Provell, Inc., a Minneapolis-based membership marketer, signed nearly 1 million new members during the second quarter, compared with 60,000 last year. However, there was a cost.
The company sustained a net operating loss of $6.3 million, compared with operating income of $9.6 million for the same period in 2000. The loss was due mostly to aggressive acquisition marketing, and higher commission structures for names.
"Not surprisingly, we still have a lot of work yet to be done," said CEO George S. Richards in a statement. "We have made outstanding progress on reducing our average acquisition cost per name, a 35% reduction quarter-over-quarter this year, and on maintaining improved renewal related during a quarter in which our weighted average membership fee rose to $82."
Richards also acknowledged that cash flow was hurt by "additional reserve levels required by our payment processor and card associations, and to changes in payment settlement and business processes at several clients as we assist them in their efforts to comply with the Gramm-Leach-Bliley Act."
The firm reported second-quarter revenue $75.5 million, compared with $51 million during the same period last year. Net revenue was $34.8 million, compared with $34 million in the second quarter of 2000.
The firm experienced a net operating loss was $6.3 million compared with income of $9.6 million last year.
Provell also revealed that Swiss Colony had signed on for tests, and that discussions are under way with Fingerhut.
