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Warm And Fuzzy To Cold Hard Cash


Enterprise -- MARKETING: CUSTOMER LOYALTY

WARM-AND-FUZZY TO COLD HARD CASH

How Gooseberry keeps its homespun catalog cookin'

When Susan Brzozowski picked up the Gooseberry Patch Co. catalog in 1993, the avid craftswoman planned only to browse. "I'm not big on mail order," says the 45-year-old former math teacher. "I like to see things before I buy them." But the cheery tone and "cute lettering" of the hand-drawn country-store catalog lured her into a purchase. Now she's a regular, buying at least one item for her Ellicott City (Md.) home each year.

Loyal buyers like Brzozowski are the soul of Gooseberry Patch, a mail-order retailer of homespun decorations and utensils, most for less than $20 each, based in Delaware, Ohio. "The Patch," as the company is often called, has a winning marketing strategy: turn customers into friends. "We're selling the warm and fuzzy, the sense of home," says co-founder Jo Ann Martin, a former first-grade teacher.

Don't be fooled by the image. The company is a tough rival in a cutthroat business. Some 7,000 catalogs jam the U.S. mail annually. As a group, they'll gross about $51 billion this year, says the Direct Marketing Assn. Most firms are tiny. Gooseberry's $7 million in fiscal 1998 sales puts it ahead of the 6,000 catalogs that gross $3 million a year or less.MUSLIN BUNNIES. Martin, 42, and neighbor Vickie L. Hutchins, 47, started the company in 1984 with a grubstake of $5,000 each. The two suburban mothers have since perfected an over-the-backyard-fence style of customer relations that has won them devoted clients--100,000 repeat customers from January to September alone.

But winning those hearts was no skip down a garden path. The first catalog featured mostly reproduction antiques--$400 easy chairs and $200 punch bowls--in glossy photos. Orders reached just $27,000, all for low-budget items such as $11 Santa Claus chocolate molds. The two partners quickly regrouped and shipped a four-page brochure featuring muslin bunnies, candles, and 21 other under-$20 items. Slick style and glossies were ditched for hand lettering and sketches. They displayed goods with domestic tips and a mulled cider recipe, inviting ideas and recipes from readers, too.

The response was so good that The Patch began sprinkling contributions through all its catalogs, giving clients an emotional stake in the company. Their customers--mostly middle-class, Midwestern women born in the baby boom years--now supply ideas and family stories through the mail, a toll-free hotline, and a Web site, www.gooseberry patch.com. This year, Brzozowski sent in an idea for making fall napkin holders from leaves. Customers even mail in photos of their children. It's no surprise the company's surveys have had response rates as high as 50%--well above the industry's 10% to 15% norm.

Client input has been gold in more ways than one. By 1991, Martin had some 800 recipes. In May, 1992, they became Old-Fashioned Country Christmas, the first of 35 hardcover and softcover books on subjects ranging from afternoon tea to herbal cooking. By 1997, books were 42% of retail sales. The Patch also has expanded into wholesaling. Deals with outlets such as Nordstrom Inc. have brought its books to 2,000 U.S. shops.

The chummy style may not work as The Patch grows. Dick Hodgson, a leading catalog consultant, warns that being too clubby can hurt a company's ability to bring in new buyers. "Most of these clever, unique approaches do not have longevity, or grow to a plateau," he says. But, he adds, The Patch is showing strong growth in a weak year for most catalogers.

In 1997, the company expanded to a nearby industrial park. Inside, telephones are ringing with 3,000 orders a day. But cheerful staffers still take time to chat. "It's like we're sipping tea with someone over the phone," says 23-year-old Crystal Lappie, a phone-sales supervisor. After all, you can't rush when you're selling hearth, home, and friendship.By James Ott in Delaware, Ohio


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