Famous Last Words: A Direct Marketing Horror Story
Many years ago, Meredith Book Clubs, headquartered on Long Island, N.Y., lost $250,000—a considerable sum in 1968. I was hired to fix the problem.
The offer was neat—seven mini-cookbooks as a free gift with (as I recall) a four-book commitment and bonus books, just like Book-of-the-Month or Literary Guild.
However, I was stunned to learn many brand new members were canceling before they even received the premiums. It was truly mystifying.
The first thing a new member should have received was the welcome package containing the seven free books; a warm, welcome letter that resold the benefits of the club; and precise instructions on how the negative option system worked.
It turned out that in its zeal to turn members into buying members, the computer department took it upon itself to short-circuit the normal fulfillment process and get the current announcement package into the hands of the new members along with everybody else. This announcement arrived before the welcome kit, and the new member did not have a clue what to do. Since Meredith Book Clubs was a negative option book club, this meant that if the member didn’t return the rejection/do-not-ship slip by a certain date, a book was coming.
The next thing the new member received was an unordered book and an invoice, which created a feeling of being ripped off. The book was returned and the member canceled.
I got into a fight with the old guy who was head of the computer department. He said patronizingly, “Statistically, it doesn’t matter. The money we take in early in the membership more than makes up for the cancellations.”
“It matters to me,” I said. “I will not allow my new members to be treated so shabbily.”
The next step was to find out how long it took for the seven premium books and welcome kit to reach new members, so the negative option process would be understood, and angry customers would stop returning unordered books.
The responses to space ads and direct mail efforts took an average of five days in the mail to reach order processing. These were counted and recorded by key and then entered into the giant computers. At the time, Meredith had the third largest computer setup on Long Island—two IBM 360-65s running tandem.
At the other end of the computer room, labels were printed out, batched and sent by truck to the Chicago warehouse, where they were slapped on the prepackaged welcome kits and sent out via book post. The truck to Chicago, labeling and shipping at the warehouse, and time in transit from the warehouse to the customer would eat up another 15 days. Total at either end: 20 days.
The big question was: How long did it take for the information in order processing to become shipping labels ready for the Chicago-bound truck?
A week later I was handed a slip of paper by the data processing assistant manager: “56 days,” it read.
That 56 days plus 20 days meant the new member had to wait 76 days—or two-and-a-half months!—to receive the acknowledgment and welcome kit. I went nuts.
“I’m telling you that statistically it doesn’t matter,” the data processing (DP) geezer insisted.
I went to the big boss in Des Moines, Iowa, argued my case and changes were made. I won no popularity contests.
When I left, the book clubs were showing a profit. But the computer system was so screwed-up that Meredith moved the book clubs out of Long Island and back to Des Moines. My wife, Peggy, and I didn’t want to go to Des Moines, so I quit, took the winter off and wrote a novel.
It was a year and a half of knots in my stomach and liquid lunches.
Since then, of course, direct marketers—pioneered by catalogers and Jeff Bezos at Amazon—have learned the importance of quick fulfillment.
Who sets your marketing policies? If it’s IT, DP, legal or accounting, you seriously should consider a change.
Otherwise, be prepared to lose customers.
Denny Hatch is a freelance direct marketing consultant and copywriter. Visit him at www.dennyhatch.com, or contact him via e-mail at firstname.lastname@example.org.