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Saturday, November 03, 2007

Michael Stone's e-letter, some words about direct marketing lists

Michael Stone speaks with Gordon Clotworthy of the Information Refinery,

Michael Stone's Markup and Profit eletter is a wealth of free information -- He provides much of this stuff publicly on his blog and website, but has wisely chosen to restrict some of his best suggestions to the e-letter (that way he starts building the relationship with you for his other consulting services). Unlike most eletters and websites, however you don't feel that the whole thing is about selling you something -- you'll be able to implement his advice without paying him a cent. This of course is the essence of "Permission Marketing" (see also Seth Godin's useful free blog). Again, I'm stretching copyright here (and will immediately remove these observations on request) but don't think Michael will mind because this blog, which also works on the Permission Marketing principals, is generating and sending significant traffic and positive references to Stone -- ultimately good for his business. This attributed exchange will also presumably help The Information Refinery, which provides mailing list and contact data services.

To wrap up our series, "Getting Your Phone to Ring", we interviewed Gordon Clotworthy, CEO and President of The Information Refinery in Mahwah, NJ. The Information Refinery ( has been in the direct marketing business for over 23 years, and is the #1 source in the world for construction-related marketing lists.
CPR - It's great to talk with someone who understands direct marketing and construction. Can you give us the rundown on direct marketing options for contractors?
Gordon - There are four basic approaches to direct marketing - postal (or snail mail), email, telemarketing and faxing.
Direct mail is by far the best method of direct marketing. It's affordable and, with a well-designed mailpiece and a well-defined list, it can prove to be the most economical and effective method for both immediate sales and future sales.
CPR - Where do you get your lists from?
Gordon - We manage over 100 construction related response lists which for all intents and purposes cover the entire marketplace. We also have strategic partnerships that provide us direct access to all of the consumer and general business-to-business lists and data bases available. Due to the high volume we purchase on a daily basis, we are able to obtain lists at the lowest possible price and pass the savings on to our customers and clients. We also have the ability to merge various lists together and append data in order to build a list that meets the best meets the target audience.
CPR - How many ways can you define a mailing list?
Gordon - There is a great deal of information that can be selected to develop the best possible mailing list. For example, you can select homeowners based on their income range, age of their home, time they've lived in the home, whether or not they have children, the ages of their children, the value of the home, single parent or married, handicapped . . . the options go on and on.
For example, if you specialize in bathroom remodels, you may want a list of homeowners within a certain area with an income over $100k living in a home that's over 20 years old. If you build new homes, we can provide a mailing list of apartment dwellers, with two or more kids and with whatever income level that suits your project.
CPR - How expensive is a mailing list?
Gordon - You can get a decent consumer list, sliced and diced to meet your target market, for about $65-$70 per 1,000 names, minimum of 3,000 names. For a few dollars more you can use the names over and over - in a year, for a very nominal fee, we will clean and refresh it for you.
For $10 more per thousand, we'll include phone numbers in case you want to follow up on your mailings with a telemarketing program.
Buying a mailing list is like shopping in a grocery store. You can buy prime steak which you know will be delicious, or you can buy a lesser grade and grumble all through dinner about how bad it tastes and how tough it is. But hey, you saved a whopping $3.00 on dinner for two, forget the fact that no one really enjoyed the food. You get what you pay for.
We see people shoot themselves in the foot every day. They come to us for a price quote and then shop it all around. They then come back and say they can get the list for $5.00 less per thousand elsewhere.
Unfortunately it usually is apples and oranges. The lesser price list is not even close to the quality list we quoted them on. So what happens? They "save" $25 bucks on their list purchase of 5,000 names and then gripe and moan about the dismal failure their mailing was. But hey, they saved $25 bucks.
Ask your mail list provider how deliverable the list you plan on purchasing is - will theyguarantee deliverability? When was the last time the list was "cleaned" by the post office? (On average, one third of all businesses and consumers move or make a change to their address each year.) If a mailing list isn't kept current you'll end up wasting up to 1/3 of the total cost of your
mailing and more importantly your response rate drops through the floor. We guarantee our lists to be at least 93 percent deliverable - some lists are guaranteed 100 percent deliverable.
CPR - What about commercial names?
Gordon - We have a database of over 13 million businesses. If you want to know owners of strip malls in your city, we can provide it. Facility managers, property managers, owners, we have it. Decide what kind of commercial construction you want to do and we'll match it to the prospects most interested in what you have to offer. Think out of the box. If you can pick up work from
strip mall owners there will always be work to do. If you are a painting contractor and gain the business of a few good sized apartment complexes you know that the end of the month and the beginning of the month will be booked solid.
