HCI Direct’s Karen Arbegast on Retention and Redefinition

Target Marketing: How has HCI reshaped its approach to customer retention over the past few years?
Karen Arbegast: The biggest opportunity we saw was to focus on the customer and the customer’s needs—particularly in the continuity environment, where so often customers feel like they’re having things forced on them. We wanted to redefine what a continuity program is, to focus on service to the customer, putting her in control and meeting her needs.

TM: What have been the most important changes to the Silkies continuity program?
KA: Before, if a customer wanted to change her account, we used mail correspondence as a way to have that dialogue. What we’ve done over the past several years is … allow [customers] to manage their accounts online.

[Also], they’ve always been able to correspond with us [via] phone, but [now] we’ve expanded our hours—from 8:30 a.m. to 6:30 p.m. to 8 a.m. to 9 p.m.—and as of Sept. 1, we introduced an interactive voice response (IVR) system, so that they can have 24/7 service, as well. We’ve allowed them to have access to us through whatever channel they prefer: mail, phone, e-mail or the Web.

Additionally, [customers] could always choose the styles they wanted, however, they were limited to choosing between four pairs and six pairs [of hose], and they got [them] on a regular schedule, every month. Now they can choose whatever style they want, and choose anywhere between four pairs and 12 pairs. They [also] now tell us when they want their hose delivered.

TM: What key initiatives have you implemented in the past year?
KA: In this past year, [we] introduced a lot of new products to the service that meet more of [the customers’] current needs. For instance, this past January 2006 we introduced a shaping, non-hose product to the service, our Shaper Shortz, because shaping products are one of the areas of real growth in the hosiery market.

In April, [we] added a product called 65°f UltraSheer Pantyhose, which helps keep your legs cool during the summer. Again, that’s been very successful and chances are next year we’ll offer that as a lead product for new customers coming in.

Just this year alone we’ve added five new products. That’s a huge difference—the aggressive nature of constantly giving her new choices and meeting her needs today.

TM: How has your program benefitted from these changes?
KA: Our retention rates have increased year over year. This has been one of our big success stories. And I’m talking about an industry that’s been declining due to the casualization of the workplace. Being able to improve retention was our focal point. That’s where you make your money, by keeping customers. This past year, once again, we’ve made tremendous changes and, pretty much over all, have seen solid improvement over the prior year.

TM: How do you plan to grow the Silkies brand in the coming year?
KA: It’s really a very exciting time as we’ve redefined ourselves as a direct marketing company servicing women, as opposed to a hosiery company. We just launched our Silkies Enriche Skin Care Service. We did a test mailing last September and the results were very good. We did another mailing in February and we just did a big mailing in June [which] exceeded our expectations by 20 percent. We’re going to do another mailing in October, and in January we intend to do a big blowout. [The offer] is a free one ounce sample of our Ageless moisturizing cream. We’ve gotten tremendous response, and that’s going to be a huge focal point for us in 2007. This will be an entirely separate continuity service. We did extensive quantitative and qualitative research over a two year period that said this is what our customers and this consumer group really want.

This interview appeared in the October 2006 issue of Target Marketing.