Mailing Lists: Hit Your Mark

Get more bang for your buck with a demographically-based mailing list.

September 1, 2006

To some marketing experts, using direct-mail campaigns aimed purely at a geographic area is like watching a movie on a VHS videocassette recorder: It works, but there are better, more efficient systems that offer higher quality results.

The DVD equivalent of direct mail, experts say, is a highly targeted approach that uses a demographically based mailing list.

The rationale for a demographic strategy is an outgrowth of the old adage that birds of a feather flock together. “People who are similar to each other have similar shopping preferences and ways in which they buy things,” says Joy Gendusa, CEO of PostcardMania, a direct marketing firm in Clearwater, Fla.

So, if you’ve had success with a particular type of client or are trying to build more business in a specific market niche, try to identify the characteristics shared by those clients. Those traits can help you develop a finely tuned mailing list of consumers, such as doctors, golfers, or second-home buyers, and then craft a marketing message that members of that group are likely to respond to.

“There’s nothing wrong with geographic farming,” says Don Hobbs, chairman of Hobbs/Herder Advertising in Newport Beach, Calif., “except that it’s the way most practitioners do it.”

The other advantage to demographic marketing: Because you eliminate people who don’t match your criteria, you can boost the frequency of mailings to those folks who are in your target audience without increasing your mailing costs.

“For real estate professionals, it’s all about hitting the same people over and over again. That’s what makes practitioners credible,” says Gendusa. “Direct mail isn’t a one-shot get-rich-quick scheme. Direct marketing is a continuous activity.”

To be sure, practically all of the mailing lists that real estate professionals use start with a geographic component, such as a region or ZIP code. The idea, however, is to determine which demographic criteria, or “selects,” to use as an overlay in order to parse the list so that only the target consumers are included.

The most common demographic criteria are age and income. Other common criteria include the presence of children, whether consumers currently rent or own, and whether they live in a single-family or multifamily property. However, mailing list providers can delve much deeper into their databases, screening for such things as estimated current home value, amount of outstanding loans, occupation, and lifestyle characteristics, such as whether a consumer is a golf or skiing enthusiast, says Jai Sanyal, vice president of information solutions in the New York City office of Experian Marketing Services, an information solutions and database company based in Schaumburg, Ill.

Sanyal also notes that criteria can be used to exclude certain segments. For example, you might want to target households with annual incomes of at least $50,000 that currently rent and enjoy golf but don’t have children.

There are a couple of ways to determine which criteria you should use. One is to analyze your current client base to see if there are any discernable patterns—such as a propensity of first-time buyers, seniors, or attorneys. You can also pay companies such as Experian and Acxiom Corp., another database company, to do that analysis for you.

If you’re just starting out in real estate or want to tap a new market, you’ll have to conduct some research into which characteristics your target audience shares. You could build your own list, tapping public records and augmenting that data with information you gather yourself. For example, you could develop a direct response ad or promotion in which you offer recipients something of value—a coupon for a coffee—in exchange for personal information. Or if you believe many area residents are golfers, you could offer something valuable to that particular group, such as a chance to win a free round of golf. Ensure in your promotions that you make clear why you’re collecting names.

When you build your own list, you bear the responsibility of maintaining it. Alternatively, you can buy demographically based mailing lists from a large database company; a list broker (search Google.com for “mailing lists” or “mailing list houses”); or special interest groups, such as magazine publishers, clubs, and alumni groups, which sometimes sell lists. The price, usually expressed as a cost per thousand names, will depend not only on the size of the list but also on how many criteria were used to compile it. The base price for a list averages about $25 per 1,000 names, with demographic selects costing about $5 to $10 per thousand names.

Your mailing list should be updated at least annually by performing such tasks as checking for new addresses and activities, such as a recent real estate purchase.

By getting a clearer picture of your target market, and the characteristics members of that group share, you should see an improvement in the effectiveness of your direct-mail campaigns.

“Small-business people are getting smarter. They’re trying to create profiles and get a better understanding of their customer base than in years past,” says Sanyal. “The days of saturation mailings are long gone. You want to go out there and more closely target people.”

Chuck Paustian is a former REALTOR® Magazine senior editor.

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