In his book 80/20 Sales and Marketing, marketing and advertising expert Perry Marshall explains how you can transform your sales and marketing results without extraordinary effort. In this edited excerpt, the author reveals his secret weapon for finding qualified prospects: response lists.
Most people don't realize the vast range of options you have when you rent and buy snail-mail lists, email lists and phone lists. There are basically two kinds of lists:
1. Compiled lists: For example, "All the dental offices in the United States," or "All the households in zip code 68505," or "All males between ages 31 and 40 in Cook County, Illinois."
2. Response lists: For example, "Everyone who subscribed to Black Belt magazine in the past 90 days," or "People who donated more than $100 to the Sierra Club in the past two years," or "People who bought items from the Hammacher Schlemmer gadget catalog."
Compiled lists are things you know about groups of people, generally based on publicly available information. A compiled list is w-a-a-a-y better than just calling names out of a phone book.
You can easily get a compiled list of "SIC codes," four-digit numbers that the U.S. government uses to categorize businesses. SIC stands for "Standard Industry Classification." If you sell any kind of stationery, you could get a list of all stationery stores in SIC code 5943, and you're going to have a much easier job.
Compiled lists are usually sold. You might pay one cent to a dollar per name for a compiled list, depending on how sophisticated the information is and how many "selects" you buy. Often you can be very selective: "I want vice presidents or production managers, and I want companies with more than $10 million in revenue that manufacture automotive parts." Once you buy a compiled list, you can use the data as long as you want.
The problem with a compiled list is that it's just a list. It's way better than no list at all, but a lot of names on that list are very low quality.
Response lists are different. The reason someone is on a response list is because he's bought something, subscribed to something, donated money, or gone to a trade show.
Response lists are much more valuable than compiled lists. And much more expensive. A response list comes from someone who has already sorted through the world and gotten people to actually raise their hands. That usually means they've spent money.
Response lists typically cost anywhere from 10 cents to several dollars per name. In the mailing list world, "hotline" names are sold at a premium price. Hotline names are people who bought or subscribed within the last 90 days. That adds an extra qualification because if they made that purchase recently, it means they're "in heat" and will probably respond to other, similar offers.
Suppose you have a miserable, cold-calling sales job. The fastest way to make your life easier is to start renting or buying lists so that you're at least eliminating 90 to 99 percent of the time wasters. You'll discover that when you purchase information like this, you suddenly have a much clearer picture of who you're talking to and what you need to say to them.
Whether you're buying web traffic, making cold calls, sending out emails, mailers or faxes, success starts with your list. If you get a cheap list and then spend all kinds of postage money sending mail to people who'll never respond, that's dumb. Better to spend $2 per name and mail 500 letters to targeted prospects than get a "deal" paying 30 cents per name and mailing 5,000 letters to people who don't care.
If it costs $1 to mail your letter, here's how the economics work out. Let's say a response equals a $100 purchase.
High-quality list: You mail to 500 people and get 30 to respond. $2 per name list rental + $1 postage x 500 = $1,500 cost. Revenue = $3,000, and you make $1,500 gross profit.
Low-quality list: You mail to 5,000 people and get 40 to respond. $0.30 per name list rental + $1 x 5,000 = $6,500 cost. Revenue = $4,000, so you just lost $2,500 before you even covered your product cost. (By the way, I'm making the generous assumption that those same 500 good buyers are mixed in this 5,000-name list. That's not always the case. Sometimes a low-quality list is pure junk.)
Sales is a disqualification process! The more junk you can eliminate before you spend money and effort, the more effective you are.
The most famous source of mailing lists in the U.S. is the SRDS, the Standard Rate and Data Service. SRDS is an online subscription service. But there are thousands of list brokers that you can work through. Other sources you should investigate include Acxiom's List Direct, NextMark and Hoovers.
Perry Marshall is the president of Perry S. Marshall & Associates, a Chicago-based company that consults both online and brick-and-mortar companies on generating sales leads, web traffic and maximizing advertising results. He has written five books including his most recent, 80/20 Sales and Marketing (Entrepreneur Press, 2013). He blogs at perrymarshall.com.