Deal With It

Direct had a full house for this year's list roundtable. Considering all the additional responsibilities on brokers' plates, that's impressive. Clients' time and budgets are crunched, and they're looking to list professionals to provide far more than names. These days the average list company also offers e-mail deployment, search engine optimization, data analysis and market research. How list pros charge for these services and make the most of client relationships were hot topics. “It's a delicate balance. We can't just turn on the clock like an attorney,” said Statlistics' John Papalia.

GREEN: We've all expanded beyond management and brokerage. The value proposition for traditional list companies has changed dramatically.

SAMBROOK: Our customers are primarily B-to-B, and mainly high tech, so in many cases it's been the client pushing us to the next level. We've always had to step ahead and deliver content and deliver leads.

SCHWEDELSON: 2008 will be the first year proceeds from services other than traditional list rental will exceed all other revenue in our company, which is pretty amazing. And it's a growth year, too, which in and of itself is exciting.

MASSE: We've diversified our channels and offer ancillary services, but at the core our business remains media brokerage.

ZILLING: Over the years our focus has been database marketing, using list sourcing as the foundation and advanced segmentation to bring in additional data.

GREEN: What has driven this diversification?

BAUMER: The catalysts for all of us probably are similar. On the economic side, we see the costs of acquiring new customers through direct mail. And the reality is our clients demand more services. If they don't get them from us, they'll get them elsewhere. Our customers want to know how they can grow their businesses efficiently. They want to generate leads, acquire new customers and communicate with those customers via multiple media channels. We need to help them navigate all that.

LAKE: Take e-mail marketing as an example. In the late 1990s, you had DoubleClick, 24/7 and other companies that understood the ability to create critical mass — but we understood how to target. It was a natural extension from direct mail into e-mail and we understood how to leverage that model. The new companies to the space had millions of e-mail addresses, but list brokers looked at how to target the best possible lists, as opposed to just having a master file with thousands of different sources, which might not be as reliable.

ZILLING: As more sales happen online, offline response rates are dropping. A lot of our focus has been on developing analytic tools to help us understand opportunities online. We need to get our arms around what's going on the marketplace.

SAMBROOK: The Internet has empowered consumers and changed the way companies market and communicate, as well as the content they deliver and how they deliver it. Our role is to help [firms] nurture leads and move people through the sales cycle. It's a natural fit for our industry. It's like the rest of the world has caught up to what we've been doing.

SCHWEDELSON: Don't you think it's fair to say, though, that our industry has been very much about the tail wagging the dog? We're not soothsayers by any stretch. Our clients really are the ones who can share key information to point us in the direction of where things are going. They're seeing declining rates in some categories, even sooner than we are in certain cases. They say, ‘Can you help us with this?’ We say ‘Sure,’ and then we get off the call [wondering], ‘How do we do that?’ But when we figure out a profitable solution we can share that with other clients.

KERTELITS: I agree. A lot of the growth we've seen is based on our clients' needs. In the nonprofit category a lot of clients have done away with their own marketing departments, so they're looking for outside sources. They call for help, so you become an expert in that area and then you can share the information. Clients are reaching out and saying they want a partnership to take them to the next level.

GREEN: What direction are you headed online with your clients?

BAUMER: Everything we do falls under the heading of direct marketing, even if our clients don't always recognize it. And that's OK. They're looking for a return on their marketing spending. Clients are focused on an action being taken based on an advertisement. And in the online space there are a lot of different ways to accomplish that. Unfortunately, a lot of us in the list industry were late to the game and allowed new players to get in.

MASSE: Our online group actually has evolved from just brokerage to being a full-service agency. This was partly in response to client need. We're involved in all kinds of online media. We've also gotten into online creative development — some of the creative our clients were getting wasn't effective and was [conceived] by people who didn't understand direct marketing. And we've built proprietary software for things like bid management and sales optimization.

PEREZ: Our program started as an online advisory/consultancy strategy. We thought [we could assist] our clients by helping them develop Web sites, metrics and a variety of testing components, and drive traffic. Candidly, what we found [they] wanted was help renting and managing e-mail lists,e-mail deployment and e-mail list hygiene.

McCORRY: In addition to traditional media brokerage, we're finding success in digital media partnerships, taking two or three clients and marrying them together where they have a like audience. It opened up clients that [usually] don't rent their list or use e-mail. And that's led to other services, like creating Web sites for them.

BAUMER: I think the other thing we've all done pretty well is monetize assets for clients. In the beginning it was their mailing lists and then their e-mail lists. And now it can be their Web site. We power post-registration. If a client has a Web site where people are asked to register, we enable [that client] to show offers and generate incremental dollars.

GREEN: What additional products do you provide offline?

SCHWEDELSON: We've started brokering offline co-registration. We're working with a lot of B-to-B publishers that need requalification on their magazines. We call people up and ask if they still want to receive XYZ magazine. At the end of the call we insert a question, like ‘Do you also want to receive e-mails from XYZ?’ It's a huge way to drive offline registration. We should have been doing it for the last 20 years, but it didn't dawn on us until we started trying it online.

MASSE: We've developed ancillary services, like doing research to track promotions. We also do ad hoc things, like helping clients with budgets or [requests for proposals].

GREEN: How does this expansion affect your bottom line? Do you charge for these services? Do you bundle them into your current structure?

PAPALIA: The challenge has always been keeping both the company and the client satisfied. We have to work with clients and get in their shoes. We find ourselves developing a partnership with them, talking to them, understanding their needs and feeling their pain, to help develop programs. Then we can bring those ideas back to our company, where we can help other clients.