What makes a list "marketable?" (or, when is a list NOT a list) (9)
What makes a list "marketable?" (or, when is a list NOT a list)
There was a recent, closed thread regarding an individual acquiring by hook or by crook a list of 9,000 employee names and wanting to know how to market to it.
That thread is an excellent opportunity for me to make some very, very important points about what a “list” actually is and what makes distance/leveraged marketing work to it. Not understanding what a “marketable list” is, is a good way to go very broke, very fast in direct marketing even if that list was acquired by the holiest, most moral, most ethical of means.
The 9,000 names described by OP and the alumni names described in another post are just lists, they are not “marketable lists” (setting how they were acquired aside) because of their low level of commonality, i.e. the 9,000 people just work for a company, and the alumni simply went to the same school (with proper data matching and profiling, these may be useful to the school as a future donors list, but that’s about it).
That’s as useful to a marketer as names from the phone book, a “list” that still shows up free on my doorstep once a year. All those people have in common is they have a phone. If you were to send direct mail to them you’d get hammered, and same thing if you had their email addresses—virtually no response.
What makes leveraged marketing work is the commonality of interest. emotion and behaviors within that list. That’s what allows you to write a sales message to the entire list that each individual person receives and says, “wow, that’s for me.” The tighter the interest of the list, the more commonalities they have, and the more emotions they share, the better their response will be. That’s why it’s very hard to make a pitch work to general audiences and much easier to make one work to niches.
I got into direct marketing by discovering the old Jeff Paul/Dan Kennedy $4,000 a Day In Your Underwear System that taught how to do niche marketing. You’d run lead generation ads in trade magazines targeting specific niches (Chiropractors, Dentists, Carpet Cleaners, Certified Financial Planners, etc.) that flagged their biggest pain, and offered them a free report (a sales letter) that promised to relieve that pain. Each sales letter used the specific jargon, pain points, and beliefs common to the list they were being sent to, and as a result, you’d see response rates over a three step direct mail sequence of up to 12% for a marketing kit that went for around $697.00.
The reason for the astronomical response rates was because of what each member of the list shared in common—they were all in the same industry, all had massive pain, all wanted relief from the same emotional trauma and when they received the pitch, it was literally the answer to their prayers. But if you mailed the Carpet Cleaner letter to the Chiros, and the Chiro letter to the Carpet Cleaners, you’d zero EVEN though each letter was technically the same letter offering the same exact marketing kit (modified for each niche). It was the specific jargon and pain points of each letter that made the list respond, because it was perfectly matched to the emotional needs, wants and fears of the list.
Some quick math to illustrate: 1,000 leads at 12% response is 120 sales x $697 = $83,650 (gross), allowing profit on the first sale and the acquisition of the holy grail of lists…a house list of buyers of expensive products that like you and love to spend a lot of money with you. Many of these buyers went on to happily attend $3,000 bootcamps, $15,000 masterminds, etc. so that niche marketers with lists of say 3,000 to 4,000 names were taking home net profit in the low 7 figures every year (some of them are still going strong, i.e. Joe Polish).
On the flip side of that, you can acquire a “list” very inexpensively—just go to:
http://www.melissadata.com/dm/mailin.../consumers.htm
…and look at all the selects and all the targeting. You can put in your credit card and within minutes have in your hands a highly demographically targeted list of consumers for relatively cheap. BUT, they are not direct response buyers. They are good for Realtors, say, who want to farm an area over time with postcard mailings (done properly, which they never do, it can be highly effective) but they are no good for the distance marketer who sells via one to many media. They have little commonality of interest, emotion or behavior, so it is virtually impossible to craft a profitable pitch to a compiled list like that.
