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The spirit of this year's Direct List Roundtable was decidedly one of camaraderie. While the conversation was lively, the participants — all list brokers — agreed on many points, including the fact that in today's challenging business environment, mailers are looking to their list brokers not only for names but marketing expertise as well.

Bob Castle moderated the discussion, which touched upon the fact that the mailing list industry is sorely in need of better automation. Why, the brokers wondered, were they still wading through mounds of paper when there had to be a better way? Toward that end, the List Leaders' locked rate pricing initiative — a proposed streamlining of the order process — was pondered.

Whether or not the quality of names is declining and why also was a point of discussion, as was whether mailers really understand the role of list brokers and all they do for their clients. And the matter of broker/manager relationships and whether service from list managers is declining was a hot topic, too. As one participant noted, you need to know which managers will ensure your order is processed correctly, and the ones you need to watch.

CASTLE: Let's start with a simple question: How's business?

DUGGAN-JOSEPHS: The year started out very slow. Business was slow, and our client's business was slower, so we didn't have great hopes for the second half. But it seems like mailers have come back to life and realized if they don't mail, they're out of business. So we are now very, very busy. One of the other gauges I use is talking to printers. They know before we do what's going on, and they're all pretty well booked for this season.

SCHLOTMAN: We are actually up about 15% so far this year. People are mailing more cautiously, but we're definitely seeing an uptick.

ROBERTSON: I think about the same. Mailers are cautiously optimistic about the second half [of the year] and I think if we have a good, stable 2003 we can build on that for 2004.

HEANEY: It's actually been fun to be on the road again in the last six months, to be in clients' offices, because they're more confident, they're getting more money from senior management to invest. The mix I work is consumer publishing. After the last two years, where everybody tried to find alternatives outside of the mail, they're realizing they've got to be in the mail to grow their business.

MAYLANDER: Our mailers have been mailing conservatively. We found their responses were very soft in January and February and the spring campaigns have come back to life. As people plan their budgets for the fall they're [looking] to mail pretty aggressively if things hold true to the spring results.

MALC: I think some of our clients got hit pretty badly [last year], and everyone was very nervous about how to go back from that. Early 2003 had some hiccups, but now it's definitely on an upswing, which is great.

BISSIG: It seemed like there were a couple of bright spots in the spring and all of a sudden a weakness came in, whether it was the war or something else. But since that time its progressively gotten better. And based on all the projections, our clients are feeling pretty good about what they're seeing now and getting ready to move ahead.

ROBERTS: Consumer is doing fairly well. BTB has been knocked around a bit, specifically the high- tech market for the last few years. But I think those markets have rebounded substantially in the last six months, because of a move back into technology. And next year will be decidedly better.

HUNTOON: It's just very hard work right now. It's hard for the mailers, it's hard for us. It's hard to find the piece, it's hard to find the list. But I'm very optimistic. I think that there's a feeling the worst is over, we've finally got out but we still have a lot to pay attention to. I don't think its going to get a lot easier very soon, but I definitely think we're on the upswing.

CASTLE: Are you getting your new business from new mailers in the field or from mailers who are changing brokers?

DUGGAN-JOSEPHS: I would say we're definitely getting new clients from competitors more so. I mean, think about who's really been new and large in the last few years.

HUNTOON: That's the key, new and large. We do get new [clients] but they're tiny and it takes forever, and again, that's another aspect of how hard it is. We know they're working on venture capital with no staff and we have to take really good care of them. They won't amount to enough business to pay for that really good care for five years if we're both very good and very lucky.

BISSIG: And they're still looking at the information they've gotten three, four, five years ago. And they're making all their plans on 2% and all these great numbers. And then you get down to reality with them and they sort of stop, there's a long pause in their conversation.

DUGGAN-JOSEPHS: That's the hard part, telling them not to go in the mail.

ROBERTS: What's really cool about our industry is we're able to work with small companies that are just incubating, develop a relationship with them, build their business with them, and have a lifetime relationship. Our challenge is to get more marketers in the mail, get more companies using direct marketing, to develop their own ideas.

HEANEY: I think one of the best signs we're seeing is people who have been out of the mail for a year or year and a half coming back in a big way. They're not just getting a little bit of direct mail out, they're going back to the levels they were at 18 months, two years ago. They're putting big numbers out in the mail. All the alternative sources and partnerships [were] not sustainable. They had to get back in the mail, and that's a great sign.

