The Shrewd Dude for whom I worked (yes, he actually called himself that, but let’s call him Jason, since he was definitely searching for a Golden Fleece) handed me a data tape one day, the usual n Track, n BPI thing.
"Yeah?" I asked.
"Hot list," he said.
My pupils dilated a little, I think. A hot list can mean a variety of different things in the direct mail business, but to Jason – and to me – it meant that everyone on the list was a dumkopf. The kind of people who would buy a brick through the mail if you promise that it will be personalized in imitation faux eight carat gold.
"And I should…?"
"Get what’s on the tape into the postcard ink jet machine."
"Okay," I say. "What’s the tape like?"
"What do you mean? It’s a tape…" Jason was not computer literate, even though he thought he was.
"What encoding?" I ask. "What data-record structure?"
He shrugged. "Just names and addresses and phone numbers," he told me. Then he smiled. "I had to squeeze my guy pretty hard, but I got the list in zip code order." He then went into great detail, telling me how badly the guy didn’t want to do it. He grinned again and again, very pleased with himself – Jason is the kind of guy who counts coup in all things.
"You threatened his wife?" I finally asked just to make sure I understood.
"Hey – Atalanta is in the biz too – I’m sure she’ll understand."
I didn’t understand. But then, I was a noob to direct mail, and though I was already infected with dreams of fancy cars, coke, and the hooker hotels on Wilshire Boulevard, I was, to guys like Jason, just a geek – not a real boiler room person. I got why Jason was proud, though – our ink jetter could box and bundle postcards if the source list was sorted by zip, which would save us money – a penny per postcard discount if the post office got them pre-sorted.
When you mail a hundred thousand cards a week, that penny matters.
"Jason," I said, "how truly shrewd you are." I myself was shrewd enough to know how much stroking my boss needed.
"You do what you gotta do," he said, looking like he wanted to salute something. This expression always sounded cryptic and nonsensical to me, but it was the slogan he lived by.
"I’ll get right on it," I finished.
I did too. Not an hour later, I picked up a case of Anchor Steam and drove my ridiculously bright green Datsun B210 to my friend Nestor’s house. Nestor was a bank branch manager, and had his own DEC Vax with an attached tape drive. He would often let me use it, if I brought a few appropriate emoluments – Anchor Steam, for example – and an interesting problem. Nestor did "reinsurance cones" on his Vax, mostly for oil tankers with Panamanian registry. He made unspeakable amounts of money and was probably responsible for the extinction of several dozen species.
So – after a few beers, some talk, a joint or two, and some music (he was a drummer with a tentative sense of rhythm, but very tolerant of a guitarist like me with a tentative sense of the pentatonic blues scale), I had the tape spun up on the Vax’s humongous tape drive, and after a few abortive attempts, got a look at the data.
I didn’t know who sourced Jason’s list, but I knew right away it was a hacker tape. There were about ten thousand records, and each record was a different length, with the first nine characters being a zipcode. I printed out a few hundred records using Nestor’s line printer, just to help me get a sculptural sense of the data.
"That," said Nestor, looking over my shoulder, "is a mess."
"Fucking Jason," I muttered. "He really screwed the pooch here. It’s all sorted by zipcode, sure, but nothing after the zip conforms to any record pattern." Jason’s "hot list" was compiled from dozens – maybe many dozens – of different lists.
"Your boss really expects you to clean that shit up?" Nestor asked.
"Crap," I said, as I look it over. "it’s all different formats. Some records got a name field 35 characters long, some got first and last name fields, some got two address lines, some three, some one…"
"The stuff is garbage," said Nestor, downing another beer and tapping on his guitar.
I called Jason up. Nestor hit the speakerphone button just as the call connected, so he could listen in.
"That tape of yours?" I told Jason. "It’s garbage. The stuff is in umpteen zillion formats, and that zipcode sort means that all those formats are mixed together. Impossible to straighten out. Get your guy to regen the tape."
He hit the roof.
"You know what I had to go through to get that!?" He screamed.
"I think so," I said. "You told Telemon you’d disembowel his wife."
"Not that," he said, dismissing this chilling threat as incidental. "That was just fucking around."
Then he let slip the truth – what he’d kept on the down-low when he first told the story: his strong-arming meant he could never speak to Telemon again – this was a one time deal, caveat emptor.
