Telephone-based retailer QVC saw $3.9 billion in sales in 2001. So why is it investing in its contact center?
Home shopping channel QVC prides itself on being the epitome of convenience. Think about it: where else can you buy a set of steak knives at 3 a.m. while lying in bed? Though now a staple of cable networks everywhere, QVC has recently focused on keeping and growing customers by investing in its all-important contact centers, a touchpoint that virtually every QVC customer passes through.
A giant among Customer Interaction Centers (CICs) QVC garnered $3.9 billion in sales last year through its 24-hour cable channel and e-commerce Web site. Its seven contact centers worldwide are staffed with upwards of 6,500 agents who answered nearly 113 million calls in 2001, serving customers in North America, the U.K., Germany and Japan. The company's online presence is also growing. QVC.com received more than 77,000 emails in January 2002 alone. With such a high volume of customer interaction, assessing and meeting identifiable customer needs has become high priority.
Each of QVC's 24 million customers has a member profile established upon the individual's first transaction, says Carol Strogen, QVC's director of customer focus. QVC collects basic transaction and preference data -- including the customer's preferred channel -- and offers specialized newsletters tailored to specific categories such as "collectibles." All of the customer-contact data is then integrated into a single database used by customer service reps (CSRs). The goal is a 360-degree view of the customer across channels. As Strogen explains, "Our philosophy is that we must deliver the same, consistent service experience to customers, regardless of how they come to us."
One of the most successful and cost-effective measures is helping customers help themselves. Loyal "QVC-ers" have reacted favorably to the self-service approach, with 40 percent of purchases now being handled by automated voice response. Part of the battle is building awareness of the system, but use is growing thanks in part to plugs by its television show hosts. The success of the automated voice system allows QVC to interact with and service customers in a consistent fashion regardless of channel.
The "soft hard" sell QVC lets the developing relationship take care of cross-selling and up-selling customers. Reps do cross-sell, but the approach is more service than hard sell. For example, a customer ordering a camcorder might be offered the matching camera bag via a screen pop up, but not much more. To maintain the trust it has engendered with customers, QVC does not currently incent reps to cross-sell or up-sell. Its philosophy is to maintain a base level of strong service, then let the relationship progress at the customer's desired pace.
By softening the hard sell, QVC positions itself as the "friend next door," which pays off in additional viral marketing-sparked sales. "Part of QVC's success is attributable to our positioning as a neighbor who might recommend a product to a friend over the fence in the backyard," says Strogen.
But it all starts with building and maintaining a relationship across key touchpoints. The retailer's recent CIC investments are designed to upgrade personalized service to match current convenience levels, thereby enhancing the entire customer experience. It's a one-to-one strategy designed to strengthen revenue streams from what is already a loyal customer base. According to Cincinnati-based research firm Burke Inc., QVC customers can be divided into seven different categories, with seven being the most loyal and most likely to buy again. Seventy-eight percent of "sevens" do, in fact buy again within 12 months, reports the firm. Although Strogen didn't divulge exact figures, she confirms QVC boasts "a lot of sevens."