CASTLE: Do you feel that budgets shifted away from other areas and back to direct mail?

HEANEY: Again, I'm speaking in the niche I work in, publishing. Absolutely. They got out of the mail and they got into more cost-effective partnership efforts. Anything but direct mail was kind of the theme in the last two years. In the last six months, that's changed.

DUGGAN-JOSEPHS: We've got a couple of clients like that also. They decided to stick to retail and Internet. And now the bells went off and they're saying, ‘You know, we had that catalog, and it was driving business then. We need to drive the Web sales, so let's get back out there.’

MAYLANDER: What's been exciting is now we're looking again at alternative media and strategic planning issues with clients, saying, ‘OK, what can we do for a customer retention program and how can we talk with more clients and then spin that off into more of a prospecting mail piece?’ We're touching on things that we weren't really involved with when times were good.

ROBERTSON: Now clients are spending a lot more time focused and have a more measured approach in what they're trying to do. And that's what we do. That's our business.

DUGGAN-JOSEPHS: It's more of a combination now. So many of the mailers have downsized and just don't have the staff. What's good for us is that they're finally recognizing that brokers are true marketing professionals. They don't just herd data cards and names and addresses around. We've got this experience and we can really be a marketing partner.

HUNTOON: And we like to do it. We'd much rather be a partner and do the fun stuff than throw the old data cards around. The thing that's most likely to drive people back into the mail is the fact that their house files are so fatigued.

SCHLOTMAN: Many of our clients are asking us to come in and help market with their house file mailings. This is a whole other dimension where we haven't been as involved. As their situations got more and more desperate they're asking us to put our best marketing foot forward and help them understand as much as they can about who their customers are.

CASTLE: Thanks to online marketing and e-mail, do you feel there's been a change in quality of many of the lists you use?

DUGGAN-JOSEPHS: I think a lot of mailers are seeing results on their core lists fall off, but all they're looking at is the direct/catalog results. Clients' biggest issue is getting information and tying it to people who use it. There's only a couple of companies that have any kind of a program available for catalogers to actually give the credit for the Internet sales to the mailing, and it's a huge problem.

SCHLOTMAN: It's not really a seamless infrastructure yet for many mailers.

BISSIG: When I started in the business at a mailer, Chadwick's, I remember [the start of] 800 numbers. That was going to kill everything. And the reporting in the beginning was, everything was mail, and you read that. Phone threw your curve off, and you had to get smart to realize you had to put phone and mail together. We're there again. We've got this new medium called the Internet and we have to figure out how to integrate it.

ROBERTS: I don't think [any falloff in list] quality is necessarily due to the Internet. The quality of the list is really a result of the quantity of renewals being done via telephone on publications. If you segment and then look at the response rates for a one- year qualified written request vs. a three-year telephone renewal, I assure you the personal written request is going to outperform.

HUNTOON: I think the lists are different now, and they need to be used differently. I don't know that they're necessarily bad. I just think we haven't figured out how to make what they are now work, whether it's changing an offer or the way we segment the file. Files are different now than 10 years ago, because of the Internet, because of the publishing situation.

HEANEY: The real challenge is for the folks who represent the new lists on the market to explain how their lists are compiled. We're finally seeing new lists on the market, which is great. But when you call to find out what that list is about, how it's comprised, nobody has a clue.

CASTLE: That's really the next question. Are you getting information on how the list is comprised?

HEANEY: Sketchy information.

HUNTOON: The scary thing is that the list owner frequently doesn't know, so he can't tell the manager. So we get frustrated with the manager and the poor manager is trying to do the best he can, but the list owner hasn't figured it out yet. All [the list owner] knows is that he's got some names there and he needs to use them and make some money with them.

ROBERTS: I'm also concerned in the marketplace that list managers don't give updates on a regular basis. We need to educate the manager that's its very important when we mail to get the most recent names.

MAYLANDER: As fundraisers have become more premium-driven, the lists are working differently for us. We try to seed our names on as many lists as we can possibly get so we can say, ‘Oh, this fundraiser is now giving away a teddy bear. Now this list might not parallel what our offer is, and that's why our response is dropping off,’ or the gift is lower than we anticipated. We're trying to track that, but it's a big job.