"Look Jason, I get it now, but come on – it’s only, like, ten thousand names – even if every one is a home run, it’s just a blip on the bottom line. Why you so upset?"
"That tape is just a sample," he said.
"It’s – what?"
"That’s not the entire dataset," he told me.
"How many tapes," I ask, dreading the answer.
Nestor started laughing.
"How can you not be sure?"
"Well, the tapes – they’re in boxes."
"Boxes? Like small boxes? Give me an estimate," I said.
"Not small. Cartons, really," he said, "there are five cartons of tape."
"How big are the cartons?" I asked.
"Pretty big," he admitted.
I sighed. "How much did they cost us," I asked.
Jason brightened up. "That’s the good part," he said. "I got ’em for a penny each. Ten dollars a thousand names, and they’re all cherry – every one of ’em is a repeater with a sale north of a hundred bucks in the last three months."
"Fuck," I breathe. Even Nestor is nodding, though he wasn’t really in the direct mail biz. Hot name lists are worth a lot, you see. Repeaters are compulsive buyers, and they are gold, and people who have bought something recently are more inclined to buy again. Even Nestor understood what a good price Jason got. A list of the calibre he was describing could easily cost three hundred dollars a thousand, not ten.
"Jason," I finally asked, "how much money did you give this guy?"
"Ten grand," he said. Ten grand at a penny a name is a million names.
Nestor started laughing again. "I’m going to start calling you Tantalus," he said. I covered the pickup so Jason couldn’t hear him, but Tantalus – the guy for whom everything that mattered was just beyond reach – was just about right, as a nickname: a million names of proven buyers, but in garbage format. A direct mail fortune at our fingertips, but incomprehensibly jumbled.
In the sleazy mail order and phone room business, your lists are your life. Very Hot Lists can sell for $2.50 a name to phone rooms. At that rate, a week’s worth of names for the average phone room (about ten thousand records) is worth twenty-five thousand bucks, and people would kill you for a lot less. When we were doing phone rooms, I carried a .32 Beretta in the same briefcase as our "customers". I never used it, but I knew people who had.
With mail order, the list is even more important. In a good promotion, for every thousand mailers out the door, you’ll get one hundred back, and of those hundred, maybe ten will turn into a sale. So ten sales have to pay for a thousand offers. A cold list will kill your business. Understand, it doesn’t much matter what you’re selling, the same figures will apply.
Our usual promotion had fixed costs per thousand of about $150, mostly the two big Ps: printing and postage. So the average ten sales per thousand names had to each make fifteen bucks over product cost, shipping and handling (which varied for every promotion) before we could start thinking about profit.
Name list cost is not a fixed cost. It varies just like product cost. A name list usually adds significantly to your variable cost, and once you fold in the cost of your list, that fifteen bucks over product rapidly shoots up.
No mail order outfit pays $2.50 per name like the phone rooms do, but thirty cents a name is common; a million thirty cent names is a quarter mil if you buy in bulk, plus, the legit lists are sold for one-time use, with ringers buried in the mix to keep you from remailing to the same people. With thirty cent names, you’re adding three hundred dollars more in overhead per thousand mailers, thirty dollars more overhead per sale. Combined with the fixed costs, forty-five bucks are overhead per sale; you have to make forty-five dollars over cost on every sale just to break even.
Cold lists are a lot cheaper, but cold lists are hard work and more expense per sale. And even cold lists don’t often go for as little as ten dollars a thousand.
The names Jason had gotten for a penny were, according to him, a Hot List, not the usual. With a hot list, we might get twenty sales for every thousand mailers. With a list like that, fifty cents a name wouldn’t have been an unusual price, and it could go even higher. Direct mail lists are cheaper than phone lists, but a million names would still be worth a lot. A hot million names… well, we could die. Easily.
I looked at Nestor, who shook his head in sad acknowledgement of what I was thinking, and then made a zipping motion over his lips.
"You got the picture now?" Jason asked.
I got the picture, alright. We could save ourselves hundreds of thousands of dollars, if I could straighten out the stupid list.
"I get it," I said. "We got a million dollar list for chump change."
"That’s right. And a big part of that differential," Jason hinted, "could be yours. Just get it working."
I began to see things his way.