Strategic exchanges

Among the participants in Catalog Age’s 1998 Benchmark Report on Lists and Databases (see July issue), only 20% exchange names with competitors. But list exchanges are more than just a way to cut prospecting costs. Exchanges, which some list experts say can slash list fees as much as 90%, can also “help mailers control the balance and keep the number of names exchanged equal,” says Susan Rice Rappaport, executive vice president at Princeton, NJ-based list firm American List Counsel.

For instance, to make sure that your rivals aren’t out-prospecting you, you can insist on giving them only as many names as they’re willing to give you. “You must determine that both sides have the potential to mail each other’s names in equal numbers,” says Ralph Drybrough, business unit leader for business-to-business brokerage at Greenwich, CT-based list firm Direct Media. If one side is using more names than the other, “you come to the end of a six-month or yearly period with a tremendous imbalance” and have to decide how to even the score.

For that reason, apparel cataloger Eddie Bauer won’t exchange names with small catalogers. As a large and frequent mailer, “Bauer needs a strong file to go back to,” says Karen Mayhew, a list manager at Direct Media, “so it’ll wait until the other cataloger has at least 100,000 or so names.”

Of course, some catalogers would rather that other catalogers not have access to their customer names at all. Business-to-business and high-tech mailers in particular shy away from exchanging names, Rappaport says, as they feel their catalogs and markets are so niche-oriented that few direct competitors exist.

But many catalogers believe the benefits of exchanging names with a competitor outweigh the risks. After all, “your direct competitors’ lists are the ones th at will work best for you,” says Direct Media vice president Sheryl Benjamin.

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