In 1951, when I started Lillian Vernon Corp. from the yellow Formica kitchen table in my apartment in Mount Vernon, a suburb of New York City, I spent hours looking at the advertisements in popular women's magazines, such as Seventeen and Vogue. I was trying to figure out what type of products appealed to readers of these magazines.
Eventually, I decided to sell two simple products -- a monogrammed handbag and matching belt for teenagers -- by placing an ad for $495 in Seventeen. From that single ad, I received a response that astounded me: 50 orders! I immediately set about recording the name of each customer on a 3" x 5" index card, as well as other basic information, such as the customer's address and whether he or she placed a repeat order. I kept updating those cards, trying hard to eliminate duplicate names.
I didn't realize it then, but everything I ever needed to know about selling I was learning at my kitchen table: I was learning how to identify, find, and keep customers. In pouring over the ads in the magazines, I was conducting my first exercise in market research, determining whether there would be a demand for the products I wanted to sell. On my index cards, I was keeping a record of just who my buyers were, what types of orders they were placing, and eventually, whether they would continue to buy my products.
In the intervening 47 years, the system I devised has served me well. In 1956, when I launched my first Lillian Vernon catalog, those 50 original names had mushroomed into 125,000, all sound prospects who had made at least one purchase. These days, our company's mailing list comprises in excess of 21 million households nationwide.
Selling as Philosophy
Selling, in short, is the core of any business, no more so than in catalog retailing, where an entrepreneur's relationship is entwined directly with the customer. To sell effectively, entrepreneurs must focus on what I call the crown jewels: those names on the mailing list that you took great effort to develop and must take an even greater effort to keep. About 20% of those names are lost each year; to replace them, you must strive to add more than that 20%. Doing all of this comes down to a mix of the right philosophy and some astute practical considerations.
Let's start with my philosophy. At Lillian Vernon, we believe that the foundation of any mailing list is customer loyalty, which is the result of customers developing a trusting relationship with a company. Trust is established when people -- or a company and its customers -- understand and rely on each other.
In my view, each of my 21 million customers is a real person. I always keep a clear image of her -- and our customer is typically a "she." She yearns for a more personal time, a time when simple values and an upbeat attitude were the norm for American families; yet she also wants to save time, solve a problem, and brighten her life. So we design our catalogs to have the appeal of an old-fashioned general store, while featuring merchandise that will make her life easier and a bit happier.
That "bit happier" is the key. I have a rule of thumb that says a happy customer may tell three others about what you have to offer. Which is good. An unhappy customer, more ominously, will tell ten others about the bad experience. Which is very bad. In striving to build that crucial foundation of trust, strive to make your customer happy.
Selling as Practicality
With making customers happy as your guide, an entrepreneur's next step is to ferret out the building blocks of happiness. In my opinion, there are three: selecting the right products, being honest with customers, and welcoming communications between the company and its customers.
What follows are suggestions for integrating these practicalities into your salesmanship.
- Know Your Market
Find the right product for the right customer, and find the right customer by advertising in the right place. This is the basic premise that drove my initial bag-and-belt success story in 1951. Aiming to reach teenage girls, I secured a product that would appeal to them and advertised in a publication they read.
A few months later, I advertised the same product in Vogue, resulting in very few orders. Teenagers didn't read Vogue. Mature women who did read it wanted haute couture, not matching bag-and-belt sets. All of a sudden, what had been the right product became the wrong product, sold to the wrong customer, through the wrong advertising venue. It made all the difference.
- Sell, Don't Oversell
We've always made sure that our products represent quality and good value. I was a stickler for this, because back in the 1950s, mail order had a questionable reputation. Lots of products sold through catalogs were shoddy. I wanted to make sure my customers weren't disappointed.
For the same reason, we want the photographs and copy in our catalogs to provide an accurate representation of each product. Once, we featured a handsome purple poncho that, unfortunately, photographed with a bluish tinge. A schoolteacher wrote: "I would have bought your poncho, but, although the caption said it was purple, it looked blue in the picture. I couldn't afford to take a chance." That's the kind of catalog pitfall that we at Lillian Vernon can't afford either.
Similarly, we steer clear of hype in our copy writing. Aiming to sell, we don't want to oversell. We don't want our customers to be disappointed. It's even better if they're happier with their purchases than they thought they'd be.
- Offer a Money-Back Guarantee
To overcome the questionable image that plagued the mail-order business in the early days, we also made it our policy to provide a 100% money-back guarantee. We have always refunded in cash or in credit, always without hesitation and with no time limits.
Once, a customer who was packing up her house to move found an unopened box of Old Foley stoneware from England. She had ordered it 20 years earlier and now had no use for it. When she returned it to us, it took me a little while to dig through the old catalogs for the price, $79.98, but we sent her the refund.
While some retailers fear abuses of such a policy, we don't see it that way. We believe that the no-questions-asked, money-back guarantee shows respect for our customers as enlightened consumers. Forty-seven years later, it has paid off: the Lillian Vernon name is synonymous with outstanding customer service.
- Communicate with Customers
Customer service is a two-way street. From the beginning, we have always listened to our customers and encouraged them to contact us. When we offered a $1 bookmark that became one of our all-time bestsellers, we heard them loudly and clearly. When they rejected a rolling pin that could be filled with ice to make rolling out pastry easier, we also heard that.
We read and respond to all customer letters, cheers and jeers alike, and we welcome and have acted upon many suggestions from customers. One of the best was listing age-appropriate guidelines on products in Lilly's Kids, our specialty children's catalog. Since we incorporated this idea, we have received countless compliments from readers who view it as an important service.
- Interact with Customers
Communicating with customers needs to go farther, however. In my view, an entrepreneur must be involved personally. In the early days, I myself answered the telephones and talked with customers. While that isn't possible any longer, I have tried to maintain that same spirit by personally writing introductions for each of our catalogs. Readers consider this message, complete with my photograph, a personal tie to me.
These days, the kitchen table and the index cards have been replaced by sophisticated focus groups for identifying customers, computers for keeping track of their preferences to a degree unimaginable 47 years ago, and state-of-the-art personalization and distribution facilities for making sure that disappointments are even fewer.
But these are just the trappings. The basics haven't changed. At Lillian Vernon, we strive to keep customers happy. From a catalog image that attempts to tap into their yearnings to be "a bit happier," to the steps we have taken to ensure they aren't disappointed, we deliver on both a philosophical and practical level.
In doing so, we are guarding our crown jewels. Without the loyal following that those names represent, our company wouldn't exist. Making customers happy has made Lillian Vernon Corp. successful beyond my wildest expectations.
Lillian Vernon is founder and CEO of Lillian Vernon Corp., a specialty catalog and online retailer that she founded 48 years ago on her kitchen table.
Copyright 1998 EntreWorld.org