DMNEWS article published today:
dmnews.com
Thursday, March 23, 2000
*Shopping Club To Bow Bold Campaign
By: Mark Hamstra, Senior Editor
HouseHoldDirect.com, a new online membership club offering discounts on several products and services, is gearing up to roll out a national telemarketing effort as part of a $4 million advertising campaign to drive people to its Web site.
The New York company, which has about 1,500 members but has set a goal of enlisting 1 million members by the end of the year, also is planning direct mail campaigns and this week launched an online banner advertising campaign.
To implement its telemarketing effort, which launches in a few markets in about six weeks, the company will open a 300-seat call center in Cedar Grove, NJ, that will handle inbound and outbound calls. It will supplement the telemarketing effort by contracting with outsourced telesales providers. The company also plans to use Spanish-language telemarketing, according to John Folger, CEO of HouseHoldDirect.com.
?Within about four to six months, we should have enough systems in place so that we can contact every qualified consumer in the country,? he said.
Direct mail targeting about 30,000 consumers in the Atlanta and Birmingham, AL, markets, where HouseHoldDirect operates bricks-and-mortar showrooms, also will drop in about six weeks. The company also will market heavily in the New York metropolitan area, Folger said.
The company said it expects to bulk up its membership base significantly in the coming weeks through agreements with other buying clubs that are transferring their members to HouseHoldDirect. Folger declined to reveal which membership clubs were doing so, saying the contracts for the deals had not yet been signed.
In addition to offering discounts on such fare as watches, appliances and car rentals, all of which are offered on the site to club members, HouseHoldDirect is planning to add long-distance telephone service, Internet access, calling cards and other teleservices products at discounted rates to members.
The products also could be offered as free incentives to entice people to join the club, which costs $49.95 to enroll in and $9.95 per month thereafter.
?The way we view it is that long-distance service is another justification for a relationship with a consumer,? Folger said. ?If they buy long distance, then we have the opportunity to add a membership relationship, and vice versa. Our entire business focus is to develop a relationship with consumers on as many levels as possible.?
Folger estimated that the initial customer acquisition costs would be about $45 to $50 per member.
Meanwhile, the company also is gearing up to relaunch its site this summer with enhanced customer-service features. Folger said the company has had strong initial response from a live-text-chat feature on its Web site that automatically appears a few seconds after a surfer lands on the site. A message that looks like a text-chat window with a greeting from an agent is actually a link into the company?s live customer support center, which is handled by Quality Assurance, a third-party customer service provider.
When the feature was first launched in January, about 80 percent of the site?s visitors were clicking on the chat box, Folger said. Current figures were not immediately available. When the site is relaunched this summer, the initial message in the text box will be tailored based on the individual visitor. Voice-over Internet-protocol services also will be offered, he said.
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