The Holy Grail of Marketing, Part II: Everything You Always Wanted to Know About Lists and Media Selection but Were Afraid to Ask!

By MaryEllen Tribby

“Any monkey can build a list.”

Yep, I actually said those very words in front of 460 people at a conference I spoke at recently.

I guess I’ve just read too many over-blown promotions for list building on steroids.  You know the ones I’m talking about. The ones touting a “killer system” that can help you build a list of 100,000 names while you sleep.

Sure, anyone can go out and very quickly build a huge list that consists of crappy PPC, CPA, and Co-Reg names. But is that really the kind of business you want? I hope not. Because guess what? It’s not the size of the list that matters, it’s what that list yields on a NET profit basis that matters.

What good will 10,000, 100,000 or even a million names do you if you aren’t making the kind of sales you want?

It’s time to stop looking at quantity and start seeking quality. You can start by realizing that – at the end of the day – you are not building a list, you are building a community!

Every single email address you have represents a real person: a person with a name, a face, and feelings. A person who has real problems. A person who is seeking real solutions to those problems. A person who is searching for help and guidance.

That is why in the “Holy Grail” of marketing, your list – and, with it, your media selection – is the most important part of any advertising campaign.

Selecting the right list and media will have a massive influence on the success of that campaign.

Lumberjacks Don’t Wear Lingerie

There is an old saying in the direct response world: Copy is king.

This saying makes sense from a certain perspective, but it’s misleading to neophytes – dangerously so. That’s because some people interpret this to mean that sales copy is the most important aspect of a marketing campaign.

Sales copy is important. Vitally so. If you put good sales copy in a head-to-head test against mediocre sales copy, you will bring in more money. So it stands to reason that getting good copy should be a top priority for any marketer.

But it shouldn’t be the only priority – or even the first priority.

Finding the right mailing lists and selecting the right media is far and away the first and most important job of the marketer. That’s because of the importance of list selection in determining a mailing’s response rates.

A good list will respond reasonably well to a direct response promotion even if the copy is mediocre and the offer is ordinary.

A bad list, however, won’t be responsive at all – even if both the copy and the offer are terrific.

Whether you select your own lists or have a list broker do it, you must be the person who a) decides what response rates you need and b) determines which of the selected lists and media will meet your targets.

So how do you know if your list and media choices will produce the response you want?

Getting to Know Your List

Accompanying your printout of list and media choices should be a data card. Data cards contain standardized information on all media and lists.

They tell you – among other things – how that particular list was developed, the number of mailing and email addresses available, and the rental price. They will also give you information about what companies have mailed to the list in the past more than once, which can suggest what type of offers that list responds to.

Other information to look for in a list includes:

* Purchase Channel: This tells you whether the list is direct-mail sold, email lead generation, or compiled (i.e., the names were culled from directories). Generally speaking, direct-mail-sold lists and email buyers are more responsive than compiled lists and lead generation lists.

* Average Unit of Sale (AUS): This is very important when selecting your list. If you are selling high-end riding lawn mowers that cost as much as $4,000 or more, you don’t want a list of people who purchased only gardening gloves for $9.95. Instead, look for a list of prospects who just installed a new sprinkler system with an average unit of sale for $5,000.

* Universe Size: This is simply how large the list is. A list’s universe size is an important consideration in making roll-out decisions. If you do not have any other history and you have two lists that seem to be equal in every other respect, you should select the list with the larger universe simply because you have greater roll-out potential (i.e. you can test copy and offers to small segments of the list before mailing the winners to the full list).

Some smaller lists cannot be subdivided. But larger lists can be. Normally, direct mailers take a random selection from the full list to create a test list. (This is called “nth selection.”) But with many larger lists, it is also possible to make other selections based on a number of factors. For example, some lists are selectable by:

* Gender

* Income

* Age

* Homeowners

* College graduates

* State

* Zip code

* Home office

To the neophyte, it might seem that the more selections you make, the better. But parsing out a list doesn’t necessarily make it more responsive. It might make sense to do a gender select if the product you are selling is for women only, but it is unlikely that selecting by education will affect responsiveness.  It could have an effect, but it probably won’t. Also keep in mind that for each select you request, there will be an extra charge.

You will also want to segment your internal list and categorize your external lists.

Not All Lists Are Created Equal

There are basically two kinds of lists that you can market to:

• Your house list
• Outside lists

House Lists

Your house list in the e-marketing world comprises names you have received permission to market to. They can be divided up as follows:

* Hot Leads: People who have opted in to receive e-mails from you but have not yet made a purchase. They have taken the first step by saying they want information from you. The more valuable the information that you supply them for free, the more they trust you, and the sooner you can turn them into buyers.

* Buyers: People who have opted in and have purchased one product from you. Even though they have made their first purchase, you should continue to supply them with valuable free information. The next step is to turn them into multibuyers.

* Multibuyers: People who have opted in and have purchased more than one product from you. You should continue to supply these people with valuable free information as well. Your job at this point is to keep these customers and turn them into advocates for you.

* Cancels and Expires: Former customers who canceled/returned/did not renew a service, product, or subscription they had purchased from you. Because they did not opt out of your free information list, you should continue to provide them with valuable free information as well as your promotional information. Your job is to get these former buyers to become current buyers.

Outside Lists

Outside lists are names that you do not yet have permission to market to. However, the people on these lists have agreed to receive third-party advertising. They can be divided up as follows:

* Hot Prospects: People who have purchased a similar product from your competitor. Let’s say you are selling subscriptions to an e-newsletter on the subject of anti-aging. A hot prospect is someone who has purchased one or more anti-aging e-newsletters from other publishers.

* Good Prospects: People who have purchased a related product from your competitor. Again, let’s say you are selling an anti-aging e-newsletter. A good prospect is someone who has purchased a book or DVD about anti-aging.

* Okay Prospects: People on a compiled list of names taken from directories, newspapers, or public records that have something in common or meet a certain criteria. Many people on compiled lists are not buyers. For our example, they could have simply filled out a survey, stating that they are interested in anti-aging. Don’t make the mistake of using compiled lists simply because they are less expensive to rent.

Many online marketers make a fatal mistake by thinking that in-depth research is only for offline marketing. In fact, if you go through these steps, your online marketing results will soar!

Next Monday, stay tuned for the next installation of The Holy Grail of Marketing, Part III: Copy Is King – The Eight Great Principles of Winning Copy!

If you want to get a head start on mastering the fundamentals of direct response marketing, check out my #1 Amazon.com best-seller, Changing the Channel: 12 Easy Ways to Make Millions for Your Business.