QVC shops for ideas for future sales

In the past, the location meant channel browsers could "bump into" a product they liked on air, says Fred Siegel, who was QVC senior vice president of marketing from 1993-98 and and is now involved in ventures such as TV production and home security. With video-on-demand, "They don't just surf around," he says. "They'll say, 'What's on HBO on-demand that I haven't seen?' "

•Home-shopping image. QVC reaches 93 million U.S. households, but only about 10% have bought from the network. One snag: Many people still view TV-based home shopping as lowbrow — even though QVC sells brand-name goods, sophisticated electronics and fashions from couture designers.

As QVC put it in its September 2007 employee newsletter: "The home shopping stigma is alive and well."

Leading QVC into its future are relatively new managers: George became CEO of the Liberty Media-owned network in 2006. Chief marketing officer Jeff Charney also joined that year. Claire Watts, former executive vice president of merchandising at Wal-Mart Stores, became the U.S. commerce president on May 1.

Despite challenges, QVC has in its favor fiercely loyal customers. They typically have a deep affinity for the brand, says Jeffrey Rayport, author of Best Face Forward, a book on customer service.

QVC devotees readily call into the live segments to offer product testimonials, are up on the personal lives of their favorite program hosts and generally view the channel as entertaining. "As weird as it may sound, for people who love the network, it's good company," Rayport says.

Pretty picky in host selection

QVC works hard to build that loyalty.

It is extremely selective when choosing those chatty hosts. Last year, it screened more than 3,000 applicants and chose three. New hosts are trained for at least six months before getting their own on-air slot.

Meanwhile, vendors, such as designer Dao, must go to "Guest Excellence" class to learn how to best pitch their wares. They are schooled in QVC's "backyard-fence" style, which means conversing with viewers the way they'd chat with a friendly neighbor.

Every product gets a rigorous review before being shown on TV. In selecting the goods, QVC staff "look for a product that is complex enough — or interesting enough — that the host can talk about it on air," Rayport says.

QVC also counsels vendors on how to make products audience-appropriate. For instance, Dao says that she was coached not to show too much skin when creating her line. Designs also have to fit — and flatter — sizes from extra small to 3X. "It's a learning process," says Dao. "But I'm open (to it.) I just want to create great clothes for everyone."

The representatives at QVC's four U.S. call centers, which handled more than 181 million calls last year, also get extensive training on how to keep customers happy.

Yet, QVC has barely tapped its potential: 95% of revenue comes from repeat customers. Of 93 million U.S. homes reached, a core 1.8 million account for 10 or more sales a year. Another 7.3 million buy at least one item a year.

While George wants to bring in new customers, he says his main goal initially is more sales from the customer base.

Rayport says QVC needs to make new buyers a priority, particularly new ones under age 30 to replace aging customers. QVC won't give details on the average age of its mainly female audience, but independent research firm BIGresearch pegs it at 54.

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