The Selling Spirit of Lillian Vernon

What do Hillary Clinton, Tipper Gore, Frank Sinatra, Betty White, Steven Spielberg, Loretta Lynn and Arnold Schwarzenegger have in common? In addition to achieving tremendous success in their individual fields, these superstars all number among the 14.7 million customers who have helped build the Lillian Vernon catalog into one of America’s most popular and successful direct marketing companies ever.

But as the woman who single-handedly turned a home-based pet project into a multimillion-dollar company knows, Lillian Vernon did not create phenomenal success by catering to the world’s rich and famous. Through genuine entrepreneurial spirit, unique sales savvy and an almost superhuman dedication to satisfying every single customer, Lillian Vernon has made her millions by turning the American home into her personal showroom.

From the very beginning, Lillian Vernon has stressed personalizing her products to make each customer feel special. In 1951 as a housewife expecting her first child, Vernon used $2,000 of wedding gift money to purchase a supply of belts and purses and place a $495 advertisement in Seventeen magazine offering to personalize orders with her customers’ initials free of charge. The response – $32,000 worth of orders from the one ad – would to this day make any direct marketer’s mouth water. In her next attempt Vernon added personalized bookmarks and sales more than doubled.

By 1954 Vernon had begun mailing out a 16-page black and white catalog offering combs, blazer buttons, collar pins and cuff links – all personalized of course. In 1956 she stopped operating the business from her kitchen table and moved into a storefront warehouse with a building next door dedicated to monogramming. Not surprisingly, business continued to boom and by 1970, the 19-year-old venture known as the Lillian Vernon Corporation posted its first million-dollar sales year.

After that amazing year, Vernon realized that to continue growing the business she would have to delegate some responsibility and adapt the company to address future concerns. “In the early days,” she says, “there was nobody else but me to do the work. During the day I mailed out the merchandise and at night I worked at home doing financial analysis. I did all the buying and wrote the catalog copy; I tried to do it all and it worked pretty well for the first half of my career.

“But after 1970 I was facing a harsh reality. Growing from a million to a multimillion-dollar company involved areas such as finance, list management and computers. So I did what needed to be done and did it quickly – I acted. I filled my ranks with managers from all different walks of life who generally were very savvy to the ways of big business and they almost killed us.”

Vernon found that despite their experience these executives couldn’t act decisively. Instead of making them into fast-acting visionaries like their new boss, corporate America had taught them to be cautious to a fault.

“Some of the executives I hired just couldn’t make a decision,” Vernon says. “They took analysis to the point of paralysis. Every major decision had to first be studied by a committee.”

From this experience Vernon learned that her success stemmed from time-sensitive decision-making and a rapid response to her customers, not from creating committees to mull over every possible course of action. To grow, she realized that the Lillian Vernon Corporation would have to blend the entrepreneurial spirit that built the company into the professional management techniques that must exist in a multimillion-dollar company.

“My mistake,” she explains, “was not hiring professional managers; it was letting them work in a non-entrepreneurial fashion. If I’ve learned anything over the years, it is the importance of drawing from the best qualities of both the entrepreneur and the professional manager. These are the left and right sides of the business brain, and they must harmonize in a healthy corporation.”

To this day the Lillian Vernon Corporation reflects this bullish adherence to the entrepreneurial spirit. The decision-making process is relatively simple. Get the facts, act on your best judgment, then acknowledge and correct any mistakes. Vernon feels that if she has hired and trained the right people to make good decisions, as the company president she has to let their decisions stand without interference from above.

“In the beginning,” she says, “I felt like I was sacrificing my career, but it made sense. I encouraged my staff to act on the good instincts I hired them for and keep me posted on their activities. There’s nobody to second-guess their decisions or filter information before it reaches my desk. That also means there’s nobody to cover up their mistakes. Entrepreneurs must stand or fall on their decisions, and if one of my employees cannot do that we must part company.”

Although Vernon admits that her management theory may not be so revolutionary as to force Peter Drucker to quit the business, it has led her through uncharted waters and brought unimaginable success. Since 1970 the Lillian Vernon Corporation has grown from two catalogs to 18 (including one specializing in children’s merchandise called “Lilly’s Kids”), helped open the Chinese market as a product source, built a national distribution center in Virginia Beach and gone public as the only company on the American Stock Exchange founded by a woman. Since that first million-dollar year in 1970 she has experienced 23 more, the latest being 1993 with record sales of $172.9 million.

What does the future hold for Lillian Vernon? More of the same ground-breaking adventures in untested and untapped direct markets. In 1993 Lillian Vernon products appeared for the first time on an hour-long segment of the QVC Shopping Network and this year the company plans to release its first catalog on CD-ROM. It seems that her true-blue entrepreneurial heart keeps Lillian Vernon driven to create happy customers and keep the competition on the ropes.

“I take chances,” she says, “by acting on my ‘golden gut.’ I try to keep the catalog creative and give my customers the proverbial offer they can’t refuse. And most important, I know everything that is going on. There’s nothing I hate more than waking up to find that one of my competitors is already doing something that I was planning on. That plus the ability to do things for other people and the opportunity to run a company with high standards of integrity and morality are the motivating factors that keep me going.”