Columbia House Changes Music Club Strategy
Abandoning its cornerstone negative-option ordering process, Columbia House, New York, has overhauled its music club business with the introduction of Play.The club, which is supported through 30- and 60-second spots created by Wunderman Cato Johnson, New York, debuts a new Web site (www.playfromcolumbiahouse.com), eliminates ordering cards and introduces a novel concept to customer service -- customers get only what they pay for.
The company has long operated on a negative-option platform, which over the years has resulted in increased returns. In the past, it automatically forwarded company-selected tracks to customers who did not return a postcard by a certain date stating otherwise.
"Customers will never receive anything they didn't order [with Play]. That is a major development in the club business," said Sharon Kuroki, executive vice president of music marketing. "Negative option has been around since Book of the Month invented it in the 1920s -- but when half of your customers send back what you send them, something has changed."
Indeed, Columbia House and other music clubs have seen membership fall off from their peak periods in the mid-90s, when catalog replacement reached a saturation in the marketplace.
"Returns were very high over recent years," Kuroki said. "The market has changed from the good old days of CD introduction, where people were replacing product and there wasn't a resistance to negative option that we have seen of late. People learned how to return product and did so more frequently than ever."
The company dropped its first mailer behind Play last week, introducing the new elements of the club that include a membership card, the Web site, toll-free number and a magazine. The company issues 18 mailers annually and supports an estimated 8 million members.
