DATATRADE is Hong Kong's one-stop shop for direct mail. The company says it has a million names on its lists, making it the industry leader. 'All clients need is to get an agency to design the brochures. We can take care of the rest,' said managing director Lilian Salenius. 'The rest' refers to letter shopping, which involves companies sending out many letters to the public in the hope of a favourable response - a one per cent response rate is considered the break-even point. Datatrade had the capability to handle brochure design work but clients generally supplied their own. Response letters or calls - the 'fulfilment' phase of the operation - could be directed to either the client or Datatrade. Ms Salenius said mail services had proved to be an ideal promotional tool. 'The economy here is not that buoyant. Restaurants are closing but our turnover has doubled in the first quarter compared with last year,' she said. 'If you have a product you have to promote, TV and newspapers are expensive and you can't measure the response rate, so direct mail becomes an effective tool of marketing.' She said the majority of clients who rented name lists from Datatrade wanted the company to carry out the letter shopping for them as well. Slightly less than half also opted for the fulfilment service. And the response? 'Eighty per cent of clients are happy,' Ms Salenius said. 'If you don't get one per cent, either the product or the pricing is wrong. We have clients whose response has been as high as 12 per cent.' Clients can often improve their response rate by increasing their investment. For example, laser printing can increase responses by 30 per cent. 'You definitely should use laser for luxury products. We use it for our own newsletters. Customers feel comfortable with it and read longer, so they respond better.' With big-ticket items and financial services, direct mail is used to develop a target list of likely customers. Datatrade has been operating since 1983. Its database has grown to a million names in that period, classified under a wide variety of selection criteria. 'When we first started, it took us two years to build up 300,000 names,' Ms Salenius said. 'Building up numbers is not that difficult. You can go to the Post Office and the Government Publishing Centre. 'You can buy lists but they are outdated . . . you can't use them. So, we had to find out their hobbies, what credit cards and cars they have. Do they like tennis or golf.' This building period lasted the first five years. As the industry leader, Datatrade knows its development costs. 'To get a good name costs $10-20 and we cannot charge more than $1.50 per name, so you have to rent the names many times to recover costs,' Ms Salenius said. In transient Hong Kong, active lists can quickly become outdated. 'We use our names frequently and have big users, so we can update the lists quite easily by getting the dead mail.' Newspaper appointment columns are also monitored for changing business addresses. In most client applications, the client rents the list from Datatrade which does the letter shopping and therefore controls the list. The issue of security only comes up when the client controls the list. List owners like Datatrade protect their rights by including fake names on the lists which warn of misuse. Most of Datatrade's clients are multinationals, with about 10,000 letters being the minimum order size. Among its clients are United States companies which print in China and mail throughout Asia from Hong Kong. Although the Chinese postal service is relatively efficient, clients hesitate to use it for image reasons. The letter shopping part of the business is not a profit centre but used to support the more lucrative list rental side. Most clients prefer the convenience of having everything done for them. Datatrade could also handle fax marketing. But consumer resistance to this form of marketing was strong. Ms Salenius said: 'We have dissuaded our customers from using fax marketing because it can be so unwelcome you ruin the client's name.' There was also a lot of resistance in Hong Kong to marketing by telephone. Datatrade had resisted offers of payment as a percentage of sales generated in its campaigns. 'We want clients to use us happily. We don't want to run into conflict with clients and [the commission system would be] more difficult to monitor. Many clients try, especially small clients. They want to cut down expenses but, in 99.9 per cent of cases, we turn them away,' Ms Salenius said. Datatrade believes the boom in direct mail business in the first quarter is because of the comparative cost of other forms of advertising. Ms Salenius said the slowdown in the economy had increased pressure on marketing people to achieve measurable results. 'Advertising budgets are smaller. During a bad economy, direct mail could boom. You have to promote and how do you do it with a limited budget? Direct mail is the most cost-effective and you can measure the response,' Ms Salenius said. Direct mail also offered excellent test marketing opportunities to a designated part of a particular list, she said. 'Flagging' names, or mailing to part of a group which was then removed ['de-duped'] from a later mailing, was a popular technique. 'Direct mail is a scientific promotion method. You can see who you are sending to, what area, what classification, what age group, and the response from groups A, B, C,' Ms Salenius said. She also is a member of the international advisory board of the US Direct Mail and Marketing Association. 'The US is really the country that pushed direct marketing; that is why I go to the conference every year,' she said.