BISSIG: On the consumer end, one of the things that's happened over the last eight to 12 months is people are buying back a lot of their customers. They're going deeper into their house file with promotions, free shipping, dollars off. They bought back old buyers that are not performing as well, so the house file isn't working.

ROBERTSON: Part of what we have to do just as an industry is make sure if we bring someone in on the Web, that we talk to them that way. The customer will identify the channel. I don't think as a marketing industry we do that. We bring them in on the Web, and then we send them a catalog. We don't understand why that doesn't work, so we challenge the quality of the name. And really, it's still a buyer. We're just not talking to them well.

HUNTOON: Exactly right. It's not a quality issue, it's a marketing issue to find the best way to make that name work. We dealt with direct response television years ago. I was back working with sweeps mailers and we'd go, ‘Oh my God, look at this wonderful hotline, it's going to be gangbusters.’ But to a mailed offer it doesn't sell like gangbusters. So it's just a matter of finding the right connection between the list and the offer.

CASTLE: I know from my own experience that brokers generally spend with clients on the phone, they handicap lists, they do list marketing, they make recommendations, do list negotiations and supervise processing list orders. Has that mix changed for you over the last few months?

HEANEY: Hardcore analysis is always such a large part of our job. Just really crunching numbers and making sure you're mining every possible name out of a strong list. I think our clients ask for a lot more a lot more frequently. It's not just when a campaign is about to get in the mail, it's the first time they've got results out of the gate. It's well in advance of a major fall campaign. I think [contact] is more frequent and it's more intense.

CASTLE: That's terrifically exciting.

MALC: That's true. I think they feel if they're giving us all this information they really want that counsel back.

DUGGAN-JOSEPHS: It used to be like pulling teeth to get updates, and now they can't e-mail you the results quickly enough.

ROBERTSON: [Because] of that too, we are probably spending a lot more time together. We know the detail more, so the negotiation takes a little bit more time than it used to.

CASTLE: This puts a great deal more pressure on you, because as with most other companies, brokerage and management houses have suffered over the last couple of years.

HUNTOON: The automation of some of the day-to-day aspects of our business is far behind what it needs to be. I still go through orders [manually] and make sure they're exactly right. I don't think that should be part of what the broker/management service bureau process should be. I think some of it should be automated. There should be automation that can be adjusted and modified, your number can go on it, his number can go on it, but the data shouldn't have to be rekeyed every single time in every single place.

CASTLE: Do you think that there should be a standard order form?

ROBERTSON: Well, we've been talking about that for how many years? It just seems unlikely that that's going to happen. It seems like we should be using the technology, but I don't think we're all willing to standardize our forms. I think in a perfect world that would be great.

ROBERTS: I think someday it will happen. The question is when we're going get to sit down together and find an organization that's willing to do it and figure out a test strategy that works.

ROBERTSON: It's tough to do that. Our systems need to be able to talk to each other, rather than everyone having to redesign how they're inputting data.

HUNTOON: I'm going to digress a bit. The List Leaders, with the support of the DMA, are trying to get something done we're calling ‘locked-name arrangement,’ which is simply inserting a little paragraph on the bottom of the order that says an order has been placed as a locked-name order. No additional adjustments will be made to the cost unless somebody does something catastrophic like a ZIP select, instead of a ZIP omit. Once the order is negotiated, that's it. If the deal wasn't good enough on that order, then it will be addressed on the next order, but we're never going to go back to that invoice. It should theoretically solve a lot of back office problems that brokers and managers have.

MAYLANDER: We're on the bandwagon for that. We think it's going to be revolutionary to our industry and we're ready to implement it. We're looking forward to doing it.

BISSIG: What are you going to tell the client who comes in at the last minute and says, you know, that wasn't good enough. And you fought for it, you got everything you wanted, and the order goes through, and then they sit there and say, it wasn't enough. I don't know if it's us who have to buy into this. We can put anything we want there. It's the client who has to realize that when they approve that order, that's it, we're done. And that's not happening.

MAYLANDER: I think we need to educate our clients on how this process is going to work. At ALC, we're going to create reports that support the negotiations. We're going to set up a report so that it will be like negotiating a net-name guarantee, but you're negotiating a net with the duplications that you would have omitted. So if you had gotten an 85% net and now you're negotiating at 82.5% net without taking deductions, we're going to save the time on the back end. There will be more efficiency in our company and it will allow us to utilize our resources to offer more services to our clients.

