The flat economy may turn out to be the least of the problems faced by business-to-business mailers.
Another one is a lack of good lists. And that is largely caused by firms failing to reciprocate on list rentals.
“It’s a potential cancer in our industry,” said H.L. DeVore of Prudent Publishing, speaking at the Direct Media Mailers’ Conference & Co-op in White Plains, NY.
He argued that the availability of good response files is threatened by ill-considered privacy concerns and cautious bureaucracy. He singled out Pitney Bowes.
The business is based on “reciprocity of list rental under the same conditions, ” he continued. Too much rental without reciprocity.
“Sorry, but you’ve been cut off, Pitney Bowes,” he said.
Eric Snyder, senior vice president of marketing at Skillpath, agreed that lists and prospecting are important. “Try to get lists you didn’t have access to,” he said. “And I would encourage Direct Media to bring new lists to market.”
Of course, that may sound contradictory, given that most b-to-b mailers are relying more heavily on their house files.
For example, sales are down around 30% in the b-to-b seminar field. This has been caused by a combination of layoffs and a reluctance to travel by air.
Skillpath has avoided the latter because most of its seminars are local. In addition, it is more diversified than high-tech seminar producers that have been particularly hard hit.
But it has seen response rate declines.
How big? Snyder said that, “15% to 20% is a good number across the board. House and outside files are down equally, with prospecting down slightly more.”
The good news is that Skillpath has seen “a slight uptick–not great.” And it is spending more money on prospecting.
“There are not too many bright spots out there,” Snyder said. “But then again, there were few bright spots when we started in 1989.”
Publishers are also feeling the heat. Harvard Business Review Publishing has had to meet its goals with reduced marketing dollars, said Paul Szymanski, consumer marketing manager for the publisher. It has also “replaced all its controls, and cut mail volume to “get the bottom guys off,” he said.
But Szymanski is far from despairing. For one thing, Harvard Business Review will rely more on non-subscription revenue because “it can pull you through times when circulation revenue is down. And it is experimenting with e-marketing.
Does this mean that direct mail is drying up as a medium?
No way.
“There’s no real contender to replace direct mail–it’s the workhorse of the industry,” said DeVore. “And I think the answer will be the same in two years.”
Szymanski added that e-mail produces great return on investment, and that firms can use its supplement land-mail programs when lists aren’t performing.
Just how often should a customer be contacted? Snyder observed that with 20,000 seminars to offer in that time frame, he can “hit a customer 70 times a year.”
Szymanski countered, “I can’t imagine making a subscription offer 30 times a year. We might end up behind bars.”
Whatever the limit, there are tools for cutting down wasteful mail volume.
National Business Furniture improved its performance by modeling. “We started with 1994 customers,” said George Mosher, president of the office furniture cataloger. “We found that four out of seven bought in ’94, and never bought again. But 2% have bought every year since ’94. They’re paying for my kids’ college education.”
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