News
 How
to Handle Lists Negotiations
By Patricia Leon
At an annual direct marketing conference some 10
years ago, I arranged a meeting between my client
and I and a list owner and his manager to discuss
discounted pricing and a more favorable net name
arrangement. To find out how we got most of our
concessions requested.
The main reason for our victory: we offered a
win/win proposition to both parties in the
negotiation. Let me explain how.
My client needed a favorable net and reduced
selection charges because he could only mail
particular surnames in any one promotion. Since he
took all available on a recency basis, the client
ordered large quantities of (primarily male) names
over a 12-month period. Because a substantial
percentage of these were lost to surname suppression
and merge/purge, the client could not afford to pay
card rate.
The incentives we offered the list owner were
two-fold.
We provided indexed response data for his list and
promised to not only continue ordering it on a
regular basis (if the response held up), but to also
test females and unknowns.
If there were other lists in the same family, we
agreed to test them as well, in order to maximize
our business with that list owner. We also agreed to
make whatever deals he offered us reciprocal.
Typically, we found that the females and unknowns
worked well, although not as well as the males, and
everyone benefited from the arrangement.
As costs continue to rise for paper, printing and
postage, direct marketers seem to feel that the only
way to cut costs is to hammer list owners with
requests for increasingly deep discounts.
Since many list owners are also mailers, however,
they feel that they are being pressured from both
sides and, increasingly, are unwilling to budge when
approached for pricing concessions.
It is extremely important, therefore, to ask only
for what you actually need and be willing to
document it. Don’t ask for a 50 percent net when you
only lose 10 percent of a list in merge-purge.
Rather than requesting a better net, consider asking
for a reduction in the base price and/or for
selection charges to either be waived or capped at a
lower rate, if using multiple selections.
Since service bureaus often charge list owners far
lower production costs than are charged to mailers,
list owners often have flexibility there.
Be sure your broker takes advantage of discounts
often available to certain categories of mailers,
such as nonprofits, catalogs, publishers, etc. Take
advantage of advertised free or reduced price tests,
and request them even if they are not generally
available.
Consider what you as a mailer can offer to a list
owner to show your good faith and all parties will
ultimately benefit.
---Source: Patricia Leone is a senior account
executive at Leon Henry Inc., Hartsdale, NY. Reach
her at patricial@leonhenry.com.
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