Most people involved with direct marketing do not expect to make money from a mailing … unless they are mailing to an established customer.
It is very costly to send out mailings to generate new customers, new donors and sales leads. Look in your mail today. You might see a mailing from an insurance company offering a month’s insurance for $1. Lots of non-profits ask for very small donations to get you started, and a great many offer free premiums … name and address labels, greeting cards or other items. Continuity clubs typically make wonderful upfront offers — receive volume 1 free, get 5 cds for 99 cents, etc.
All of these mailings lose money, and a great deal of money. The companies have computed the lifetime value of a new customer, new donor, etc., and they have set an amount of money they are willing to lose in order to get that first order.
However, there’s another way … that no one talks about. Every day we read about companies large and small getting into financial difficulty, or filing bankruptcy. One of their most valuable assets is their customer list. Right now, when they are in financial trouble, it makes sense to offer them a reasonable price for their customer list ~ with the understanding you are going to market to their customers telling them where you got their name from.
A company may be losing money; but still have thousands, or tens of thousands, of great customers, and you can probably acquire that list for a great deal less than your cost in acquiring new customers.
We have also arranged for companies to swap customer lists. I’m not talking about list rental or exchanges. Those are one time transactions. I’m talking about the mortgage company and the title company exchanging mailing lists. They are both involved in providing a service when a new home is purchased; but they’re non-competitive. By trading lists each company gets thousands of customer names, with no out-of-pocket costs.
Acquiring a great many new customers is very expensive. By looking for alternative ways to get quantities of logical customers, at little or no cost, you’ll build your customer file quickly and less expensively.