One of the great things about direct marketing is that when you start the process, you begin to expand your thinking and realize other ways to tie your ongoing search for new business together. You develop plans. And plans always work better than just throwing precious money here and there because "it sounded like it would work".
CPR - What makes your business different from others?
Gordon - I come from the same background as Michael - building my business from the ground up. In my case I've had my share of trying to meet payrolls and working 16 hour days seven days a week. Those experiences helped me develop our corporate philosophy. I've known Michael for some 20 years or so and it didn't take me long to realize we think alike. We know the importance of each and every client and we treat them all with the same respect and desire to do what is best for them.
We actually consult with our prospects and clients. We let them know all of their options and guide them into making the right decisions. If someone wants to do something that we think might be a mistake, we let them know. We're the furthest thing from "yes" people you'll find. Our goal is to serve our clients best needs. Not to sit back and let a customer buy the wrong list just so we can make a sale. It's what separates us from our competitors. Every client matters to us, that's simply the way we like to do business.
CPR - What about the other avenues of direct marketing?
Gordon - Everyone thinks email is the greatest thing since sliced pizza, but it's not a great marketing approach. It can be dangerous - if you do it yourself and get complaints, there is the risk you'll have your website shut down. If someone offers to sell you email addresses, those are spam addresses. You can't buy or sell an email address, because they are owned by the person who holds them.
Currently we are discouraging our clients who wish to do email marketing. It's just not effective anymore and although everyone is under the misconception that it doesn't cost nearly as much as a postal campaign they are dead wrong.
Here's why, the vast majority of the emails sent aren't read because they end up directly in a spam folder. Because of viruses and scams people just don't want to risk opening emails from someone or some company they do not know. When you sit down and actually calculate the costs and the sales derived, you'll find that your cost per sale compared to a postal campaign are off the chart.
However, if someone is hell bent on doing it we'll grudgingly oblige. We take their message and do the email broadcast for them. Our email lists are from those who've agreed to receive advertising, and we follow all the laws. But, as I said before, it's not effective and you won't be happy with the results.
CPR - Do any contractors actually do telemarketing?
Gordon - Yes, usually large companies who've been in business for a long time. They realize the need to use all avenues available. Companies will buy a list of people in a neighborhood around a job they are working or a list in their service area and put their telemarketers to work. Our lists are cleaned through the "Do Not Call" database so they comply to the laws, but the telemarketers still have to follow federal guidelines.
CPR - What about faxing?
Gordon - Don't do it. Unless you have prior agreement from the party you are faxing you are breaking the law. You can get a $500 fine for each fax complaint. There are lawyers who advertise hoping to reach people and companies who've received junk faxes so they can go after the company involved.
CPR - How about lead suppliers,
companies that promise to send you qualified leads?
Gordon - I'm not impressed with them. If you want to know more about them, we have a number of those businesses listed on our website Unless you are getting a 1 on 1 lead - a lead that is given to you or at most two others - it just doesn't make sense. If the lead provider is selling it to a slew of other contractors in the area, by the time you call that lead, they are sick of hearing from contractors. You might be the 20th contractor who's called them that day and you can be sure they don't want to talk to you. But you still have to pay for the lead.
That being said, I see a glimmer of hope on the horizon. A new site has just started and they will be working on the premise of providing leads on an exclusive basis. And get this, the leads are free. It's based on a reciprocal concept. The site is in beta format but you can find details here:
If you spend the money you'd spend on a lead supplier on direct mail instead, you'll get better leads. Your potential customers will know who you are when you call. You aren't just another contractor, you're that guy on the postcard who builds beautiful jobs. When a lead comes in, be sure to ask how they heard about you. Keycode your direct mail pieces so you know which are effective and which aren't. You want people to hear your name from a number of sources. And remember to use testimonials. When you can say, "We do great work - but don't ask us, listen to what Susie said", you'll go much farther. The bottom line is that there are a lot of avenues for advertising, and the successful company does a mix of all of them.

There is much excellent information here -- and this is a fraction of the content of one week's newsletter. Again, I think you can obtain much value from Michael Stone by signing up for and reading his newsletter, but you'll get even more by contacting him and paying for his services. (I'm not selling any consulting services myself -- at least for the next five or so years and, for my own business, this blog primarily is used for follow-up service and support to existing clients, and to help on our own staff recruitment and training, so consultants and services referenced here don't need to worry about competition at this end.)

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