HEANEY: It should be more predictable for our clients. They should be able to better project their campaign costs.

HUNTOON: And the list owner is going to be able to better project revenue.

DUGGAN-JOSEPHS: So you're talking about negotiating price per thousand up front, not a net still. Correct?

HUNTOON: Whatever you need.

MAYLANDER: But you have to take into consideration the deductions because that's really a flat negotiation from the way you were negotiating before. So our clients don't say we're not getting the best deal on the table because you didn't negotiate all these deductions we normally used to be able to take.

CASTLE: If mailers actually knew what brokers do for a living, how hard it is — do you think there should be some sort of mechanism, should a formal campaign be launched to the mailing community to tell them?

ROBERTS: I have a Webcam installed so all my clients can see (laughter).

ROBERTSON: I think it's back on us. You can tell them ‘here are the things we did to make this happen. Here are the things we did to meet your delivery date.’

MALC: I think they know we're working hard. I just don't think they know the whole process we go through.

ROBERTS: I don't think they need to. I think they want to know you understand their product line, that you understand what lists are on the market that really meet their needs, that you understand data processing and segmentation, that you understand all the processes that you have to do to get the job done effectively. But that's why they pay you. So they don't have to know what the processes are. Some marketing managers absolutely love it. They absolutely want to be included. But sometimes they want a hands-off approach — you do your job and I'll do mine.

ROBERTSON: And [clients] have tough jobs, especially right now.

DUGGAN-JOSEPHS: We don't know everything they do.

ROBERTSON: Their role seems to have expanded.

BISSIG: When you call a client and they're at a photo shoot, that's because their organization has gotten much smaller and they have to take on additional roles. It's great to have a mailer come to your offices and sit as you're going through and show them what you do. You see their eyes open and ‘Oh, OK.’ A year later, they've got two new people who are doing it and they don't always come back, so you lose that. There's a lot of turnover on the mailer's side.

CASTLE: Have list rental orders gotten more complex in terms of the information that mailers are trying to cram into them?

DUGGAN-JOSEPHS: One of the biggest complexities we see now is possible promotions. People are placing orders saying, ‘We think we might do one of the following 12 promotions and we need approval for all of them until we decide which one we want to do.’

HEANEY: The pre-approval process has really changed in the last five to 10 years. I spend a lot more time pre-approving, pre-negotiating, discussing concepts.

HUNTOON: And a lot of it is ‘just in case.’

BISSIG: They just want the option to be able to run their business the way they want to run it. And we have list owners who say we can't do all these different things, but when they're a mailer they want to do all those different things. So that hasn't changed.

DUGGAN-JOSEPHS: Mailers now have a greater ability to react quickly to current results. It used to be, ‘OK, I'm doing my budget, how did September do last year?’ Now they're looking at September last year and sales this week. I don't think they had that ability to react so quickly in the past.

BISSIG: They want their options open.

MAYLANDER: I know on the fundraisers we've been clearing a ton of different packages because as they're reading the results and they're putting in all these packages and test panels and saying, ‘Well, if this one goes and we can make the keepsake go we're going with it and we're just going to roll out on it.’ So they want to make sure they're covered because they have 15 packages in the works to see whichever is going to be their quick fix.

HUNTOON: And unlike maybe years ago I think the mailers are very diligent about trying to play by the rules, because most of them are list owners. They seem to be eager to do the right thing, and that's why we end up clearing 42 offers.

SCHLOTMAN: I think it's a little different in business-to-business. The database marketing technology is so sophisticated now that we actually spend more time mining data and using overlay information. So it's not so much that we're pre-clearing hundreds of offers for a particular mailer, it's how we go about selecting names for that offer.

MALC: I also think what's important is when you're placing those orders with the managers and making sure that the person who is processing the order at the list management company really understands what they're doing. And that's really still a big struggle.

CASTLE: There's a general feeling among list managers that service is declining.

MALC: It depends on who it is. You know who the good ones are and you know who you have to watch. For the most part, a lot of the people at the management companies who are getting those orders are basically order processors. You have to be so careful that the right people who are responsible for the list are really looking at your order. And that doesn't always happen.

