There are many good arguments against starting a continuity club: The limited offerings turn consumers off, and auto-ship programs are difficult to operate.
But there is one thing in their favor. They’re profitable when run well, according to Pat Corpora, CEO of Hosiery Corp. And Corpora should know: His firm’s Silkies Made to Order club delivers 10% of all the hosiery sold in the United States, making 10 million shipments to 2 million customers a year.
As Corpora sees it, continuity marketing is an efficient way to spend acquisition dollars. And inventory control is a breeze when merchandise lines consist of 20 or 30 products that are shipped at regular intervals.
But Silkies had a run in its stockings. It experienced a 40% decline in revenue, largely the result of rigid marketing structures and a product line that hadn’t changed with the times.
What did it do?
First, Silkies’ operating team adjusted the 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 knee-highs, reflecting a female population that was increasingly wearing pants.
The unit also changed its marketing strategies. While it still used the word
