A buyer's guide to data lists
 
Direct marketing, whether you choose direct mail, email marketing, telephone marketing, SMS broadcasting or even fax marketing, requires a targeted and accurate marketing list to ensure a successful campaign. Unlike traditional advertising, direct marketing offers an effective and measurable method to reach a targeted audience based on specific criteria.
 
There are hundreds of list managers and list brokers, all claiming to sell the best data. So where do you start?
 
  • List brokers are usually independent companies, not restricted to selling lists from a specific list owner.  They generally have a good understanding of list sources however they are simply resellers (middlemen) earning a commission for recommending a list and they have little control over the accuracy or relevance of the data.
  • List managers represent lists owned by mail-order companies, publishers and other third party business looking to monetize their own customer data.  List managers are often restricted to selling the lists they represent and although they can be a good source of niche lists, they don’t generally offer whole-of-market representation.
  • List owners are the source of data, the company responsible for compiling, updating and managing a database to ensure that it is correctly prepared for marketing. 
  • This Buyers Guide will help you understand how a list supplier works, a guide to pricing and how you can make ensure that youre getting a genuine mailing list from a reliable source. 
 
Response lists vs. compiled lists
 
  • List brokers rent lists from list owners. Some owners, like Maximum Impact Marketing, manage huge databases of information for tens of millions of consumers and businesses. These "compiled list" databases are populated with information collected from various sources such as Government registers, directories, credit bureaus, annual reports and third party contributors.
  • Other lists are more targeted, containing detailed information from people who have either enquired about a particular product or service, or permitted companies to contact them. These "response lists" (sometimes called behavioural, transactional or lifestyle lists) can range from people who subscribe to a specific magazine, made and online transaction or simply people who have and returned a product warranty card or survey.
  • Recency is a term meaning how recent the data was compiled or when it was last validated. List suppliers cannot guarantee how responsive a mailing list will be, as there are many other factors that dictate a response rate, however the "typical deliverability" (the percentage of mailers that reach their intended recipient) should be quoted/guaranteed.
  • As a list owner, we constantly refresh and verify our database to remove inaccurate records and to add and update new information. The typical industry accuracy rate is around 92% and list suppliers should offer a guarantee to replace any goneaways over and above 8%.  However we guarantee 100% of our data and will offer to replace any returns that you receive from your direct mail campaign.  No list will be100% accurate as circumstances change on a daily basis and we quote a typical "goneaway" rate of 3-5%.
 
Selecting the right data for your campaign, list suppliers should be able to tailor a list based on the product/service you are offering and the target audience that you are trying to reach.
 
There are 2 distinct methods of targeting data;
 
  • Profiled Data - Profiled data is a general method of identifying consumer data records based on their geographical and social profiles. Many companies have sophisticated software programs to identify households based on their demographic wealth, life stage and household composition.  Profiles for each households are ‘presumed’ according to results from the 2001 UK Census and many other contributory factors.
  • Lifestyle Data - This data is based on facts and is compiled from direct response, behaviour, financial & retail transactions, share registers, directorship registers, research, consumer surveys, credit history and more. This is a much more targeted option however the factual element of this data is more costly to achieve and therefore the price of true Lifestyle Data is higher than Profiled Data.
 
It is very important that you establish if the list supplier is offering profiled data or true lifestyle data when comparing different data sources.
 
The same methods of targeting applies to B2B lists and B2C lists.  A supplier specialising in highly targeted Lifestyle Data will not be able to compete against a supplier selling profiled data.  It’s not uncommon for some data companies to sell data without telling the buyer whether it is profiled or the genuine article, this results in the customer getting something less than they expected.
 
We sell Lifestyle and Profiled lists and we will always explain at the time of your enquiry, what type of data we are quoting on.
 
