Think Different

Years ago I oversaw a very successful continuity program.  It was the company’s most profitable program but it had been in steady decline for many years, with the annual enrollment of members shrinking each year.  The overall annual margin for the program was $X, which was one of the higher margin amounts of any of the companies programs.  The margin had been calculated using the same basic formula each year.  However, but by looking at the margin with a slightly longer viewpoint I was able to justified an increased margin of $1.5X.

Once enrolled in the program, the retention rate for the program was extremely high.  In addition, 40% of customers in one year would enroll the next year, and 8% of customers would skip one year but enroll the next.  Obviously the lifetime value of customers once they enrolled in the program was extremely high and once enrolled, it was relatively inexpensive to enroll them in future editions.

The 50% increase in the allowable, permitted us to mail deeper on internal lists as well as deeper on outside lists for an incremental investment that was recouped in less than an additional year.  The enrollment in the program, which had been shrinking each year for the prior several years, was increased by 40% and overall profitability of the program was increased for years to come.