WAY West of Jewfish Creek

Dear Friend & Subscriber,

Hark unto me. As promised, this month I'm going to teach you how to steal!

There's lots of theft going on in direct marketing, isn't there? Here is how (sort of) some of it got started. Once upon a time, there lived a man in Direct Marketing Land whose name was Cletus Fleetfeet. Clete was a bright boy. He had written a book on how to beat the horses and, after being rejected by several publishers, he decided to market the book himself by direct mail. He wrote a compelling sales letter and he put together a very effective, high-pulling DM package. He was able to mail this package with outstanding results to several lists.

Then, he had a stroke of real luck! He found a list of people who had already bought several other books on horseracing and were eager to buy more. This list was owned by a man named Ned Notsoswift and, although it took a lot of wining and dining, Clete finally convinced Ned to let him rent his list.

And so he did. With unreal results. He was selling his horseracing book for $59.95 plus $3.00 for postage and handling (total $62.95) and, when he mailed Ned's list, he got a 14% cash-with-order response!

He was in heaven. He decided to keep mailing Ned's list over and over with other offers on how to win at gambling. Pretty soon he had six different offers and he was developing new ones at the rate of one or two per month.

Clete was mailing like crazy. And making money hand over fist. And driving a big Caddy with a sunroof and mudflaps. And learning to eat caviar (which he hated) and to drink Dom Perignon (which he loved) and how to impress dumb little girls with small minds and big chests.

However, in spite of all this, Clete was in pain. Real pain. Big pain.

What was the source of his pain, you ask? It's quite simple: The source of Clete's pain was that $200.00 per thousand list rental he had to pay Ned Notsoswift every time he rented Ned's list. Clete hated that. It didn't matter to Clete that he was making a fortune mailing to Ned's list. No. What mattered to Clete was that he was now having to pay Ned upwards of $30,000 per month in rental fees.

And who the hell was Ned to deserve that kind of money? Hell, all Ned had to do, every time Clete wanted to use the list, was make a phone call and tell his letter shop to run off more labels. Thirty thousand a month for making a few phone calls? Unfair! Unjust! Outrageous!

And so, Clete decided to steal Ned's list.

And so he did. And he mailed it over and over and made lots of money. And poor old Ned, even though he was very suspicious, could never prove a thing so he took to drinking and shooting up with chicken fat until his arteries got all clogged and he died of a heart attack.

So much for Ned.

Clete, however, kept rolling right along. He continued to mail Ned's list and found several others that worked nearly as well. He would've also stolen these lists except, by this time, Clete had developed a rep. Nobody really trusted him. Therefore, when Clete came to these more savvy list owners, they said:

"Clete, we want to rent our lists to you because, like you, we are greedy for money. However, since we are somewhat paranoid, we have invented a procedure that hereinafter shall be known as salting the list."

And, of course, they went on to explain to Clete how that worked. How they would "salt" their lists with "dummy" names and how, if those names received more than one solicitation from Clete, they would know he had stolen the list.

Clete was chagrined. By this time, he was making a fortune but other people around him like printers, letter shops (and especially list owners) were making a little too and Clete didn't like that. Not one bit! So Clete started thinking and scheming, and eventually he figured out a new way to steal large portions of valuable mailing lists, even though those lists were liberally salted with decoy or "dummy" names. Here's how he did it. First, he contacted a computer expert and he told the guy that he wanted him to invent the "merge/purge".

"What's a merge/purge?" asked the expert.

"That's what you're going to invent," said Clete. "You see, many mailing lists that are made up of buyers of similar products have a lot of overlap. In other words, many of the names are on more than one list. So what I'm gonna do is, I'm gonna tell all the owners of the gambling lists that I rent that it's unfair for me to pay six times for a name that appears on six different lists and identical promotions. And therefore I'm gonna tell them they should let me merge all the files and then purge out the dupes so I don't have to mail a name more than once. I'm also gonna tell those owners I should pay them a reduced rental rate and pay them on what I'm gonna call a ‘net name’ basis."

"Sounds good to me," said the expert.

Well, after a while, it sounded good to the owners also and they agreed to Clete's scheme.

Which, in fact, really was a good idea if used for legitimate purposes.

