Quality. Value. Convenience = Votes

According to Inquirer Staff Writer Stacey Burling, the week before Christmas is QVC Inc.'s last big week of the year. Based on sales history, this is prime time for the Great Gift show and featured products, the TV station's Super Bowl. The instantaneous sales results for the products and programming are thought of as "votes".

Here's it how it works.

QVC purchases the items it sells from the manufacturers, who agree to provide someone to appear on air for the sales pitch in front of anywhere from 500,000 to 1.5 million viewers it attracts in any hour.

Screens loaded with graphs and charts let QVC producers know how many people are on the phone, what they are ordering, and how many of them are first time customers at any moment in time. That is a key measure, because people watch an average of 38 hours of programming before chancing that first order.

With programming always changing, QVC lets a designer tell people the story behind the product and how to use it. After what is at most six or seven minutes of airtime for a product, the station's producers cleverly integrate a call or two from customers. Once appearance includes a full description and demonstration and the price, it's time to take the call that will be crucial to driving sales.

How successful is this model?

A typical QVC show sells 5,000 to 15,000 items in an hour. Great Gift sold 34,000 items in 2 hours. The show also flushed out 757 new customers, which are thought of as a good number. QVC viewers think shopping is inherently entertaining, and the programming rarely disappoints.

With 2005 net sales at $6.5 billion, 7.5 million active customers, and 95% revenue from repeat customers (more than 90% from female viewers), QVC, a Liberty Media Corp. Company ships more than 100 million packages per year. According to the report, it is not only tracking, but hitting the numbers as well.

I'm curious, how do you feel about making purchases via TV shows? Many of us have become used to buying online. TV was there before online became a popular gift destination. If you made purchases from a TV show, what was your experience?

For items such as clothing and accessories, I still prefer to see, touch and feel what I'm buying. No problem, QVC has a Studio Store in West Chester, PA, a flagship store at Minnesota's Mall of America, and outlet stores in Pennsylvania, Delaware and Florida. They are also in the UK, Germany, and Japan. CEO Mike George joined QVC from Dell where he was the Chief Marketing Officer and the General Manager of Dell's Consumer Business Unit. [See the transcript of a recent conversation with customers here.]

I visited QVC studios a few years back thanks to a contact who worked at headquarters. As you may have realized if you've ever been on any show, the studios are much smaller than they seem on TV, even when staged in a corner of a large warehouse. That creates a sense of intimacy with the viewers while the cameras make good use of the space.

The environment did indeed seem cheery. Hallways and buildings were bustling with the sounds of people getting ready to put on a show for your benefit. Me? I never watch TV. 

Comments

[Michael Wagner]

"how do you feel about making purchases via TV shows?"

Good question!

I've never purchased via TV. I'd rather not spend money...but therapy is helping.

And as for TV, I'm twisted. I like Showtime's Dexter.

But there is an interesting development in the Des Moines market. One of the Ford dealerships is doing a kind of infomercial model to try and "move" cars.

Kind of a like the residential real estate shows most markets have only with cars.

Wondering if this will work?

Thanks for stirring our thinking out here in the blogosphere!

[Valeria Maltoni]

The whole interaction with TV and potential extensions via Web 2.0 applications fascinates me. Marketers may have just scratched the surface in that new space, but there are companies like QVC who have been doing quite a good job at developing those opportunities so far.

I found it interesting and telling that QVC would hire a marketer as CEO...

[Drew McLellan]

Boy, I am going to win the frequent commenter award!

I will admit to you and just you...I shop on QVC during the holidays. I get some great ideas for unusual gifts. I DVR the shows like "Under the Tree" that offer a lot of gift ideas and with the fast forward button, I can scan 2 hours of show in about 10 minutes.

I know...can you say type A?

Anyway...they have incredible prices on electronics, cameras, computers etc. Huge buying power. I've never bought "gotta touch or see it" types of items (clothes, jewelry etc) but for things that don't require that personal touch, it's a great place to shop.

Best QVC find this year -- candles made from wax, look and smell like real candles but are battery operated, so they flicker like a candle but no worries about accidental fires etc.

I have given them to three different women (mom, step mom and female friend) and all three have oohed and aahed over them. My dad's wife has actually gone online and bought more of them to give as gifts herself.

Whew..that was a lot of confession in one comment!!

Drew