Silkies, the hosiery continuity club that uses both insert media and direct mail, was able to stem the churn rate of customers by reworking its business model and approach.
So said Pat Corpora, CEO of HCI Direct, in the opening keynote address at the third annual Direct Marketing Association Insert Media Day at the Marquis Hotel in New York.
About two years ago, when Corpora had come aboard at HCI Direct--Silkies' parent firm—the company's continuity division had lost about 25% of its customers and continuity clubs in general were losing popularity.
Part of this had to do with the fact that hosiery had become less fashionable than in prior years since more women were wearing pants more often and therefore had less need for steady monthly automatic shipments of hosiery.
"The customer changed but the program didn't," he said.
This eventually persuaded HCI to make some changes, particularly the areas of customer service and product mix.
Silkies then began offering 14 different styles of hosiery and six different sizes, including knee-highs and socks--more appropriate for today's styles. The firm also chose to let customers have more say in what they received rather than just receiving product on the standard negative option basis.
The company also reworked its rewards program. Previously, it offered such rewards as electric toasters and vacuum cleaners that required huge purchases to qualify for. HCI changed the program around, offering rewards like jewelry for smaller purchases, said Corpora.
"It took a year and a half to change the program," said Corpora.
