Turning a Business Model Upside Down - 1
Best of all, the vodka anesthetized the perpetual pain in my gut.
The major club under my aegis was Family Book Service with 350,000 members. They were offered books on cooking, decorating and home health guides. It generated the lion's share of revenue and was responsible for the big losses. It was imperative to turn that sucker around first.
Family Book Service was a "negative option club"—the same model as Book-of-the-Month and Literary Guild. Members received an announcement mailing 15 times a year describing the main selection; alternate titles; and a collection of flyers offering a mishmash of merchandise, other titles and—in late fall—Butterfield Farms fruitcakes, which were delicious.
Included in the mailing was a rejection slip that gave the following choices: (1) Don't ship anything. (2) Ship the Main Selection plus the following alternate(s) and/or merchandise. (3) Ship the following alternates only.
A member who wanted the main selection did nothing, and the book (or two books that made up a dual selection) would be shipped automatically.
If you didn't get instructions into the mail by the deadline, you got the main selection whether you wanted it or not.
For years the club operated on the premise that 70% of the members would accept the main selection. When the club had 150,000 members, the print order for main selections was routinely 115,000 copies.
The Sweepstakes Miracle
My predecessor was Andy Svenson, a veteran marketer out of Doubleday, Weekly Reader, and Fuller & Dees. Svenson determined that the way to build the club was with an "Everybody Wins!" sweepstakes—a grand prize of $100,000, lesser prizes of cash and cars, and, for everyone who entered, a spice cookbook as a consolation prize.
The sweeps promotions were a huge success—adding 200,000 new members to the existing 150,000—and Svenson was a hero to Meredith management. With 70% of 350,000 members expected to accept the main selection, the print orders were upped to 265,000 copies.