Should You Rent Your List?
The catalog industry is somewhat unique in that it has built itself on collaboration. Whether by plan or by accident, the strategy of renting one anothers’ customer lists has helped — and continues to assist — the industry to grow.
But most importantly, this practice helped to build larger universes of good quality, mail-order buyers who became responsive to the convenience of shopping from their homes.
A catalog company won’t prosper in the long term if it’s unable to add new customers to its file. Simply stated: Growth is essential to success. You grow by getting more sales from your existing customers and by adding new customers. Getting more sales from existing customers can be profitable, but eventually you’ll experience attrition. So the only way to grow a housefile is to prospect for new buyers.
For catalogers, prospecting can be done in many ways: space ads, package inserts, radio and DRTV, to name a few. But the easiest, quickest and usually most economical way to prospect is through list rental. And since you’ll want to rent the lists of other catalog companies, doesn’t it seem only fair that you also be willing to rent your list? After all, if those catalogs didn’t put their lists on the market, you wouldn’t be able to grow your business either. Following are other reasons why renting your list is a good idea.
Although list rental activity has declined over the years (due to shrinking housefiles from many companies), rental list income still can add a significant amount to your bottom line. Since there’s little expense associated with the revenue, a large percentage of the revenue will drop down to your profit line.
It seems, however, that smaller companies often are afraid to put their lists on the market. I’ve heard these catalogers express concern that if they rent their customer lists to other catalogs these other companies’ offers may end up suppressing future response to their own efforts.