Maximizing Your List Rental Income
by Stephen Lett
List rental income has been down the past few years for most list owners. Mailers have shifted away from renting outside lists to selecting prospect names from a cooperative database. There has also been a shift away from renting lists to exchanging names as a way to save money. With the use of outside rented list down as much as 40%, what can a cataloger do to maximize the amount of list rental income they generate? That is the subject of our column this month. We will explore ways to maximize your list rental income during these times of uncertainty and change.
Here are a few suggestions for maximizing your list rental income.
- Grow Your Own House File - Obviously the largest single factor that affects your list rental income is your own growth rate. For example, a 12-month buyer file that is growing at a healthy rate will generate increase their list rental income. As your house file grows, so does your list rental income. If you reduce the amount of prospecting you do and slow your own rate of growth, this will impact your list rental income. It will also affect the growth rate of a mailer who depends on your list. If you have fewer names to rent, they too will be impacted.
- Be Smart With Exchanges – DO NOT exchange with other catalogers unless their list works for you. Too many times, we see catalogers racking up large exchange balances that they will never use. Some list manager’s pressure catalogers to accept names on exchange for their own economic gain. If you already have a large exchange balance with another mailer or if a list is not working for you, do not exchange.
- Be Flexible on Pricing – Work with the mailer to be certain your list is affordable and reasonable. Be willing to negotiate “select” charges and net names. Do not hold hard and fast to your rate card. Deals are being negotiated every day. It is to your advantage not to miss out on list rental income over a few dollars per thousand. Catalog list prices are often prohibitively high. Waiving select charges or capping selects can often be the difference between a mailer canceling an order or placing a successful test that results in future continuation orders. Five continuation orders at a discounted rate is better that no orders at a higher standard data card rate.
- Offer as Many Selections as Possible – This will open doors to additional mailers. Consider offering geographic, gender, dollar, recency and other selects.
- Enhance Your File With Other Data – Offer file overlays through one of the cooperative database (assuming you are a participate in a coop). You can also have your service bureau overlay your file with third party data from one of the large consumer databases. Enhancing your file makes sense if you have a 12-month file size of 700,000 or more. If the size of the list is smaller than that, there won't be much to select once you start drilling down on the detail.
- Offer Product Selections - Also, offer product selects that can enhance your file and maximize the amount of list rental income you generate. For example, you can offer certain product category selects such as jewelry buyers or Irish product buyers, etc. The more you can “drill down” and enhance your file, the more your file is worth to a given mailer.
- Offer Tiered Pricing – Offer tiered pricing beyond publishers and/or fund raising rates for food, insurance, club, etc.
- Non-Reciprocal Orders – Don’t decline a mailer just because they cannot reciprocate. Be willing to rent to someone who will not rent to you. This goes against one of my former rules but times are changing. As long as you can rent your list to a legitimate firm knowing their list is not available can increase your rental income and your bottom line.
- Update Your File Frequently – Often times, a file gets out-of-date and mailers shy away from using it. Let the size of your file and your own mailing schedule dictate the update schedule.
- Business Addresses – If you have a significant quantity of business addresses on your file, consider allowing these records to be selectable. This will make your file attractive to business mailers.
- Fast Turnaround Time - Use a service bureau that can process orders and provide counts quickly and without delay. Sometimes the only determining factor between renting one list over another is how quickly a particular service bureau is able to turnaround the order.
- List Management Company - Use a management company that makes the process of ordering a list as painless as possible. This may sound silly, but some managers seem to hinder business instead of facilitating it. Understanding that proper approval and credit procedures must be in place and carefully followed for the owner’s protection. These policies should not be so overwhelming that they prevent brokers or mailers from considering your list.
- The Approval Process - Create an efficient and quick approval process. Orders often miss cutoff dates because the order is still pending list owner approval. Clearances are often not converted to orders because list owners sometimes take too long to approve. List rental income should never be lost for either of those reasons. Set-up a system where clearances and orders are either approved (or disapproved) in 2-3 business days at the most.
There are a lot of excellent list managers. Find the one that represents the best “fit” for your business. Find the one who knows your market and who is willing to promote your file. List managers employed by firms who have a large brokerage division can also be an advantage. List management/brokerage firms tend to recommend their own properties. But most important, pay attention to the thirteen points above and do you’re part to support your list manager. By working together, you can maximize the amount of list rental income your file can generate for your bottom line.