Strategy Why You Should Rent Your Customer List (1,130 words)
Let's consider the facts. There are an estimated 270 million people in the United States. According to The Direct Marketing Association (DMA), in 1999 there were approximately 192 million individual mail order buyers (including catalog shoppers) in this country. This compares with about 131.6 million mail order buyers just five years ago! The fact is, consumers love to shop by mail! And it shows. Many of these buyers have made purchases from catalogs, having originated from someone else's list.
Catalogs that do not rent their housefiles in more cases than not are only hurting themselves. The truth is, they are not protecting their customers from mailbox clutter. The fact is, they are missing out on extra income without risk. Twenty years ago, it may have made sense to "protect" your housefile but the rules have now changed. Today, trying to protect your customers from receiving other catalogs—including those from your direct competitors—would be like trying to protect a teenager from going to an R-rated movie. Sophisticated modeling techniques and the use of cooperative databases like Abacus and CircBase/Z-24 have changed the way catalogers do business. So has the Internet.
In study after study, it has been proved that a customer list used by others performs better for the list owner over time. The companies who have tested this have "flagged" names three ways—1) names to receive all list rental offers, 2) names to receive only non-competitive offers and 3) names to receive no outside offers. These tests are generally conducted over a two- or three-year period and the names are "frozen" over time. The results, in all cases, showed that the names receiving all offers, including the competitive offers, responded best to the offer of the cataloger using the rental list. The worst case from the studies I have seen shows no affect on the response rate to your own offer if you rent your file. In well over half the tests I am aware of, the names that are rented perform better! Conclusion: Active mail order buyers are worth their weight in gold.