Hitmetrix - User behavior analytics & recording

Thanks to a Penny, a ‘Business That I Could Grow to Love’

I read with interest Tad Clarke’s recent editorial regarding the source of the 12 CDs for a penny offer (“The Power of a Penny,” May 16). It brought a smile to my face as it was one of the first offer analyses that I worked on when I joined the management sciences department of Columbia House as an analyst in the mid-’70s. And your information must be from a good source!

The offer at the time, as I recall, was 10 or so CDs for $1 plus 86 cents shipping and handling versus the same number of CDs for 1 penny plus $1.85 S&H. The response rate improvement was 20 percent to 30 percent despite the fact that the member wrote a check for exactly $1.86 in either case. As a person who loves math, I knew then and there that this was a business that I could grow to love. This offer evolved into the 12 CDs for a penny that survives today.

Like all successful promotions, I am sure that many should be credited with the idea. But it is worthy of note that when I arrived at Columbia House, I was blessed to work with some of the best. Surely Neil Keating, Ben Ordover, Peter Rabar, Lester Wunderman and many others can lay claim to this offer and the numerous innovations that Columbia House brought to market over its 50-year history.

Lastly, I agree with Clarke’s assessment that while downloading is an important new channel for content owners, the distribution of physical goods is still a primary market with many prosperous years ahead.

Brian Wood, President, The Columbia House Company

[email protected]

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