No one questions that the list industry is changing rapidly. But when asked to predict the list industry’s status in five years, direct marketing professionals agree only that list firms will be radically different. Still, whether this month’s roundtable participants envision the list industry forging into the virtual marketing world or continually reinventing direct mail strategies, not one predicts the demise of list companies by 2005.
Robin Lebo recently left electronics catalog Crutchfield to start Lebo Direct, a cataloging/Web consultancy in Earlysville, VA.
I certainly see list management companies and brokerages becoming more inclusive. Not only will they have interactive divisions, but those divisions will work closely with traditional list divisions. And list management professionals won’t disappear, because they’ll always understand the dynamics of direct marketing, and the Web is essentially one direct marketing tool in the box.
We may have thought that once the dot-coms really took hold, all print marketing would go right online, but the Internet is actually creating more opportunity in the traditional channels. And as the Web grows, traditional list companies will find a whole new offline market – especially as the global marketplace becomes more important.
Many list companies I know are losing good managers and brokers to dot-com direct marketing divisions. For the immediate future, list firms are going to find themselves strapped for people with cross-knowledge of Internet and traditional direct marketing tactics. I think a general shortage of people with those skills will last for the next few years, and it’s not because there aren’t college programs addressing this area; it’s about experience. I think some reps get pigeonholed into working in specific areas – for a while, if you went into mailing list management, that’s all you did. When list companies can tell prospective employees, “Here, you can develop both your direct mail and Internet marketing skills at the same time,” they’ll attract people with that kind of dual experience.
Mike Michelak owns The Fly Shop, a Redding, CA-based fly-fishing outfitter and travel catalog.
I recently read a headline that said, “Get better or die.” I think that sums up the list industry’s future. My broker is constantly getting better – she has to. In my segment of the industry, it’s hard to find a large enough list for me to work with. By the time I get near 500,000 names, I’m duplicating 26% or more, and those lists are the ones my competitors are also using. To find new names, a broker has to be very creative. List recommendations and selection have to be innovative, or list professionals will find themselves left behind.
Look at the impact of the Internet already. Developing our Website became the single most important thing I did for circulation. I sell products, trips, and guiding services; my whole catalog is there on my Website, but still the most common request I get is for a copy of my print catalog.
In five years, the list companies that survive will be the ones that have continually gotten better, more creative, more capable of using this information. The rest will die.
Maggie Nelson is circulation and database manager at Omaha, NE-based Omaha Steaks, a cataloger of gourmet foods.
The list business is most likely to become a combination of traditional mailing lists and opt-in e-mail lists. We are unlikely to see increases in the number of available names from traditional catalog companies, but I think that direct mail will always be a profitable channel for most businesses.
We will start to see more e-mail lists and e-mail sponsorships. Thus, marketers should consider focusing on growing their own prospecting opt-in e-mail marketing lists as an addition to their traditional direct marketing efforts.
Research firm The GartnerGroup predicts that by 2001, 80% of customer contacts will be by e-mail. The good news is that e-commerce companies will use direct mail to increase traffic to their sites. This will increase the list rental income of traditional catalog companies. Many will rent their house files for mailing purposes, which will increase the universe of available names and benefit the list industry.
Bruce Hammer is director of catalog list management for Valhalla, NY-based list management firm Novus Marketing.
Although the list industry will look very different in five years in terms of how we are marketing to consumers, the critical key to success for list industry professionals will be to keep their eye on the ball in terms of service.
While catalogers are continuously challenged to find the right synergy between their catalog business and their Internet business, the list industry will be challenged to implement technology that will help it provide customers with more information, both more quickly and more accurately. For the list managers specifically, this means implementing technology that will allow us to provide brokers with information that addresses their needs more quickly and accurately, while completely protecting our list owners. We will also be challenged to find new ways of leveraging list owner assets to help them generate incremental revenue.
Despite the technology-oriented tools becoming available, at the end of the day, success for list professionals and catalogers alike will be determined by their ability to differentiate themselves. We will have to continue to delight our customers at every turn with innovative products and outstanding service.