Conquering Direct Mail

Part 1:Improving attendance through better list management

By Scott Gray

Direct mail is the lifeblood of trade show promotion. According to Trade Show Bureau research, eighty-one percent of show managers use direct mail as their primary means of attracting attendees, with an average expenditure of nearly $56,000.

As popular as direct mail is, it's the medium many show managers love to hate. The mechanics of a successful direct mail promotion can be intimidating, time-consuming and costly.

While trade shows typically attract 38 percent of their attendees through direct mail -- a higher percentage of response than many other industries report -- there is always the distinct possibility that something will go awry once the mailing is dropped in the box. Having the wrong address, for example, will waste even the most dazzling promotion piece.

But direct mail is also the most obvious and natural promotional medium for expositions: Its effectiveness is proven, its costs are relatively low and, like expositions, it's immanently measurable.

Michael Hough, Principal of the A/E/C Systems Show, an exposition for architects, engineers and contractors, adds that if direct mail is the lifeblood of show promotion, then "mail lists are the lifeblood of direct mail."

Transfusions
Mail lists abound. Virtually everyone has a list -- or lists -- tucked away in a desk drawer, filing cabinet, or on a computer disk. But the mere existence of a list doesn't mean it's worth using to promote a show. Contacts move up or on, addresses change, and some prospects will simply never have an interest in attending or exhibiting in a particular exposition.

And, while some producers point with pride to their huge mailing lists, many show producers agree that a lean mailing list can be more effective. The National Association of Home Builders, among others, has found that paring the list can lead to increased efficiency because the cost per sale is reduced.

But even a trim list must continually evolve. Every so often -- the more often the better -- the lifeblood needs a transfusion of fresh names. And the same guidelines apply whether you're developing a new list or updating existing lists.

The first place to look for fresh names is the latest list of your show attendees and exhibitors. These are the very best lists because they are current "live" buyers and, most likely, recent inquiries.

It's almost a given that in-house mail lists will be maintained on a computer. The important point is that the list be easily updated to ensure it remains fresh. It's often easier to identify and eliminate duplicate names if you have control over the maintenance of the list. Duplicates not only add to production and mailing costs, but they present an image of a show manager who overlooks important details.

A/E/C's Hough invested about $40,000 in computer equipment and software for his in-house list maintenance program. While the investment is significant, it allows his staff to keep the list accurate. Plus, it gives A/E/C control and flexibility over the types of lists it produces. For example, Hough can select records from the show data base using very specific criteria.

Outside sources
One of the first places most direct marketers turn for new names is the associations covering their fields. They cite several advantages in using an association's list: It's usually updated at least annually as memberships are renewed; it's industry-specific; it represents the most active and involved members of an industry; it probably contains several movers and shakers; and it can be relatively inexpensive.

Show managers who already work for an association will often turn to "related" associations as well, especially if that organization doesn't produce its own exposition. Exhibitors are the best source for finding these related associations. By determining which associations your exhibitors belong to, you can immediately recognize a membership list as "valid."

But there are disadvantages: Associations generally have only a percentage of an industry's companies or professionals as members; the list may not be available in a variety of formats (on computer diskettes, for example); and it might contain extraneous information.

Many show managers also ask their exhibitors to send them names of clients and prospects they would like invited to the show. If the exhibitor is willing -- they sometimes view this information as proprietary -- these can be good prospects. They have already been at least marginally qualified by the exhibitor and they are likely to be current.

But, again, they may not be readily available in a variety of formats, necessitating the need for extensive data entry.

List brokers
Another option to consider is a direct mail list broker. These brokers specialize in obtaining and/or compiling and renting mail lists. Most issue catalogues that detail hundreds of lists usually indicating the source, the number of records and how current the list is. They may offer discounts for multiple uses of the list. Some even offer a flat rate for rental of the list for a one-year period. Of course, those individuals who attend the show usually find their way to an in-house list and, thus, become the property of the show producer.

Brokered lists are virtually always available in a variety of computer media; diskettes, magnetic tapes, printouts, labels and Rolodex or index cards.

The major advantage of using a list broker, however, is the expert advice many are able to offer. It's likely that, with a little shopping, you can find a broker who has experience in packaging lists for expositions. They can help develop test packages, recommend methods for reaching the right individual and help find new categories for lists.

The better brokers are well-versed in SIC (Standard Industrial Classification) codes. These codes are used on most lists as a means of selecting individuals in the industries relevant to your show. But often, show managers select only one SIC code for their promotions. The list of codes is too intricate and there are too many variables for a general marketer to understand them; the good brokers, however, can be invaluable guides in their use.

