Strategy: When Prospects Aren’t Buying
What to do about declining results to prospect lists.
Response rates to outside prospect lists have been on the decline, and last year was no exception. In some cases, results to tried-and-true continuation lists are off by as much as 50 percent. This isn’t a trend that’s likely to reverse itself anytime soon. This month, I’ll look at some reasons why response rates have declined and what you can do to compensate.
Why Prospect Lists Trend Down
Response rates to prospect lists have declined for several reasons: unseasonably warm weather during this past fall and holiday buying season, large amounts of consumer debt (an ongoing issue) and low consumer confidence. Aside from these legitimate reasons, the most significant reason response rates are flat or declining is the lack of housefile growth. Last 12-month buyer file counts are flat and/or declining from year to year — a trend that’s difficult to reverse quickly, and is costly for list owners.
Therefore, when you mail continuation lists (i.e., prospect lists you’ve used previously), you’re mailing many of the same names over again. The same people who didn’t buy from you six months ago still aren’t purchasing today. Those who did buy now are on your housefile, but have been de-duped from the prospect lists you’re mailing, lowering the response due to the names remaining on the file. This is a simple case of list fatigue that’s likely impacting response rates to outside lists.
The cream’s being scraped off the top, and many people remaining on the lists you’re using continue to not convert at the same response rate. To grow a file these days, a list owner must prospect to marginal or less productive outside lists.
Response rates from many of the cooperative databases also are off. Flat or declining 12-month buyer counts cause a ripple effect. Like outside prospect list results, co-ops depend on fresh, new-to-file names to help enhance and/or refresh results.