HUNTOON: Frequently it doesn't happen. I had an experience where I worked out something at the Catalog Conference, and I came back and I placed the orders. The guy who received the orders said ‘You can't do any of that stuff, none of that stuff is on the list.’ I said, ‘Yeah, it is, really, trust me. Go talk to your boss.’

MALC: That's always been a struggle and it still is.

SCHLOTMAN: The whole key is that you have to know who to talk to. It's up to us to develop relationships with the managers. Or is it really up to the managers to develop the relationship with us, since we're the client? (Laughter.) It's that relationship that you have to have so you know who you're dealing with.

CASTLE: So a mailer mails a campaign, and comes back to you, or you go back to him 17, 23 weeks later and say ‘How'd it do?’ Does he go beyond yes, no or maybe? Do you get to have active input into the quality of the marketing campaigns?

BISSIG: Absolutely. The list and merchandise offer. What has changed is the price point, the promotions, all the things they may have done. That made a difference.

HEANEY: I think we saw that heading into the Iraq war. Clients want to go back post-9/11 and look at the lists they mailed and see what categories held their own or in some cases did better post-9/11, so that as they prepared their list mix they could shift where the mail volume was going. Travel, some of the high-end disposable income-oriented lifestyle lists, kind of panned out because people weren't going to travel, they weren't going to spend their money. That was interesting in the last six months, to try and see if we learned anything from the last national crisis two years ago to better plan ahead.

CASTLE: To close, I'd like to ask everyone if there's something in the process of list brokerage you'd like to see done differently.

HUNTOON: I really believe we need more technology to take from us the burdens of the tedium so we can go back to having more think time, more research time. I feel that's imperative as our industry evolves.

ROBERTS: There are some things our industry needs to succeed that are beyond our control, [like] low postal rates, and reasonable laws relative to e-mail marketing that don't [stop] reputable direct marketers from utilizing the Internet.

HEANEY: I'd like to see when a new list comes on the market that ‘direct response’ is banned as the source. (Laughter.) I wouldn't have to pick up the phone and ask a manager how a list was put together if [I] simply [could see it] on the data card. It's a running joke with the folks on my team that they're not allowed to put direct response on a spreadsheet because then we're missing all the information that our clients want.

ROBERTSON: It's more about how we're going to reach an audience. I don't think our thought when we get calls from people should be ‘What list am I going to rent?’ I think our response when we get a call should be ‘How are we going to reach the customer this client wants to reach?’

SCHLOTMAN: I'd like to see more list managers putting usage [on data cards], because I use that to really sell a list. The usage really helps a broker to really get their arms around a list.

DUGGAN-JOSEPHS: I'd like better information from managers. I get lots of e-mails from managers. Some of them tell you something and an awful lot of them don't. They're just trying to get their list name in front of your face, and it's not telling you what's real about the list.

BISSIG: One thing that would greatly help our industry is if we could be more uniform. There's a great deal of things mailers are doing in their processing, with their printers and us and the service bureaus that we haven't picked up on. We may be the holdouts here of everybody wanting to do it ‘my way.’ And really, we don't have a lot of differences. When I watch the paperwork that goes through my teams, it's ridiculous how much we're sending back and forth. We need to step up to the times and understand we don't need that backup of paperwork we did 10 years ago.

MALC: I would say definitely leading this wish list would be less paperwork, less of the tedium. It used to be years ago you'd have an order and it would have all these pages attached. We're not past that yet, and we should be.

MAYLANDER: I agree. I think if we can do best practices for a lot of the operation aspects of our job, [then we can] explore different high-performance partnership [opportunities] beyond just being a list broker. And it lets us be challenged mentally to bring new ideas to the table, so it's not just processing orders and putting together a mail plan without the thought process behind it.

• Bob Castle, marketing consultant
• Kathy Duggan-Josephs, president, D-J Associates
• Paulette Schlotman, senior vice president, MeritDirect
• Randy Robertson, senior vice president, account management, ParadyszMatera
• Michael Heaney, vice president, sales, Millard Group
• Heather Maylander, senior vice president, American List Counsel
• Coleen Malc, senior client management director, ClientLogic
• Dennis Bissig, group vice president/director of marketing services, Mokrynski & Associates
• Wayne Roberts, vice president, Edith Roman Associates
• Linda Huntoon, executive vice president, Direct Media