Optimizing Magazine Subscriber Lists

Using magazine subscription lists for prospecting is frustrating. Results are inevitably reduced by all the magazine readers who are not active mail order buyers, according to Jim Coogan, president of Sante Fe, NM-based consultancy Catalog Marketing Ecomonics.

Fortunately, you can use a cooperative database’s optimization programs to cut the wasted circulation of households that don’t respond and to find the active mail order buyers that will respond profitably to your offer.

“For optimization to be cost-effective, the magazines often need to be educated to the need for net-name arrangements,” Coogan says. The basic reason for magazines to approve net name list rentals is that some list rental income is better than no list rental income. And the magazine can leverage the benefit of optimizing the buyer file by offering a list rental select with the catalog buyers found using the optimization process. Magazines that offer an enhanced catalog buyer select see that tests, continuations, and list rental income grow significantly.

Optimization works by improving outside list results by isolating the most responsive buyers. It also saves costs by identifying and eliminating nonproductive subscribers. List optimization models a rental or subscriber list using co-op database data to rank the names from those least likely to respond to those most likely to respond. Simply put, the model ranks the names in the list being optimized in terms of RFM (recency/frequency/monetary value) characteristics. You then suppress the segments that won’t be responsive.

For a publishing or compiled list. 75%-85% of the names might be suppressed, Coogan says. In comparison, on a direct mail list with strong affinity to your catalog only 50% -70% of the list might be suppressed. Mailers typically pick the very best segments to validate that the best segments are profitable. “Smart mailers also pick segments from the middle of the model to establish a breakeven point and to estimate the size of the profitable list universe hidden inside the list being modeled,” he adds.

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