Continuity marketing: the Club Kidsoft model.

When Rick Devine launched Club KidSoft last October, he took aim at one of the hottest demographic segments of the emerging consumer marketplace: pre-teenage kids. Club KidSoft--whose $29.95 membership fee provides kids with a quarterly magazine and CD-ROM sampler disk-- took just 90 days to build a base of 30,000 members, says Devine. And the club keeps adding new members, in part through co-promotions with Apple and Compaq and magazine distribution through outlets like Blockbuster Video.

Devine says it's too early to estimate how much software his pint-sized members will buy over the next few years, but he's optimistic that the KidSoft club format will help him build "a specialized identity for the delivery of specialized programs to selected customers." If the KidSoft model works as well as similar continuity programs in the book and record business, Devine could end up with a direct pipeline to many of the most valuable buyers in the kids' software marketplace.

We recently asked Devine what he's learned so far about marketing to kids:

Rick, have you made any mid-course corrections as a result of feedback from club members?

"The biggest change we've made in the most recent edition of the Club KidSoft magazine and CD-ROM, our fourth issue so far, is that we've aged it up a bit. The first few editions were aimed at a younger audience, about age 5 to 7. We're now focusing on the 8 to 10 group, who happen to have the greatest purchasing influence on parents. These kids are able to do more with the computer, while younger kids are dabblers. And the 8 to 10 focus can attract kids as young as 4 to 6, and also has a good chance to pull in the 10 to 12s."

Aren't kids in these age groups primarily interested in games?

"Sure, but kids also like productivity software. They like to produce a piece of output, whether it's artwork, a story, CAD designs, etc. They like to use the computer to express themselves creatively, much as they would with Legos or crayons. And they like to create something different each time they use the computer."

You're relying heavily on a print magazine to sell software off a CD-ROM disk. Isn't that a somewhat mixed message for your customers?

"Print is an evangelism tool we use to educate consumers about electronic software purchasing. Just as it took consumers a while to get used to automated teller machines, buying software electronically requires a behavior change for many people. Right now less than half our sales are electronic, but in the next few years we expect to see a fifty-fifty split between electronic and print sales. As Soon as a broadband connection into the home exists--which I think will be in just a few years--we expect to become more like Prodigy or AOL, and establish a model for kids logging onto their own special interactive network to access a server or download software."

How well can your CD-ROM disk compete as a "virtual store" against traditional consumer outlets?

"Right now we offer 128 titles from almost 40 developers, at prices averaging around $29. We're also making the purchase of software off the CD very inexpensive, with lots of benefits and coupons. Starting next month, for example, consumers will get the Micrografx Crayola Art Adventure product free with the Club KidSoft disk that comes with every Compaq Impressario."

How big a company do you expect to build with the club model?

"Our goal is to be the industry leader in kids' software. We think that over the next ten years, 5% to 10% of all software will be acquired electronically. If software for children accounts for 10% of that total, we're looking at a $100 million market."

Rick Devine, president, KidSoft, 718 University Ave., Los Gatos, Calif. 95030; 408/354-6100.