But, of course, we all know that sweet Ol' Clete had a bit of difficulty staying on the straight and narrow and, as I'm sure you've already figured out, an "invisible" benefit of the merge/purge process had already occurred to Clete. That benefit, of course, was that the process would enable him to steal a lot of names, in fact, the very best names, with no worries about getting caught.

You see, as Clete realized, a merge/purge kicks out only multi-buyers; those hot customers who have bought more than one gambling system, or diet book, or whatever. And, of course, a name that appears on more than one list cannot be a "decoy" name, can it?

It worked like this: Clete would get in a dozen or so mag tapes of lists he was going to use. He'd put them through a merge/purge process and kick out all the dupes. Then, he'd pay a reduced "net-name" rental to all the list owners plus he'd save a lot on mailing costs since he would only be mailing one solicitation to each multi-buyer.

But the big benefit, the one that made Clete really happy, was when he made a separate tape that contained all the dupes (which were the multi-buyers) which he then considered his own private property that he could mail to whenever he wanted, without paying any sort of rental fee.

Pretty neat, huh?

But wait. Clete wasn't finished yet. No sir. Not by a long shot. You see, after Clete mailed all his promotions to his hot new list, he decided to make even more money by renting that list to other mailers. That's right, what he did was, he made up a phony list card describing how the people on the list had responded to a certain non-existent offer, and he sent that card around to all the list brokers in the U.S. Now, some of these brokers were a bit suspicious since they'd never heard of the offer that was supposed to have built the list. However, no big deal. You see, that list really was hot. After all, it contained only multi-buyers and, therefore, it worked like crazy for a lot of mailers.

Clete's larcenous little heart just loved this kind of action. I mean, just imagine. In some cases he was renting names back to the same people from whom he'd stolen them!

But there was more to come. Clete decided to become the very best list thief in history. He purchased a controlling interest in the service bureau that was doing all his computer work and then, using a couple of his friends as a front, he set himself up in the list management and list brokerage business.

Here's how Clete works today: Every time any kind of list tape passes through his service bureau for any reason whatsoever, that mag tape gets duped. All those duped tapes are then run off against each other on a structured, orderly basis and then, whenever there is a match, in other words, when a certain name and address appears on more than one list, that name becomes Clete's property.

And what does Ol' Clete do with these names? It's very simple. Whenever he has a proprietary promotion that will work to these names, he mails it. And, when he doesn't, he'll create a mag tape out of some of them, create a phony list card to describe the names and then he rents them to the industry.

And wow, did Clete ever get sophisticated at this kind of stuff!

Check this out: In Washington D.C. there is a government agency called the Federal Election Commission. It is the job of this agency (FEC) to keep politicians honest (hyuk, hyuk) and elections clean; to minimize the control exerted by lobbyists, fat cats, and political action committees. It is mandated by federal law that all elected federal officials must give the FEC the name and the address of everyone who has contributed money to help them get elected. The amount donated must also be negotiated.

This list is a matter of public record. Everybody has access to it. However, it is illegal to use this list for fund raising or any kind of solicitation to get money to help some politician elected. This list is heavily seeded.

But oh so valuable.

So what is a guy like Clete to do? A guy who realizes the enormous potential of such a file and who is well connected to certain shrewd political hopefuls who know full well the power of direct marketing and the value of such a sweet list. How about this? How about running this file against a really huge file of compiled names like those maintained by Donnelly, Polk, or Metromedia, and looking for telematches?

And then, whenever you get a "hit" (match) you can mail that name with impunity, because, if push comes to shove, you can always say you got that name from the phone book.

Hmn? Has Ol' Clete got any other tricks up his sleeve? You bet! How about "tagging"? Let's say I've got a big list of 10 million names and let's say you rent me your list of 100,000 names which is made up of buyers of porno tapes. What I do, in addition to making that mailing you said I could, is also pass your little file against my big file and every time there is a match, (a "hit"), I tag the name on my file with that little bit of extra info that "tags" my guy as a lover of porno.

Does Clete know any other tricks? What? Are you kidding? Clete has a bushel of them and he comes up with new ones almost daily! I've hardly scratched the surface and I don't pretend to know them all. In fact, to tell the truth, I bet I don't know even 10% of Clete's tricks!

