132: 4 Common Mistakes of In-house Mailing Lists
Years ago now, an auctioneer told me that I was too expensive for him to consider as a graphic design vendor for his auction brochures. He told me this after bragging that his direct mail list held 70,000 recipients. His marketing budgets didn’t have any money left for me, because he was spending tens of thousands on dollars on postage alone per auction.
I asked him how many people came to his auctions. His answer came in around 500 to 700 registered bidders on average. “You’re mailing to too many people,” I told him.
I don’t remember this auctioneer’s name or company off the top of my head, but I’ve bumped into multiple auction companies that tout their decades-old prospect list or the quantity of people on their in-house list. It’s an odd boast, since those lists are filled with budget-sucking ghosts. The age of a list isn’t inherently bad, but it can contribute to the following four issues most auctioneers face with their in-house database.
Not Connected to Auction Participation
How many of the people on your mailing list regularly attend your auctions? How many of them have registered to bid in the past eighteen months? How many of them have purchased something in the last year? If you can’t answer these questions, there’s a good chance that you’re mailing unwanted advertising to satiated buyers. They may have been bidders or even buyers in the past, but that doesn’t mean they are now.
Most auction clerking software allows you to query purchase information so that you can compare it with (or export it to) a mailing list. Some even allow you to query for spend levels to weed out the tire kickers. For real estate auctions that often don’t run through such software, it’s relatively easy to keep a spreadsheet of registered bidders and buyers.
The hottest list you should have in your database are back-up bidders, because they didn’t get what they came to buy.
Not Segmented for Asset
Unless you’re operating on a robust database system that can be queried via various criteria, you will need to maintain multiple mailing lists. If you have one list for all asset categories, a large portion of your list is wasting you and your sellers valuable budget space. Even within general categories like real estate, equipment, estates, and agriculture, you need to have multiple subcategories—unless you operate only in one subcategory. The more segmented your list, the more efficient it will be.
If you’ve got an old list that you’d like to segment, you can mail a postage-paid piece to your old list and ask for recipients to mark what categories of auctions interest them (and whether they prefer direct mail or email). That can get expensive, and it’s reliant on the recipient basically asking for more mail. It’s much more reliable to research auction bidder registrations from auctions of known assets and categorize your records accordingly. That’s also a good way to see if they’re active bidders, anyway.
Too Dependent on Investors
One way auctioneers defend the age of their list is by categorizing the names on it as investors. These are the dealers, flippers, developers, or portfolio builders who know that auctions bring them revenue potential. Investors bring a beneficial floor to the bidding—the wholesale price. They get the “SOLD!” rider on many, many auction signs. In most cases, though, we’re trying to get our sellers retail prices. For those, we need end users; and end users are a moving target.
It’s a lot easier to find end users in other media, particularly social media and search advertising. That said, you can also buy inexpensive mailing lists of like-kind owners sorted by demographic criteria or trade categories to supplement your investor database. Many of those lists allow indefinite usage; and comparing your bidder lists to those purchased lists will help you pluck both investors and end-users to be grafted into your in-house lists.
Not Updated with USPS CASS Certification Reports
Most, if not all, mail houses now use the Coding Accuracy Support System to presort your mailing list. This kicks out undeliverable addresses before you have to pay postage for them, and it garners significant first class postage discounts. It also updates addresses according to the USPS’ most recent database of addresses, especially helpful when prospects move. That software can generate reports to tell you which addresses failed and why. My preferred print shop gives these reports to my clients at no additional charge, so that they can update their records.
Direct mail often has high response rates as a percentage, but that doesn’t make it cheap. Don’t waste advertising dollars on vanity advertising, when you could use it on efficient marketing.
Stock image purchased from iStockPhoto.com