The New Select

ARE YOU WONDERING why that top-performing list you rented in 1997 just didn’t cut the mustard this year?

One answer: Take a closer peek at where those names came from. Telemarketed and Web responders are creeping into traditional direct mail files at a dizzying pace, and experts say this could hurt response.

“If mailers see that their favorite list has been diminishing in response over the last several years, it may not be their product, it may be the introduction of Internet and telemarketing response sources,” says Steve Roberts, president of Edith Roman Associates Inc. in Pearl River, NY.

There’s no question the mix is changing as DMers shift dollars from mail to other media. For example, the subscribers on Cahners Business Information’s circulation file (4 million names from 130 controlled-circulation publications) were once 100% direct mail generated; now, up to 50% of the names are telemarketed, and 10% come in through the Web. And those percentages are growing, says Mike Doepke, executive director of marketing and sales for Cahners Business Lists.

Another example? Insight, a 934,000 name file of computer, hardware and software buyers reported second quarter unassisted Web sales increased 375% over the same period last year representing 5% of the company’s $237.4 million in net sales for that quarter, says Chuck Jarrell, vice president of marketing for Tempe, AZ-based Insight.

These hybrid lists “most definitely” affect response, says Uni-mail List Corp.’s vice president Carolyn Woodruff. Both mailers and list executives predict that source may be the next paid select.

“We got through the 80’s and 90’s with RFM. Perhaps one of the next selects is source,” says Jeffrey Kelley, senior vice president of list management for Millard Group Inc., Peterborough, NH, who is encouraging his catalog clients to offer print as a source select.

While you won’t yet find Web or telemarketed source selects on most lists, experts say you will in the near future. “Why lose a large mailer if you’ve had a shift in response?” Kelley advises list owners. “Offer the select so you can continue to use that portion of the file that works.”

Some list managers, like Edith Roman, already offer Web and telemarketed source selects, and plan to on all their managed files. For example, Roman’s 387,399-name Surplus Direct file now includes 60,365 Web buyers; the select is available for an additional $10/M.

Select prices can range from an additional $10 to as high as $200 for a one time telemarketed offer.

Would mailers be willing to pay? “Yes, I would expect to pay for a source select, and I think it’s going to happen,” says Sharron Mahoney, associate consumer marketing director/list manager for Conde Nast, New York, NY.

List pros say that Web and telemarketed responders will be offered either as a separate files, or as selects -as long as they produce revenue for list owners without creating competition for their businesses.

For some, that revenue stream is already flowing. The 30,000-name Publishers Exchange Sweeps Entrants file, promoted as 100% telemarketed, rents at $85/M. Cataloger Omaha Steaks now markets a 41,000-name file of Internet buyers for $165/M. Spiegel recently launched a 40,000- name Internet buyers file, and J Crew offers a 47,000- name Web buyers list.

Other catalogers like Coldwater Creek and Lillian Vernon don’t yet have enough Web-generated names to compile separate files, but they plan to as those numbers rise. The Coldwater Creek list remains 100% direct mail sold, but a separate file is being generated for Web responders, says Teri Oliver, circulation director for Coldwater Creek. “If the volume of Web customers becomes large enough, we would offer the names on an exchange relationship initially and as the market grows we would offer the names as a separate select,” Oliver says.

Lillian Vernon spokesperson David Hochberg adds that less than 1% of his firm’s customer orders currently come in over the Web.

Telemarketed responders have been around for a while, but their numbers are growing as telemarketing itself becomes more popular in industries like publishing.

“It’s harder and harder to get people to requalify by mail,” Doepke says of controlled circulation subscribers. “They’re not taking the time to fill out the card, they want to respond quickly.”

That’s certainly seems to be the case with CMP’s Information Week. That subscriber file now consists of 375,000 names, 12.5% of which came in via the Web, and 16.&% of which were telemarketed, says Tom Kraemer, group circulation director for CMP, Manhasset, NY. Kraemer predicts the Web number will rise to 25% within two years.

The number of Web responders will grow as more time and money are pumped into promoting Web sites and digital stores, and as consumers become more comfortable sending their credit card numbers into cyberspace, experts say.

But the boom in telemarketed names may not last forever cautions Mal McCluskey, president List Services Corp., Bethel, CT. “In the short term there is a lot of demand for telemarketed names, but we think that eventually people are going to be able to screen their calls and that could put a crimp in telemarketer’s growth,” McCluskey says.

How many list owners offer Web and telemarketed responders as a select? Because the introduction of these responders as a source select is such a new concept, SRDS was unable to provide statistics.

“I don’t have a good answer for you but its a great thing to track and we’ll probably be doing something different to separate (these names) in the future,” says Mary MacLaren, senior director of data acquisition for SRDS, Des Plains, IL.

Some sources warn that list managers may not be quick to tell mailers about the mix of names because that may lead to mailers renting less. Others counter by saying that would sabotage the mailer who may not return to use the list again.

So what should mailers do if they want to determine the source composition of a list to achieve maximum response? Ask the list owner, broker or manager or request a Business Publications Audit statement for the file from BPA, New York, NY, (www. bpai.com). The statement, updated every six months, gives the source breakout-direct mail, telemarketed, Internet and age of data, says Edith Roman’s Roberts. “Mailers need to get serious about understanding the sources that are combining to form the list they’re using.”