Case - QVC Provides Superb CRM
QVC (qvc.com) is known for its TV shopping channels, and it is selling on
the Web, too. It is a very
competitive business, since retail selling is done in several marketing channels. In 2000, QVC served
more than 6 million customers, answered 125 million phone calls, shipped about 80 million packages,
and handled more than a billion page views on its Web site. In February 2006, QVC topped the $800
million online domestic sales mark. QVC's business strategy is to provide top-notch customer service
in order to keep its customers loyal. QVC also appointed a senior vice president for customer service.
The problem was how to provide top-notch customer care and do it economically.
To manage its huge business (about $5 billion a year), QVC must use the latest IT support. For
example, QVC operates four state-of-the-art call centers, one of these for overseas operations.
However, before using technology to boost loyalty and sales, QVC had to develop a strategy to put its
customers at the core of corporate decision making. "Exceedingly the expectations of every customer"
is a sign you can see all over QVC's premises. As a matter of fact, the acronym QVC stands for
Quality, Value, and Convenience—all from the customers' perspective.
In pursuit of this goal, QVC created a truly excellent service organization. Among other things,
QVC provides educational (demonstrating product features and functions), entertainment, and
companionship. Viewers build a social relationship with show hosts, upon which the commercial
relationship is built. Now QVC is also attempting to build a social relationship with its customers on
the Web site (see qvc.com).
QVC knows that building trust on the TV screen is necessary, but not sufficient to draw
customers. So everyone in the company contributes to the customer service goals. QVC's president
randomly checks customers' letters, including e-mail. All problems are fixed quickly. Everything is
geared toward the long run. In addition, to make CRM work, QVC aligns senior executives, IT
executives, and functional managers so that they work toward the same goals, collaborate, have plans
that do not interfere with others' plans, and so forth. Also, the company adopts the latest IT
applications and continuously offers training to its customer service reps in the new CRM applications.
QVC is using metrics to measure customer service. These include: friendliness of the call center
reps; how knowledgeable the reps are about the products; clarity of the instructions about how to order
and how to use the products purchased; the number of people a customer has to speak with to get a
satisfactory answer; and how often a customer has to call a second time to get a problem resolved.
Data on customer service are collected in several ways, including tracking of telephone calls and
Web site movements. Cross-functional teams staff the call centers, so complete knowledge is available
in one place. Corrective actions are taken quickly, to prevent repeat problems in the future.
To get the most out of the call center's employees, QVC strives to keep them very satisfied. They
must enjoy the work in order to provide excellent customer service. The employees are called
"customer advocates," and they are handsomely rewarded for innovative ideas.
In addition to call centers, QVC uses computer-telephony integration technology (CTI), which
identifies the caller's phone number and matches it to customer information in the database. This
information pops up on the reps's screen when a customer calls. The rep can greet the customer by
saying, "Nice to have you at QVC again, David, I see that you have been with us twice this year, and
we want you to know that you are important to us. Have you enjoyed the jacket you purchased last
To know all about the customer history, QVC maintains a large data warehouse. Customers'
buying history is correlated by Zip code with psychodemographic data from Experian (experian.com),
a company that analyzes consumer information. This way, QVC can know instantly, for example,
whether a new product is a hit with wealthy retirees or with young adults. The information is used for
e-procurement, advertising strategy, and more. QVC also uses viral marketing (word-of-mouth of its
loyal customers). In order not to bother its customers, QVC does not send any mail advertisements.
1. Enter qvc.com and identify actions that the company takes to increase trust in its e-business.
Also, look at all customer-service activities. List as many as you can find.
2. List the advantages of buying online versus buying over the phone after watching QVC. What
are the disadvantages? Is this a CRM service?
3. Enter the chat room of qvc.com and the bulletin board. What is the general mood of the
participants? Are they happy with QVC? Why or why not? What is the advantage of having
customers chat live online?
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