And he seems to be in the process of living happily ever after.

Who is Clete? Actually, he's a composite. There are any number (more than you would ever guess) of Cletes throughout our industry. Truly. There really are many service bureaus that automatically dupe and retain a copy of every file they receive. Do you know what that means? Do you fully understand the ramifications of what I've been trying to tell you here?

Listen. If you are actively engaged in direct marketing, your customer list is by far the most valuable asset your company will ever have. You know, I realized I could have told "Clete's story" in fewer words. However, I decided it was worth the risk of being criticized for being garrulous in order to drive home my point which is...

Mailing Lists Are Routinely Being Stolen Everyday!

Don't let it happen to you. Your customer list is the life blood of your company. Here are the ABC's of how to protect it:

#A. "Salt" your lists with a lot of decoy names. I know. I know. This advice is old hat. But the key words here are "a lot". Believe it or not, under today's conditions, if you have a customer list of 100,000 names, your list should contain no fewer than fifty decoy names. That's right. One out of every 2,000 names you send out for rental should be a decoy. Not only that, you should be systematically adding new decoy names at least once every month.

Here's an easy way to do this. Let's say your middle name is Clifford. O.K. then what you do is you ask permission of your friends and associates to use their last names and their addresses as part of your decoy system. Let's say you have a friend named Baker. Well, what you do is you make an arrangement with him to give you every piece of mail that arrives at his home or place of business that is addressed to "Clifford Baker". Do this with lots of people (as long as their first name isn't Clifford) and then have your service bureau make all those Cliffords (Clifford Baker, Clifford Halbert, Clifford Adams, etc.) part or your customer file.

And then, watch all that mail that goes to all those Cliffords "like a hawk."

By the way, you may also want to contact the U.S. Monitor Service (914-634-1331) and ask them about their mail decoy service. In addition, it may be worthwhile to check your phone book under "mailing receiving services" for the names of companies that rent private mail boxes.

#B. The next thing you should do, after you've liberally salted your own customer file, is you should salt the files of all of your competitors. It's easy. You do this by using a decoy name and becoming one of their customers. Now obviously, you can't always know when you get a mailing from one of your competitor's competitors if the second guy did or did not in fact rent the list. However, if your decoy name starts getting battered by mailings from one particular company, you might want to phone whomever owns the list you have decoyed and tell him you are getting a lot of mail from "Clete's Handicapping Service" and see if he has been renting his list all that much to Clete.

By the way, if you are actively engaged in direct marketing, you should make some sort of mail order purchase every month from every one of your competitors PLUS you should be one of the customers on every file you rent with any regularity whatsoever. You know, it never ceases to amaze me how few people do this. It's the cheapest market research you can buy. Just think: For a couple of hundred dollars a month, even a huge multi-million dollar company can know just about everything their competitors are doing!

#C. Become known as a "junkyard dog" when it comes to protecting your list. Let people know your list is liberally salted. Let people know you will actively pursue anybody you even suspect of pilfering your list. Every time you send out a mag tape, also send a letter that says in effect "DON'T YOU DARE COPY THIS LIST. DON'T EVEN DREAM OF STEALING THESE NAMES!" Then tell them who your attorney is (mine is Sid Vicious) and tell them how he gets paid a bonus for biting off the kneecaps of list thieves. And so on.

By the way, get yourself a copy of the list rental agreement you have to sign if you want to rent the Wall Street Journal or Barron's subscriber list. Now there's the way a rental agreement should look.

I'm sure you get the idea.

You know, I'm fearful this issue of my newsletter was not as interesting as some of the others. This time, I think some of the points may have been too obvious and old hat for many of you. I'm sorry if that's the case. However, if this elementary info helps save even one subscriber from falling victim to Ol' Clete, then maybe it was worthwhile.

And anyway, maybe I'll make it up to you next month by writing about something complicated.

   Gary C. Halbert
"The Sunset Scribe"


P.S. Would you like to hire me to help you improve your DM packages? If so you should call me right away, because, for a very brief period of time, I can now "be had" by my subscribers on a very favorable basis. Ask me why.

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Copyright © 2003 Gary C. Halbert.  All Rights Reserved.