May 09, 2009

Co-Ops And Multichannel Merchant

This theme came up at the ACCM conference --- response rates are down on dramatic decreases in circulation.

The concept of a "death spiral" is well known --- cut out prospecting, the business gets smaller, so you cut more, causing the business to get smaller, and next thing you know, you're out of business. It is a concept that the retention experts conveniently leave out when talking about catering to loyal customers.

What is interesting is that it is the co-ops that are dealing with the death spiral. The co-ops destroyed the list industry, and that's fine, America is all about competition and capitalism. But if the data in the article is true (30% drop in co-op names), then you have a whole new set of challenges in the catalog industry --- is there enough business to support all of the co-ops that exist today?

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