Here are a few hard realities to swallow. It’s not 2001 anymore. It’s 2009 and it ain’t a pretty economic time. And, it surely ain’t a good time to try and rent lists at 2001’s inflated prices.
This fact can represent either a challenge or an opportunity to the list industry. Companies that stubbornly hang on to their high price high horses will face a challenge. But those that choose to cut their pricing and build long-term partnerships with clients will find opportunity moving forward.
Creativity in presenting new ideas and new list alternatives is key. We are no longer in the business of selling, but rather consulting. It has now become the job of everyone in direct marketing to guide clients through the panic of budget cuts with level headed thinking and practical pricing.
But what does it take to get on a list pricing fitness regime, and take the huge step away from greed and towards smart long-term planning?
As list professionals involved in both managed properties as well as compiled data, it is our job to set the standard for our industry. Right now, our clients just don’t have a lot of money to spend. This means there has to be a push towards affordable list pricing.
When an advertiser comes to you with a low budget you can either turn away the business because you can’t make it work, or you can offer them an innovative and affordable solution. Try it. They’ll love you. They’ll come back.
And, here’s the key—they’ll remember you when the market turns back and funds are replenished.
Especially in a down economy it is understandable that list management clients will request higher prices to drive ancillary revenues. This is especially true of subscriber lists from print books that are either hanging on by a thread or are already out of circulation due to their own reduced advertising.
But charging the high $200 and $300 per thousand rental rates commanded in years past will not net them the revenues they’re seeking. If anything, it will leave them on the outside looking in. In today’s economy there just isn’t a place for overpriced lists. There just isn’t. So, it’s our job to advise these clients that lowering their list pricing will actually attract more rentals and more revenue.
As Lord and Taylor has already found out, sometimes it just pays to be Target.
Do we need to give away the farm? No. But, we do need to take a realistic look at profit margins. In this marketplace, bumping a net list cost 30% is acceptable. Bumping it more than 100% is not. Sorry. Right now if you want to keep that client and keep your doors open you need to step across the court and see things from the client’s perspective.
When word gets out as to which companies are actually bending over backwards to help their clients—which it will—those companies will reap the rewards of a larger client database.
In a nutshell, we can either go down with the marketplace or we can put our sails to the wind and ride it out with an eye on the future horizon. Where we all wind up this time next year really depends on whether we stubbornly hang on to the past or let go and move into the future.
We ain’t in Kansas anymore and it’s time to start marking down and re-stylin’ the ruby slippers.
Carol Lustig is marketing director at 1Touch Marketing based in Boca Raton, FL.
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