Will Your Prospect List Fail? Consult Your Broker Report

To guesstimate the effectiveness of a new rental list, take a look at the broker report, suggests Jim Coogan, president of Santa Fe, NM-based consultancy Catalog Marketing Economics. Specifically you should look at the gross-to-net percentage: the number of names dropped in the merge/purge because they duplicate names found on other lists in the merge.

Generally speaking, the more names your house file has in common with an outside list, the greater the likelihood that the outside list will perform well for you. “If a new list nets down to 75% of the gross input,” Coogan says, “it has a great chance of responding above breakeven.”

Conversely, if a prospecting list nets out 99% or more, indicating almost no crossover with your established buyers, you’re unlikely to break even from that list.

“Look at past gross-to-net percentages from prospecting lists, and compare the gross-to-net percentages with the list’s response rate,” Coogan continues. “You can use historical data to develop guidelines to ‘red flag’ a prospect list if you don’t see any crossover with your house buyers.”

If a list has very little crossover, either cut back on mailing the list and test only a few thousand names or drop the list entirely from the mailing. “It’s better to absorb the cost of a list rental than to pay the full in-the-mail cost of printing and postage for a list that has a very low probability of success,” Coogan says.

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