The Art of Selecting Mailing Lists and Profiting in Direct Mail

There’s an art to selecting the right mailing lists for direct mail campaigns. Pick the wrong lists and you can waste thousands of dollars in stamps and printing. Select the right lists and you can earn three or four times what you invested in the mailing. Most companies which use direct mail successfully follow several key steps in selecting their mailing lists and executing their campaigns.

How Mailing Lists are Compiled

Mailing lists companies compile their lists from numerous sources. Some compile names and addresses from various phone directories across the United States. They may also purchase them from telephone companies. Others garner their names from housing records, as these records are kept when people buy homes. Brokers may also compile names of wealthy people, those in certain age groups, specific businesses or professionals, including lawyers and doctors. Similarly, mailing list brokers purchase names from companies who sell certain types of products or services. These companies sell names and addresses of their customers as an additional source of revenue.

Which Type of Lists Should You Buy?

Companies who sell products by mail should purchase mailing lists from brokers which categorize their lists. For example, you would want to buy names and addresses of people who buy health food, vitamins and protein products by mail if you are marketing these types of products. That way you are targeting actual buyers of the types of products you sell.

The second consideration when buying mailing lists is the age of the lists. Most mailing list brokers keep track of the ages of their mailing lists. The ages of the mailing lists may closely correspond to when people actually made their last purchases. Typical age breakouts for mailing lists are: 30 days or less, 61 to 90 days and 90 days and over, for example.

It is extremely important that you purchase the more recent names and addresses for a big mailing. That would include any names that are under 90 days old. Names that are “30 days or less” would be your best bet. But those names will usually cost anywhere from $95 to $150 per 1,000, according to a recent Businessweek.com article. The reason age is important for mailing lists is that 1 percent of them, on average, will become undeliverable after one month, according to the United States Postal Service. Therefore, if you buy 1,000 names that are 60 days old, 20 of them will be undeliverable.

Undeliverable names are called “nixies.” Most mailing list companies will replace nixies or undeliverables–some at a 3 or 5 to 1 ratio. All you need to do is keep the returned envelope as proof. However, keep track of the nixies from various mailing list brokers. Drop mailing list sources which constantly send you high rates of undeliverable names.

Where to Buy Mailing Lists

There are a number of reliable mailing list brokers. One of the largest is the Direct Marketing Association at The-DMA.org. Other mailing list companies include InfoUSA, MacroMark, NextMark and SRDS. You may want to purchase lists from several mailing list companies. That way you don’t base the success of our mailing on any one company.

How Many Names Should I Purchase?

The number of names you purchase is strictly based on your needs. A small independent operator may want to test 1,000 to 3,000 names in her first mailing. Direct mail experts usually recommend mailing at least 5,000 pieces. A mailing of less than 5,000 may be too small of a sample from which to project an average response rate. By the way, average response rates vary by industry and according to what your objectives are for the mailing. Your response rates will be higher if your objective is to just garner leads. It will be less if you are asking for an order. The important thing is that you earn a profit from your mailing.

Building a Successful Mailing Campaign with Lists

You need to constantly test your mailing lists to determine which ones earn you a profit. The best way to test mailing lists is by inserting codes on the order forms. For example, you may use the code “SRDS 215” for a 3,000-piece mailing of SRDS names and addresses. The 215 would represent a mailing you sent out on February 15. Simply count the number of orders from that particular mailing. Add up your revenue, and then subtract your mailing expenses. Mailing expenses include postage, printing, envelopes and the mailing list itself.

Pyramid your profits. Purchase 10,000 mailing list names and send them out if the 5,000-piece mailing was profitable. Work your way up to 20,000, 50,000 and even 100,000 mailings per month. That’s how to select mailing lists and earn huge profits in direct mail. Drop mailing lists that are unprofitable. Try mailing lists from new sources.