The Price of Promotions

Everything has a price. And if you’re offering free gifts with purchase or other offers to prospects, you may have to pay surcharges to the owners of the lists you rent. In fact, some owners may refuse to rent you their names altogether if you plan discounts and promotions.

Some list owners worry that the gifts could compete with their own offers. Others feel that some promotions can give list renters more names than they’re paying for. For instance, when mailers blow in send-a-friend promotions, those offers can lead to gaining extra names before actual catalog purchases are even made, list owners reason.

The New York-based Metropolitan Museum of Art catalog, which has five drops of its holiday book, varies its free gift offers. And according to direct marketing manager Janice Herrmann, the owner of “a really good list we rent” specifies which free gift offers it will allow the museum to mail to its list.

The owner in question is a stationery cataloger, and it doesn’t want its customers exposed to a free stationery offer that the Metropolitan Museum’s catalog has run, “even though it’s an add-on with a minimum $100 purchase,” Herrmann says. “So for my second drop in which I target most of my prospects, I have to make the free gift a bookmark.”

Other list owners, Herrmann says, will tack on a $10/M-$15/M surcharge when the museum rents names for a mailing offering free gifts with purchase. “They feel we have an unfair advantage that’s perhaps too appealing to their customers,” she says. “I do have a real problem paying the surcharge, but occasionally I will because the list is so good.”

Wendy Gamache, director of marketing for Beverly, MA-based Appleseed’s, refuses to pay such surcharges. But the cataloger of apparel for mature women has “run into a lot of stipulations from list owners when I’ve tried to mail catalogs with sale items to prospects,” Gamache says. If an Appleseed’s edition contains even a small number of sale items inside, “the list owner sometimes insists that ‘sale’ not be mentioned on the front cover,” she says.

Some owners also refuse to rent their lists if discounts run too high — say, 20% off or 40% off, Gamache says. “Some want to know if the sale items are in one section or scattered throughout the catalog. Some owners may allow some discounts but not permit their names to be used for full 60-page sale catalogs.”

More often than not, Gamache seeks reciprocation. If other catalogers are going to demand approval of promotions before allowing Appleseed’s to rent their lists, “I want to be able to do the same thing with their lists,” she says.

Similarly, gifts cataloger The Paragon becomes “concerned when some catalogs to which we rent our list get too promotional,” says president/CEO Steve Rowley. But the Westerly, RI-based mailer sometimes wants to offer promotions to prospects as well, he adds, “so we get clearances and we understand when list owners don’t want to rent us their list for that purpose.” If another mailer wants to rent The Paragon’s list to mail a sale catalog of products unrelated to Paragon’s and not competing with its full-priced items, “that’s fine with me,” Rowley says. “But if it is sale products that compete against my full-priced merchandise, then that’s a problem.”

Making ‘friends’

Many mailers that included send-a-friend offers, which encourage catalog recipients to sign up friends to receive the catalogs, have had list owners refuse to rent files to them or been charged extra. But most list owners have lightened up on send-a-friend.

“It used to be a big deal to list owners,” says Linda Huntoon, executive vice president of Greenwich, CT-based list firm Direct Media. “But as time went on and people tested send-a-friend and found it worked, it became difficult to tell others they couldn’t do it.”

Some list owners still take exception to blow-in cards, rather than bind-ins, that make the offer, says Jeff Kelley, senior vice president, list management for Peterborough, NH-based list firm Millard Group. Most mailers have some offer on their order forms, he notes, and there’s nothing to prevent someone from calling and asking for a catalog to be sent to a friend. “But a postcard blow-in that falls out of the catalog is a little too proactive for some mailers,” he notes.

Pete Rice, vice president of marketing for the Plow & Hearth division of 1-800-Flowers.com, has run into such problems. While a send-a-friend offer on the company’s Magic Cabin Dolls catalog’s order form is typically approved, “when we’ve done bind-ins specifically targeted at name generation, we’ve had a few list owners who wouldn’t approve that.”

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