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A Sales Channel They Can’t Resist

A Sales Channel They Can’t Resist. The Secret to QVC’s Success Elizabeth Esfahani. What QVC Was. “Trailer-park housewives frantically phoning for another ceramic clown” “Vehicle for broken-own movie stars…”. In Reality. $5.7 billion in sales during 2004 Twice as profitable as Amazon.com

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A Sales Channel They Can’t Resist

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  1. A Sales Channel They Can’t Resist The Secret to QVC’s Success Elizabeth Esfahani

  2. What QVC Was “Trailer-park housewives frantically phoning for another ceramic clown” “Vehicle for broken-own movie stars…”

  3. In Reality • $5.7 billion in sales during 2004 • Twice as profitable as Amazon.com • 3rd largest U.S. broadcaster in revenue • 1.5 million viewers for every 10,000 orders received • Birkenstock airtime is worth $8 million in traditional advertising

  4. Seriously? • Honing the art of TV retailing • Blend of entertainment and retailing • Moving away from cherubs and bangles to: • Home décor • Electronics • Fashion • Use products to build relationships with customers

  5. Live Broadcasting • Powerful connection with viewers • Very Human • “Backyard Fence Sell” • Want rather than need • Caller testimonials • Best elements of reality TV

  6. Analysis • Immediate changes in response to low sales volumes • Change lighting • Different camera angles • Caller testimonials • Emphasizing saleable features

  7. Not as Easy as you think • 20,000 inquiries in 2004 • 4% were accepted • Products that don’t sell may be liquidated • Underperformers may not come back

  8. The Road to QVC • Develop your story • Will it sell? • Apply to become a vendor • 3-week turnaround • Put your product through its paces • Be prepared to fail • Bulk up those inventories • $20,000 worth of product • Practice your pitch • QVC University

  9. Win / Sort of Win Situation • Name brands increasing QVC’s credibility • Introduction of QVC brand products • No name brands generally succeed • Name brands may suffer

  10. Shedding Historical Baggage • Gaining higher product credibility without alienating current clientelle • Pursuing Branding Partnerships • Antiques Road Show Collection • Lucky Magazine special QVC edition

  11. The Online Ad Surge Brand advertising online has taken off--and it’s shaking up Madison Ave. Stephen Baker

  12. What it was • Dominated by obscure companies • Dot-com crash of 2002 meant decline in online advertising. • “A few years ago, it was kids with green hair selling ads.”

  13. What it is • Cost of advertising on “major portals” has jumped • $180,000 / 24 hr period • $300,000+ / 24 hr period • No Vacancy • Internet ad growth at 28.8% • Overall industry: 7.7% • 2004: Online ad industry $9.3 billion

  14. Why so successful? • Effectiveness is measureable • Clicks = Dollars and cents

  15. Effects of online advertising • Other media- advertisers want similar accountability for T.V and print media • The TiVO problem • How to advertise to TiVO customers? • New Innovations • Weather.com weather bar links to ads • Google and the paid search • Rich media evolution

  16. Complications & Innovations • T.V. Spots are easy • Online advertising means infinite choices • How big of a banner? • Horizontal or vertical? • Interactive or static? • Rich media or text? • Sound, video, both? • Makes people nervous

  17. The Remedy? • Packaging, packaging, packaging! • Coupling online advertising with traditional media buys • Coupling prime ad locations with ads on other sites • Watch T.V with one eye, surf the web with the other • E.g. Adidas • Individual customer relationships from broad marketing

  18. Maintaining relationships • Once we get T.V. viewers to the website, how do we keep track of them?

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