From the April 1999 issue of Entrepreneur

When FCI Construction, a 60-person architectural design and construction company in Mountain View, California, wanted to find new commercial and residential customers to target with direct mail, it tried a new option: an online list company. FCI's marketing director, Lori Lewis, decided an online list company would save time and money, and eliminate the hassles she was experiencing with other attempts to gather new prospects.

She was right. "In a small company, it's crucial to get the most out of every marketing dollar you spend," says Forrest Linebarger, 31, the owner of FCI Construction. "Online list sources are one way to find new clients at a reasonable price."

Like many small businesses, FCI had tried using a software program that contained lists of names and addresses that were updated quarterly. The software produced limited results, however, because its data was often outdated. A substantial amount of time was spent cleaning up the lists to make sure the names were accurate and that there were no duplicates.

Lewis discovered online list companies almost by accident. While visiting the Web site of Palo Alto, California's MySoftware Co., she stumbled across an online lead-generation marketing service called MyProspects.com. The service offers targeted contact lists of potential customers. Lewis contacted the company and began using its service in January after a brief test period.

"[MyProspects.com] offered us a condensed list that really honed into the target market we were looking at," Lewis says. "And it reduced the time spent on sorting the lists and making sure the information was correct."

The site doesn't charge subscription or sign-up fees; rather, users pay only for the names they download. They're assigned a password for the company's Web site, which allows them to conduct unlimited list searches. Through a licensing agreement, the site offers 13 million business listings from the database of Experian, a credit reporting company in Orange, California, as well as 112 million household listings from the database of Polk Co., a data provider in Southfield, Michigan. Entrepreneurs can choose business listings based on demographic or geographic criteria; sales volume, number of employees, business type or number of years in business; Standard Industrial Classification (SIC) code; or keywords. A total count of the list and its price is returned, and the customer then chooses how many records to download to an Excel spreadsheet or Word document.

The consumer data provided by Polk is searchable by a set of 26 predefined niches, grouped according to age, income, lifestyle interests and purchasing habits. It can also produce a customized consumer profile that includes income, age, length and type of home-ownership, and credit card use. MyProspects.com refreshes its data records from Experian and Polk on a quarterly basis.

In addition to MyProspects.com, market information firm Dun & Bradstreet in Murray Hill, New Jersey, has an online list solution called U.S. Marketing Lists. The service, available at http://www.dnb.com , allows customers to easily access D&B's database of 11 million businesses. The types of data that D&B has on file include credit, marketing, purchasing and receivables information. The service can be ordered on a contractual basis or as needed, and fees vary with the type and volume of information required.

Arlington, Virginia-based Claritas offers Claritas Connect, an online service that allows small-business users to access more than 100 detailed reports on every U.S. market at any geographic level. Users pay a $195 annual membership fee and receive unlimited access to all 1990 Census Reports. The company also offers individual reports on a pay-as-you-go basis.

Listing the Benefits

While big businesses are more apt to buy lists from companies like Experian or Polk or from list brokers that typically have minimum requirements of 5,000 names, small businesses may not need that many names. In addition, the prices these companies charge are often out of reach for small businesses. List providers and brokers that resell their data charge hefty fees--$100 per thousand names, for example. In contrast, MyProspects.com users can generate lists containing as few as 100 names and may pay as little as 13 cents per name using volume discounts.

FCI's Lewis has found that she can cull lists from MyProspects.com at 21 cents per name, and there's no minimum requirement; she simply does the list search herself using a Web browser. The service's price and ease of use has allowed her to increase the number of mailings FCI sends out. For the past few years, FCI has sent out two direct mailings every quarter to between 500 and 1,000 prospects. This year, it plans to increase the number of mailings to one a month.

Online list services also allow entrepreneurs to download information from the Internet very quickly. MyProspects.com, for example, can download lists of 20,000 or less in a matter of seconds, much less time than the days often required by a list broker.

"[Online list services] put a lot of control in the hands of the marketing department and take it out of the hands of the list owner," says Andy Sernovitz, president of the Association for Interactive Media. "You have the ability to get a firsthand look at the market instead of the list broker's or list owner's view of it."

Proceed With Caution

Online lists are not for everyone, however. Some small companies--particularly those without a marketing department to sift through the data--have found that hiring a list broker or market research company to sort and analyze lists is well worth the extra fees.

"When it comes to a small company and its resources, [gathering names] is something best outsourced," says Deepinder Sahni, a senior consultant at Access Media International (USA), a new-media research company in New York City. "If [mailings are] something you want to do periodically, it doesn't make sense to have a full-time market research person on staff."

List brokers and full-service marketing research companies can provide small businesses not only with lists and research but also with guidance in the form of an account manager or broker. They can often guide a company to the lists that best suit its needs. And they have mechanisms in place to monitor which lists generate the best responses. While these companies tend to cater to clients that send anywhere from 5,000 pieces of direct mail a year to 50 million or more, many will work with smaller companies.

One popular full-service list broker that offers independent online searches is Edith Roman Associates in Pearl River, New York. Although customers initially work with a broker, they can later retrieve their lists through an online search to receive the data as quickly and efficiently as possible.

Entrepreneurs who can afford the best-of-both-worlds scenario Edith Roman offers may spend the least amount of time searching for qualified prospects. But for those businesses on a budget that have only a marketing manager to retrieve data, online list companies are the way of the future--and the quickest way to customers.


Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at Melisscamp@aol.com