But there's a cost to using a broker. First, there is the actual cost of the list. The better the list, the higher the cost. For example, broker Sam Feinstein has a list of more than 8,000 dentists which he rents for a flat fee of $1,000 per use. This translates to a rate of about $125 per thousand, which is high by industry standards. Dental Economics magazine has a list of dentists which it rents for about $20 per thousand. The difference is that Feinstein's list has consistently resulted in 30 percent sales and is a "tested" list.

"It's important," notes Richard Siedlecki, President of Market Direct Advertising, "not to cut corners on list selections or costs. Go with the lists that have the highest probability of pulling for you. Consult with a seasoned list specialist."

Tom Quiner, President of Breakthrough Direct Mail Marketing, Inc., suggests you ask your list broker: What is the source of the list? Is it respondents or compiled? What is the delivery schedule? What are the restrictions on using the list? When was the list last updated? What percentage of delivery is guaranteed?

While brokers usually state that their lists are up to date and offer guarantees, their assurances may not mean much.

In general, you won't get any kind of adjustment for returns unless they exceed 10 percent of the total list. The real problem is that a list which results in a 10 percent or greater return is really performing much worse than that because many companies won't bother to return mail addressed to an employee who's no longer there. The promotion piece may make its way to a replacement, but more likely it gets dumped in the garbage.

The guarantee is usually only for rental and postage costs for undeliverable pieces anyway, so you're still out the printing and handling costs.

But that's not to say rented lists aren't good. Hough, who may mail as many as three-quarters of a million pieces to promote his show, uses them to augment his in-house mailing list of 30,000 names.

Hough points out that "active" lists are much more effective than "passive" or compiled list: "I prefer lists compiled from sources where individuals have paid for a product or service, rather than lists compiled from people who have simply responded to a free offer."

Industry directories, published by a variety of companies, are readily accessible sources for compiled lists. These listings usually contain the name of the individual in a specific job, the company size, type of business and the address and phone number. Some of the specific directories to check are: MacRae's Blue Book, Million Dollar Directory, Who's Who (in your specific field), Chamber of Commerce directories and city and county industrial development directories. These sources however, will require extensive data entry.

Bad names
"Bad" names or addresses are the bane of every direct mailer. It has been estimated that more than 30 percent of all U.S. mail is not properly addressed, leading to delayed delivery, or no delivery at all. To illustrate the problem, Larry Newton, Expositions Manager for Pace Weil and Associates, displays a paperweight made from 2,000 "bad" labels taken off one 8,000-name list. He estimates "we would have wasted $10,000 on postage, printing and handling, had those 2,000 labels been used."

Similarly, Hough sent a correction card to his in-house lists at a cost of about $12,000. Four thousand corrections were returned.

An untested list invariably has some bad names. In the case of a new list, most experts agree it's a good idea to test. One testing method is to select every "nth" name -- that is, every fifth or 10th name, depending upon the list size -- and do a mailing to those individuals. As with any type of sampling, this test will give you an approximate percentage of the number of undeliverable addresses on the list. The "nth" selection is a pseudo-random means of selecting a sample of the list, and is said to work as well as any other type of selection.

Some list brokers will provide you the labels for a sample test of the list you are considering renting; however, it's a good idea to ensure that you are getting a truly representative sampling in order to run a valid test.

In-house mailing lists which have been faithfully updated usually contain far fewer bad names. But a name on an in-house list can "go bad."

First, and most often, the individual name changes. In large corporations, this can be a real problem since they receive large volumes of mail. At best, the piece might be passed along to the person who now holds the job; at worst, it gets thrown in the waste basket. And, if it does reach the right person, there may be a time lag before it's routed.

Another problem is incorrect addresses. Typical mistakes, according to Pitney Bowes, the nation's largest mail equipment company, include: wrong ZIP Code; wrong two-letter state abbreviation; illegible street address; wrong street abbreviations; nonexistent apartment or street numbers; lack of complete street name (for example, not including West or East).

These are problems no in-house list should have. The United States Postal Service offers a free program to correct much of the information on your list (see Direct mail resources). In addition, the service will add the four-digit extension for "ZIP + 4" codes. (Nine-digit ZIP codes can speed mail delivery significantly. )

Show manager Newton also suggests conducting a first class mailing to every name on prospect lists at least once a year. "The cost," he says, "is worthwhile because it's the most efficient means of correcting names and addresses on lists."

For a more personal approach," many companies offer the services of operators who will call to check mailing list information. While this may guarantee a greater response, costs are higher and the time required to complete the poll may be significant.

Although there is no "right" way to manage your mailing list, choosing the system that's best for you will take time, practice and constant attention. It is unfortunately, a job that's never done. But careful planning, an attention to details and help from the right experts can ensure the vitality of your promotion's lifeblood without much sweat and tears.