His anodyne to parenting in this age of choice anxiety? A panoply of services and discounts:
* Workshops. The network's live events offered locally on a monthly or bimonthly basis would address topics ranging from discipline and building self-esteem to child nutrition and safety. Interactive, and led by experts, the workshops would function as chapter meetings that could be underwritten by sponsors, who would demonstrate products and intersperse commercial messages during the two-hour-long sessions. The prefabricated workshops, delivered according to standard curricula, could be easily transplanted to other regions as the network expanded.
* A buying club. The company would extend a discount buying club to members, whereby price-sensitive parents could receive 10% to 30% off merchandise or services at participating businesses.
* Merchandise. A catalog of more than 300 mom-and-baby products would provide even more convenient shopping for members and yet another profit center for the company. By Silver's original design the catalog would entice discount shoppers and pull in 40% of the company's revenues. When it failed to do either, he later abandoned it.
* A newsletter. Titled "Mom," the bimonthly publication would grow from an eight-page black-and-white newsletter to a four-color magazine over three years. It would feature practical advice and regular columns on parenting topics, calendar listings of relevant regional events, member profiles, and question-and-answer columns.
* A resource bank. Because of time constraints -- more than half of all mothers with children under the age of one now worked outside the home -- parents needed to find resources quickly and efficiently. Mothers' Network would publish a directory -- a yellow pages for parents -- listing child-care centers, health-care providers, and retailers, among others. Paid for by advertisers, it would be updated quarterly.
Eventually, as membership grew, Silver hoped to offer big-ticket benefits such as insurance coverage, pharmacy discounts, and travel discounts. But to have a prayer of persuading a large insurer to extend group rates, he'd have to show a critical mass of members first. When that happened he might receive kickbacks of a point or two on premiums to a third-party provider. In the meantime, revenues would come from membership fees, meeting fees ($5 to $6 per person), and ad revenues. After early tests showed no resistance to a $35 membership fee, he raised the price from $25. (Later, actual response rates would persuade him to reduce it to $29.95.) His combination of benefits appeared to work at that price point: 7 out of 10 prospects signed on.
In the first year, the association signed up 300 members in metropolitan New York. By 1992 Silver counted 2,300.
* * *
The Marketing Strategy
Silver's marketing strategy, through various iterations, honored one commandment: Thou shalt recruit members. With scant capital, that meant reaching prospects through a medley of grass-roots, even guerrilla, tactics.
* Members. The trick is to get them coming out of the delivery room, then keep them for a decade or so. But forced to recruit on a bootstrapper's budget, Silver had to restrict marketing costs to $9 a member if he was to turn a marginal profit. He also needed to keep renewal rates high enough to amortize that cost over the lifetime of a membership.
* Direct sales. The best and cheapest way to lure members, Silver initially figured, was through mothers themselves. "Mothers tend to trust other mothers. Their buying decisions are heavily influenced by one another," he says. He would recruit a direct sales force of mothers -- "consultants" -- to work each of eight New York City-area territories. Unfortunately, at the price points Silver sold memberships and, later, merchandise for, there was too little margin built in to pay anything but paltry commissions. Turnover was high. And the company wasn't exactly hurtling toward the 100,000-member mark, the milestone needed to impress national marketers and insurance carriers.
* Professional endorsements. To gain credibility (and members at a lower cost), he began marketing through perinatal professionals. Targeting pediatricians, obstetricians, and childbirth educators, the company circulated brochures in more than 100 doctors' offices, gaining exposure to some 15,000 prospective members in metropolitan New York. "But we couldn't rely on doctors to sell aggressively for us," he says. He formed an advisory board of professionals, who were paid to lend their advice and their imprimaturs to the company.
* Public relations. Coverage in the New York Times and on Cable News Network got the phones ringing and brought in a wave of new members, but media attention was fickle, and stories were sporadic.
* Co-marketing. The company persuaded retailers and service providers in the New York metropolitan region to distribute brochures and membership applications, à la Visa or American Express, in point-of-purchase, take-one displays. The response was anemic. But Silver is undaunted. "We have to rely on allied businesses to market nationally," he says. "It lowers the cost of reaching new members and reduces the risk of going into new markets." He is pursuing cross-promotion deals with large packaged-goods companies. He also hopes to barter with allied businesses willing to host (that is, provide space for) network meetings in other regions.
