A Partnership in the Making?
It’s no secret that co-op databases can be your most powerful tool to find profitable catalog buyers. The question is, do you know where to look? Many names are hidden inside magazine subscriber lists for publications aimed at your demographic. Magazine lists can be marginally profitable prospecting lists, because they force catalogers to use the most recent subscribers. They can even fall below breakeven, which makes it unprofitable for catalogers to prospect above breakeven using them.
Catalogers can harness co-op databases to greatly improve response from magazine subscriber lists in two ways.
1. They can optimize a subscriber list. The co-op databases rank a list into 20 different segments based on the most recent mail-order transaction that household has made. This ranking and the dollar value of these transactions allow catalogers to pick the most responsive households from a subscriber list. Catalogers are able to accurately test where an optimized list will fall below breakeven. Optimizing a list is the primary benefit of a co-op database; it allows catalogers to select those households that will respond profitably to a catalog offer.
2. Use co-op databases to find poor performing segments of a subscriber list. Potential areas for concern include the following:
* names that aren’t responsive to mail-order offers;
* addresses that have become dormant and are no longer responsive to mail-order offers;
* households that have moved;
* households that should be suppressed because they’ve never bought within your merchandise category; and
* households that won’t be responsive to a seasonal or holiday offer.
Eliminate Non-Catalog Buyers
Optimizing lists at a co-op database will profoundly improve response by eliminating those households that don’t buy via mail order. But the problem for catalogers is that despite the fact that they can increase their list rental income by offering mail-order buyer selects using the co-op databases, many magazines aren’t members of co-op databases.
Therefore, you’ll need to negotiate a net-name arrangement directly with the publisher. Consider the following factors when negotiating a net-name arrangement.
* List rentals are profitable; getting a series of smaller list rentals is better than getting no list rental income at all because the list is below breakeven.
* You’ll share the results with the magazine publishers and educate them on the potential of increasing their list rental income.
* You may purchase space ads in the magazine to get catalog requests.
* You can share the results from optimizing competitive magazines.
* You can offer to share your National Change of Address adjustments and other list hygiene data you collect in your merge with the magazine.
* You can offer to share the results of your optimization so publishers can use this data to encourage other list rentals.
* You can ensure that their list won’t be added permanently to your database or used without their permission.
* You can offer to exchange your buyers for their upcoming direct mail efforts for new subscribers.
Having access to magazine lists within your merchandise category can be a major source of profitable prospecting names. Work with magazine publishers to negotiate net-name arrangements and encourage them to use co-op databases to make their subscriber lists profitable.
Jim Coogan is president of Catalog Marketing Economics, a Santa Fe, N.M.-based consulting firm focused on catalog circulation planning. You can reach him at (505) 986-9902 or firstname.lastname@example.org.