DIRECT & DATABASE: CASE STUDY: MUSIC CLUBS TRY NEW PITCH IN MAILINGS TO EX-MEMBERS

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Two major music clubs, watching their segment's share of the music market slip as stores' share rose, are sending a new kind of appeal to win back ex-members.

Gone are the traditional club structure and the "negative option selling" traditionally favored by the music clubs.

"No more cards to return! No automatic shipments!" Columbia House promises in a mailer sent out to former members, along with an apology: "We're sorry, but we're learning . . ." Rival BMG's mailer says: "Take unlimited CDs for as little as $1.99!" and promises, "There's no club to join."

"What they've found is their margins have gone flat," said one industry source. "They're stretching the envelope to find ways to retain customers."

Columbia House's mailer was developed by Cooper Direct, New York; BMG handled its mailing in-house. Representatives from both companies did not return calls.

Timing is another factor working against the music clubs.

"The resurgence of the club business took place primarily from 1988 to 1994," when people were replacing vinyl with CDs, said Joe Rapolla, VP-market research at Polygram Group Distribution, explaining that now, "people have for the most part restocked and updated their library of music."

Both BMG and Columbia House continue to hit potential new members with the negative option selling strategy -- in which a customer must tell the company not to send product or else it automatically ends up on their doorstep.

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