Transcript 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
 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

Seriously?
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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
Live Broadcasting

Powerful connection with viewers
 Very
Human
 “Backyard Fence Sell”
 Want rather than need
 Caller testimonials
 Best elements of reality TV
Analysis

Immediate changes in response to low
sales volumes
 Change
lighting
 Different camera angles
 Caller testimonials
 Emphasizing saleable features
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

The Road to QVC

Develop your story


Apply to become a vendor


Be prepared to fail
Bulk up those inventories


3-week turnaround
Put your product through its paces


Will it sell?
$20,000 worth of product
Practice your pitch

QVC University
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

Shedding Historical Baggage
Gaining higher product credibility
without alienating current clientelle
 Pursuing Branding Partnerships

 Antiques
Road Show Collection
 Lucky Magazine special QVC edition
The Online Ad Surge
Brand advertising online has taken off--and it’s shaking up Madison Ave.
Stephen Baker
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.”

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
Why so successful?

Effectiveness is measureable
 Clicks
= Dollars and cents
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
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
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

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E.g. Adidas
Individual customer relationships from broad marketing
Maintaining relationships

Once we get T.V. viewers to the
website, how do we keep track of them?
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