Case Study - Chinaberry Catalog (2,875 words)

5. Know the difference between housefile growth and profits. "They are not linked," Ed Ruethling says emphatically. "Growing your housefile is OK for perhaps a year, but those extra customers better equal increased profits next year, or you could be in trouble."

In short: Know your attrition rate—and assume it will be 50 percent a year, he notes. Concentrate on improving your customer lifetime value.