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There are many good arguments against starting a continuity club: The limited offerings turn consumers off, and auto-ship programs are difficult to operate.

But there is one thing in their favor. They're profitable when run well, according to Pat Corpora, CEO of Hosiery Corp. And Corpora should know: His firm's Silkies Made to Order club delivers 10% of all the hosiery sold in the United States, making 10 million shipments to 2 million customers a year.

As Corpora sees it, continuity marketing is an efficient way to spend acquisition dollars. And inventory control is a breeze when merchandise lines consist of 20 or 30 products that are shipped at regular intervals.

But Silkies had a run in its stockings. It experienced a 40% decline in revenue, largely the result of rigid marketing structures and a product line that hadn't changed with the times.

What did it do?

First, Silkies' operating team adjusted the merchandise mix, bringing in a wider variety of colors, fabrics and styles. From a heavy reliance on control-top hose, it branched out to include shapers, plus-size offerings and knee-highs, reflecting a female population that was increasingly wearing pants.

The unit also changed its marketing strategies. While it still used the word “free” in offers, it is much clearer about the continuity club's terms.

“One of our inalienable rights as DMers is to use the word ‘free,’” Corpora said, speaking last month at Direct Media's Mailer Conference and Co-op in White Plains, NY.

He added, “We have to make sure we have all the disclosures everywhere, but being able to bring people in with a free offer is very powerful.”

Silkies also revamped its structure so it could easily change styles, delivery frequency and quantities shipped. It also hired additional customer service staff, promoted an inbound call center number and launched a Web site (www.silkies.com).

These changes allow customers to easily change the frequency of delivery, temporarily suspend their accounts or alter the mix of products they receive.

These efforts put the customer in control, Corpora said. Silkies, which sends 40 million pieces of direct mail a year, now has 300,000 customers who've paid for more than 20 orders.

And they are loyal: Once they've taken delivery of that many orders, they tend to continue at a rate of 97%, Corpora said.