**Spiegel Catalog Achieved Turnaround by Listening to Customers

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NEW ORLEANS -- Not even catalog giants, those that have been in the industry for decades, are immune to declining sales or customer defections.

John Irvin, Spiegel's catalog CEO, knows this all too well. Faced with nearly a 50 percent decrease in sales from 1995 to 1998 and a 45 percent drop in circulation, Irvin and his team of marketing executives had to figure out how to turn the struggling catalog around. Irvin told the story of that turnaround yesterday at the Direct Marketing Association's 83rd Annual Conference and Exhibition here.

Using a slide presentation to showcase Spiegel's century-long history in the direct marketing industry, Irvin weaved a tale of the catalog's continuing evolution, its struggles in the late '90s, and its eventual turnaround in 1999 that saw an increase in sales and customer growth.

Despite the early start, a crowd of about 100 attended the morning session. "It was a very important talk, something I didn't want to miss," said Henry Swirski, vice president and managing director at J.S. Elizer Associates, a catalog consulting firm in New York. "It gave good insight about what they did, their mistakes and how they were able to turn things around."

The one factor the cataloger had going for it was its name, Irvin said. This would be crucial as the company looked to revamp itself to increase sales and compete more effectively. But its name alone was not going to help; the cataloger implemented a series of steps to reduce targets, slash expenses, cut inventory, and focus more on its e-commerce site to attract new customers and revenue.

But while Spiegel worked to create sales profit plans and reassessed its goals, there was another area the cataloger had to address.

"They didn't deal with the root of our problems," Irvin said. "We had really lost touch with [our] customers. You should be listening harder, and sometimes I think we forget to listen. So we weren't spending a lot of quality time listening to what our customers were telling us."

That changed. Spiegel began placing more emphasis on listening to what customers wanted and began implementing suggestions to better accommodate them.

Spiegel's road to recovery was not without mistakes, Irvin said. In 1998, the company placed too much emphasis on design layout and not enough on selling merchandise. The departure proved critical as sales continued to slump.

For some audience members, Irvin's admission of mistakes was revealing.

"It was good to see that another company, who's had many successes, has similar challenges it has to overcome," said Bob Carreras, vice president at Army & Air Force Exchange Service, Dallas, a cataloger servicing the retail needs of people in the armed forces. "For example, making sure your creative and your merchandizing know their customers. That's a crucial relationship for anyone in the catalog field."

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