Hidden Assets

March 28, 2008



An antique chair sits in the attic, covered with dust. No one realizes its worth or value. It has been packed away, unused and unappreciated. After several months, the chair is found, brought downstairs, and cleaned up. The antique piece is brought to a dealer and valued at thousands of dollars.

Your customer database just may be your valuable antique chair.

If you sell products or services and have a database of customers with names and addresses, then you have a profit center right at your fingertips. You can generate substantial “list rental” revenue by allowing noncompetitive companies to market their products to your customer base.

Here are answers to some frequently asked questions that will go a long way toward having a better understanding of the process.

My customer database is my most valuable asset. Will making it available for list rental have a negative impact on my core business?

Putting your list on the market will not have a negative impact on your core business. You do not give up ownership of the data, you simply allow certain companies to rent your file for a one-time use. You can decide who can use your names, when they mail them, and what data they can access. If there is concern with a prospective mailer, you simply decline them. At no time do you ever relinquish control of your customer list.

Will my data be safe?

Yes. List managers partner with data-warehousing companies that specialize in the maintenance and hygiene of customer databases. It is also the list manager’s responsibility to make their best efforts to rent the data only to reputable companies. List managers also decoy and seed the list to help prevent and deter unauthorized use.

What are my data worth?

Lists are typically marketed at $80–$150 per thousand, depending on the list. Lists of direct-response buyers (infomercial buyers, Internet buyers, telemarketing buyers, and direct-mail buyers) are typically the top-performing lists and generate the most revenue.

There are a number of variables that factor into the potential revenue that can be gained from list management. Some of these include:
 

 

 

 

  • The size of the database.

 

 

 

  • The selectivity (i.e, ability to select by purchase amount, product category, recency of purchase, consumer demographics,
        etc.)

 

 

 

  • The uniqueness of the data.

 

 

 

  • The accuracy and hygiene of the data.

 

 

 

  • Marketability (i.e., is there demand for these data?)

What data should I make available?

The short answer is that you can make whatever data you want available. Factors that should be considered when deciding this could include:
 

 

 

 

  • What data have the most value to other companies?

 

 

 

  • Are there any legal restrictions on the use of the data?

 

 

 

  • Does your own privacy policy, as currently written, prevent you from releasing any data?

A conversation with a list manager will help you in this decision-making process.

CHOOSING A LIST MANAGER

Selecting the right list-management company is vital to the success of your list-rental program. You want to select a reputable company with a proven track record that has expertise in your market. During your initial research, some questions you may want to ask potential list managers may include:
 

 

 

 

  • How long have you been in business?

 

 

 

  • What types of markets do you represent?

 

 

 

  • Can you provide references?

The list-management company you choose to work with should be responsible for:

 

 

 

  • Keeping your data in a secure environment and acceptable monitoring of the users of the data.

 

 

 

  • Accounting practices (i.e., their ability to collect, report, and disburse revenues in a timely fashion).

 

 

 

  • Marketing and promotional activity in the form of trade shows they attend, space ads in trade publications, direct mail, e-mail promotions,
        etc.

 

 

 

  • Order and data processing.

 

 

 

  • Sales and marketing of the list.

 

 

 

  • Communicating and reporting to you, the list owner.

Every company that has a customer database should consider making its list available for rental. Whether your database is large or small, B2B or consumer, direct-response television, or direct-mail sold, the potential value of this asset should be explored. The list manager you choose will represent you and your list in the marketplace. It serves as an extension of your marketing team. List management is one way to unlock your hidden assets.

Tracy Donohue is vice president of new business at Macromark Inc. (Brewster, NY). For more information, contact Macromark by calling 845/230-6315 or sending an e-mail to tracyd@macromark.com