Columbia House.

• Author: Hopkins, Marjorie
• Position: Wabash Valley's largest employer - Regional Report West

The business idea 38 years ago was simple and straightforward. It's success was astronomical. That's the story of the Columbia House Co., which today is the Wabash Valley's largest employer and one of the top two major audio and video clubs in the nation.

Located in Terre Haute, Columbia House began in the mid-1950s as a test for a CBS executive's idea to market music through the mail. It was a viable marketing idea because music had become more commonplace in the home in the early 1950s. Almost everyone had a phonograph and a mailbox--the two items necessary for Columbia House to make a sale in the home.

Immediate positive response to the club marketing idea and a virtual explosion in the music-reproduction industry over the years paved the way to success for Columbia House, says Fred Whitkanack, senior vice president of operations at Columbia House in Terre Haute.

Columbia House is defined as a club, Whitkanack says. "The primary identification of a club is that you have to have an up-front communication and agreement that processes into regular communications. We communicate with our members every four weeks and have off-cycle communications additionally. We will communicate with each member 13 to 18 times a year in a promotional fashion."

One of Columbia House's most recent promotional pieces, "The Music Source" catalog, list more than 2,000 CDs and tapes available through the club. The selections range from hot new releases to all-time classics at a price Columbia House claims just can't be beat. In this specific promotional piece, established members buy and CD or tape at the regular club price and get a bonus selection. Any additional CDs or tapes may be purchased at "club" prices--and the more members buy, the more they save.

"The Music Source" goes out nationwide to club members. Prospective members are solicited through Columbia House's two broad methods of advertising: direct mailings and media advertising in consumer magazines and newspapers as well as radio and television.

The company began with fewer than 200 employees in Terre Haute in 1956. Terre Haute was selected because of railway access that was vital to a mail-order company in the '50s and because Columbia Records was manufacturing vinyl discs in Terre Haute at the time. When the club marketing idea proved successful, warehouse distribution points were established near Columbia Records' other manufacturing facilities in California and Connecticut.

Today Columbia House...