I will share a personally painful story about that. Way back in 2008 I was mailing a lot of 6” x 11” ugly yellow postcards to generate leads for my dating course. I had (still have) a good list broker, and we mailed the male names of recent buyers of products related to them being interested in women. My initial response rate was 8% (leads, not sales…about 6% of the leads converted to a $450 transaction value sale which was quite profitable), and then over time, it settled out to about 3%. So, I knew the postcard worked to the right lists, and we even got it to work to some Biz Opp lists based on the fact that they were buyers of information products and just liked to buy stuff through the mail (commonality of behavior).
Then I discovered there were entire companies devoted to “list enhancement.” That’s where you send them your customer list, they run it through their database of hundreds of data points and return a file that shows you where your best customers are coming from. You use it by then renting a cold list, running the cold list through that service and ONLY mailing to those names that match up with your customer list’s data points. So, if you can throw away 35% of the names with a low probability of response and mail to the 65% that are left (knowing the buyers are likely clustered in this 65%), you can turn a break even list into a dead bang winner and minor losers into minor winners. It’s the “secret sauce” big direct mail operators use to mail millions (by avoiding mailing to names with low probability of response).
Well, it turns out you can also rent compiled names by these very same demographic selects, and I knew if I could make that list work, I could mail in the millions. So, I rented a list based on those selects of only single guys who lived in certain area codes, made $70,000 and above, etc. (they matched my customer profile) and mailed my proven postcard to 5,000 test names (in violation of my rule to mail 2,000 and see if there’s a response before mailing the rest).
The results?
11 leads. Not sales, leads. 11 leads out of 5,000 perfectly demographically targeted names to a postcard that was proven to average 3% when mailed to response lists (lists of recent buyers of a related product). And I should have known it would happen. Hell, if ALL 11 leads bought, I’d still have been in the hole (as a final “fuck you,” one of them actually spend $111 with me, so technically I didn’t zero).
The problem was there was commonality in demographics, but not in behavior, emotion, or pain. Hell, they may have been perfectly happy being single. They may have had girlfriends. Or they may just not be into reading and learning about attraction. There was no indicator of interest or pain on their part, just names with similar demographics. They were a list all right, but not a “marketable list.”
Every great copywriter will readily admit that “it’s not the copy, it’s the list,” and that’s why you have to understand exactly what a list is, regardless of how it’s acquired. It’s a group of people with similar behavior, interests, emotions, and pain who have been proven to respond to distance marketing. You can rent such lists, or you can build your own via lead generation (magazine ads, banners, emails to other people’s lists, and all other kinds of ads designed to generate a response) but you have to understand what makes a list a truly marketable list—people with commonality of behavior, interests, emotions, and pain who have been proven to respond to distance marketing. Master that, and you will be well on your way to a long and profitable career in direct marketing. And you will avoid a lot of heartache and loss by avoiding lists that are not marketable lists.
Oh, and I will be London at the STM meetup (speaking about email and email lists) so if you want to know more about lists then, I’m happy to talk to you about them until I am hoarse…just find me there.
wish i'd attended STM london.. *sigh*
Originally Posted by taewoo
Originally Posted by cmdeal
Perhaps for STM 2016 we set some sort of 'scholarship fund' based on who contributes the most content, insights, effort, or combination of the three.
One of the best skills I ever learned was spending money I didn't have to get information I knew I needed. In 1998, I was so broke I was living in the office space of a warehouse with no shower and no hot water, determined to learn direct marketing when I got a pitch for Dan Kennedy's 1998 Superconference that cost $1800 to attend not counting airfare or hotel. I knew I needed the information presented there, and I knew i needed the contacts so I "found" the money and because I had to maximize the value while I was there, I got the information that led to me shortly grossing $200k and met people who are still friends to this day. Haven't missed an event since then no matter my financial situation. Everyone has to make their own decisions and determine how serious they are about learning direct response marketing, of course, but it's been my experience that those who have a long and profitable career have fully developed the skill of "spending money they don't have to get information/contacts they know they need."
Originally Posted by johna5150
Amazing, so if you have a list that are people that where part of a dating site or forum would that be considered commonality/shared interest and would you market products that associate to that common interest?
Originally Posted by buck johnson
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