How to Find a Good List Manager for Direct Mail

If you're looking for a list manager, you must prepare a set of standards for what you want from a good one.

If you're looking for a list manager, you have no doubt taken the trouble to prepare a set of standards for what you want from a good one.

I don't have to remind anybody in this industry that list rental sales are an important source of income for a mailer. And although there are those who believe, as a famous Russian once said, that money is so far beneath a gentleman that it is hardly worth troubling about...well, few of us can afford to be patricians.

Direct mail folklore tells us that for about 50% of all direct mailers, list rental sales mean the difference between finishing the year in the black or red. Seldom having been a mailer myself, I can't tell you whether that's true; but I don't think there's any argument that list rental sales are meaningful enough for a list owner to take time to prepare to find a new manager.

And it's for sure that every list owner has at least three key standards that he wishes his new list manager to meet: that his paperwork be efficient, that the manager be prompt and honest in reporting his sales, and - most important - that he will make money for you. These are good standards, but they have marginally to do with whether the list manager is really good.

A good list manager is one that maximizes your income. And if you are a standard list owner in today's world of direct marketing, you probably won't have the faintest notion of whether the manager you pick will be able to do that. And when the manager you select has handled the list for a month, or a year, or even three years, you probably still won't be able to judge whether he's maximized the income on your list.

All list owners are vaguely aware of this; at the beginning of their search it's common for them to call their friends, even their competitors, to find out who's hot and who's not in the list management field. And when they've narrowed their hunt to two or three list managers, it's not uncommon for them to call executives of list owner companies whose files are handled by these managers to get a line on them. But while that can be helpful, it's not really conclusive.

Is there any way of arriving at an effective conclusion regarding the worth of the list manager you're considering? Absolutely. To start, it might be worthwhile to examine how sales can be maximized. That will give list owners at least the shadow of a yardstick as they begin their search.

A list management firm, as we know, feels that it has two responsibilities:

*First, to acquire as many lists as possible.

This is the direct mail equivalent of playing Monopoly - the more lists, the more income. Park Place today, Pacific Avenue tomorrow. Well, OK.

*Second, to enhance the income derived from each list, thereby making the manager's list owners very happy and making one's own management firm very successful.

For our purposes here, we're dealing with the second area of responsibility: the way a manager sells his lists.

In the broadest sense, there are two ways of deriving list sales; the first is product exposure. The manager will certainly choose to expose his list to the scrutiny of the list rental market. That is done, of course, with data cards, whether they are sent by e-mail or postal mail. It's also done with space advertisements, spots at exhibition booths, giveaways (free tests, a premium with each list rental) and so forth.

Exposing a list to the market almost always brings in the majority of rentals on that list, the reason being that most mailers don't have to be convinced to test a list that looks terrifically promising for them; a horticultural house will jump at a new list of buyers of garden products, for example. It is for that reason that a management house might very well claim a terrific rental record to its list owner when a lot of rentals, motivated by a good-looking data card, come flowing through the door.

But what distinguishes "exposure" advertising from "selling" is the relative lack of effort expended by the list manager to disseminate data on the list in these ways. To write a data card, to ask the appropriate person to design a space ad - those are two effective things to do, and they are necessary; but they don't go the extra mile, the essential mile, toward maximizing income.

It's axiomatic (and realistic) that list managers depend on "exposure" advertising. To start with, their standard commission (10%) is hardly enough to pay for more intense selling efforts.

At the time Computer Directions - the first modern list management firm - established the 10% commission 30 years ago, it looked pretty good; but in the light of the huge potential earnings from list rental for average, medium-performing lists, there's often not enough room to do anything but expose the list to public scrutiny. It's a real problem, but one that can be solved with a lot of ingenuity.

A low commission is only half the problem, though. The other half lies with list managers.

Because their efforts go largely unmonitored by list owners, outside of a monthly scrutiny of earnings, managers very often fail to go beyond the "exposure" effort. And yet, there are a sizable number of things to do to maximize income on a list - efforts that are not income intensive, but are time intensive.

Every list manager knows what they are: building a prospect file for a particular type of list; mounting a telephone sales campaign to sell tests to undecided prospects; corresponding via e-mail or postal mail to prospects in order to describe the affinities between the list the manager is selling and what the prospect wants; taking the time to be proactive with brokers by initiating phone calls about specific lists, rather then waiting for the broker to call with a specific question. And, of course, taking the time to visit list brokerage houses - something many list managers do, and a surprising number don't.

Back in the days when I ran a brokerage house, I would be stunned when some of the larger management houses would not come to push their managed lists for long periods of time. Sometimes years would go by; my beard would grow long, my associates would pass on to heaven, hell or another firm, depending upon circumstances...and still no visit from some major list managers.

Yet these efforts - those that separate the mere "exposure" list managers from the real salespeople - are often the difference between truly competent list managers and all the others.

So - to return to our original premise - what can a list owner do to ensure the highest quality list management service? Following is a checklist for list owners who have selected a group of prospective list managers and asked them to make a presentation.

*Ask your prospective manager to give you an overall sales plan for the list - a plan of action that you intend to hold him or her to.

*Ask your prospective manager to make up a list of potential renters of the file. Then ask him to articulate the marketing philosophy behind the list.

*Ask your prospective manager whether he will report to you, in person, on a quarterly basis, about plans for the next three months, and be accountable for performance in the previous quarter. Pay particular attention to the sales efforts this managerial candidate has made (phone calls, methods of getting close to the lists' likely best renters) rather than what he's done to expose the file to industry notice.

*When you ask list manager candidates to offer their presentations, make it clear that you're looking for hard predictions and a realistic set of discussions rather than a song-and-dance routine.

*Words mean nothing. About 99% of the list managers I know are honest and hard-working - let me make that clear before my next statement - but anyone can look you in the eye and tell you they're going to make you an additional $100,000 in the coming 12 months from list rentals. It's a human frailty. Ask them to prove it by telling you how.

A little sincerity is a dangerous thing, and a lot of it is absolutely fatal. I didn't make that up, but it sure hits ya in the eye, don't it? Better to stay away from sincere promises and concentrate on terse judgments.

And...good luck!

About the Author: Bob Castle is a marketing and technology consultant in the direct response business.