By all rights, a continuity club is anathema to customer-centric marketing. First, with the explosion of goods available online, trying to force consumers to take delivery of a rigid menu of goods is a hard sell. Consumers are increasingly aware of being in control – and they don’t like it when they’re not.
Second, they are not easy to develop and run. “There has to be a reason for the program to exist,” said Pat Corpora, president and CEO of Hosiery Corp., which operates the Silkies Made to Order, a hosiery continuity club.
And finally, “They are a lighting rod for legal actions,” said Corpora, who noted that marketing a club can lead to confusion between consumers who believe they are taking advantage of a wonderful offer, and marketers who hide the terms of the continuity program in the fine print of their offers.
So why bother with them? Because auto-ship programs are very profitable when run well, according to Corpora, and continuity marketing is among the most efficient use of acquisition dollars. And inventory control is incredibly efficient when merchandise lines consists of 20 or 30 products that are shipped at regular intervals.
Silkies is one such business. It delivers 10% of all the hosiery sold, to two million customers a year. It sends out 40 million pieces of mail, and 10 million shipments, every year.
But it hasn’t always been so. The company had to, if not pull itself up by its bootstraps, at least adjust the seams in its stockings. Not long ago it had experienced a 40% decline in revenue, attributed largely to rigid marketing structures and a product line that had not changed with the times.
Silkies did adjust its merchandise mix, bringing in a wider variety of colors, fabrics and styles. From a heavy reliance on control-top hose, it branched out to include shapers, plus-size offerings, and even knee-highs, reflecting a female population that was increasingly wearing slacks and pants.
But its marketing strategies change as well. Offers still rely heavily on the word “free,” but they are much clearer about the terms of the continuity club.
“One of our inalienable rights as DMers is to use the word free,” Corpora said. “Make sure we have all of the disclosures everywhere, but being able to bring people in with free offer is very powerful.”
Silkies matched that right with responsibility. The company revamped its continuity program so that changing styles, delivery frequency and quantities shipped was easy. It also expanded access to the company, hired additional customer service staff, promoted an inbound call center number and launched Silkies.com. These changes allow customers to easily change the frequency of deliver or even temporarily suspend their accounts, and alter the mix of products they receive.
Silkies’ efforts transformed the program from a burden to a service with customers in control, Corpora said. As a result, it currently boasts 300,000 customers who have paid for more than 20 orders – and once they’ve taken delivery of that many orders, they tend to continue at a rate of 97%.
Copora spoke at the Direct Media Mailer Conference and Co-op on Wednesday.