List Seeding
 
  • Mailing lists are sold on a rental basis and usually remain the property of the list owners. Typically, you will agree a rental period with the seller, this is usually a single use license or a 12-months multiple use license, although often we can offer a bespoke license based on a specified number of uses or even an outright purchase agreement.
  • Lists owners plant seeds within each list and use an independent 3rd party to track how many times an advertiser uses the database.  If the list is used outside of the license agreement, the seeding company will notify the list owner who will usually seek recompense for the unauthorised uses.
Choosing a mailing list company 
 
Our best advice is to do your homework on all of your suppliers because buying a data list is often a substantial purchase. There are many data sellers in the market selling substandard, old, inaccurate and sometimes illegal lists and, unfortunately buyers usually find this out the hard way.
 
There’s no way on telling how clean a list is until you use it so base your buying decisions on reputation, longevity and accreditation. A few questions you might want to consider finding the answer to:
 
  • How long has the company been trading
  • Have they recently changed company name
  • Do they have CCJ’s or winding up orders against them
  • Is their registered address a real commercial property
  • Are they members of the Direct Marketing Association?
  • Are the registered with the Data Protection Act
  • Is the database their own or are they resellers?
  • What guarantees do they offer
  • Can you speak/contact a real client that’s willing to give a testimonial?
 
Mailing list pricing 
 
Standard compiled mailing list pricing is based on a cost per thousand (CPM). The typical CPM is £100 for consumer records and £140 for business records for single use. In most cases fees will be added to the rate depending on what selections you have made to define your list. Most list brokers/managers have a minimum order charge of £500-£1000
 
  • Lifestyle, Behavioural and Researched lists command premium prices, usually upwards of £150 per 1000 for base rental, plus selection fees.
  • For quality e-mail lists, the typical minimum order size 5,000 names. The average cost for e-mail lists is a CPM of £150-£250 and usually includes the broadcast fee. Managed campaigns usually have a set-up and production fee of approx £100.
An output / production fee usually applies to each data list order; we charge a flat fee of £40. This is for the selection, extraction and production of your mailing list in your preferred format. 
 
Mailing list success rates
 
It is impossible to quote a standard response rate as every campaign has its own set of variables and merits.  A direct mail list of 5,000 names selling a retail product may see a return of 1% - 3%, this would be considered a solid performance. Email success rates are considerably lower and in some markets such as financial services a 0.1% is considered a success.
However, you should understand that there are no guarantees about the amount of business you can generate.
 
  • The success of your campaign will depend on the quality of the list as well as the effectiveness of your marketing collateral and strategy. Success should not be measured on initial response or campaign ROI, in most cases you should also consider lifetime value of each customer and your client retention. 
  • For example if a charity recruits 100 new supporters that donate an average of £10, the initial response is £1000 gross, less the costs of the marketing campaign.  This is your ROI and often this is a negative figure.  But if the charity typically retains 80% of thier new supporters and each new supporter donates on average £50 per year.  Then the projected return of the marketing campaign is actually £4000 gross.
 Marketing is not usually a short-term quick fix and should be viewed as a strategic approach to new customer acquisition. It then becomes your responsibility to manage the client relationships to maximise the full potential of each new customer.
 
Top tips for buying mailing lists
 
  • Beware of faux bargains.
 A "bargain" list may be cheap to buy, but may cost your company more in the long run with poor response rates and wasted time and materials. Do a thorough review of your mailing list suppliers before choosing one. If it sounds too good to be true, it usually is.
  • Run sample mailings. 
Send samples of your mailing to different subsets of the list, analyse the response, then send the most effective version to the rest of the list. The right creative content and marketing strategy plays a big part in the success of your campaign, the mailing list is just one of many elements.
  • Plan ahead.
 If you're expecting to purchase a mailing list, have a plan of action in place before you get it. If you have the general makeup for the deliverables, your timeline, and your delivery method, youll be well prepared to put the list to work for you immediately.  Don’t let the list sit around and depreciate.
  • Don't be seedy! Only use the list in accordance with the license agreement. Data suppliers will monitor how many times you use the list with "seeds” and will charge you again for unauthorised uses of the data.
  • Whiter than white. 
Make sure email address lists are opt-in for 3rd party marketing and collected in accordance with current policy. Check that your email broadcasting platform is white-listed.  If 50% of your email messages get blocked by spam filters you’ll find it very hard to return a profit on your investment.