Developing a customer segmentation for QVC

With large volumes of customers and increasingly complex combinations of products and channels QVC decided they needed to develop a customer segmentation to personalise how and when products are advertised in order to improve engagement and increase customer satisfaction.

The Challenge

QVC is one of the world’s largest direct to consumer retailers. In the UK alone it has 1 million active customers annually with 8.6 million viewers and 1.3 million unique visitors each month.

QVC thought they knew who their customers were but as the range of products sold, and the channels customers engaged with, evolved, they wanted to be sure.

QVC identified that when a new QVC customer purchases, they became very loyal. However, in order to grow their business QVC needed to understand their market potential and identify the best way of reaching them.

The Solution

CACI worked with QVC to develop a customer segmentation supported by research to bring the segments to life. CACI used QVC’s customer data combined with its own data sets Ocean and Fresco, along with some market research variables from TGI to understand the key factors which defined a QVC customer. This information was then used to group similar customers together to create 7 robust segments.

Market research was carried out to help develop very detailed descriptions of each segment which were represented via video pen portraits and flick books. QVC embarked on a company-wide launch of the ‘Magnificent Seven’ segments.

The segments were appended to the customer database and to the UK market to understand market penetration and opportunity. The segmentation has continued to be revised over time so it evolves to meet the needs of the business.

The Results

The segments are used across the business to improve engagement with new and potential customers by determining:

• How and when products are presented on air and online
• The tone and content of email communications
• The right mix of brands and products
• Differences in customer satisfaction by segment

“The customer segmentation is used extensively in all areas of the QVC UK business.  It has given us a clear way to talk about and to our customers, ensuring that we are strategically aligned and able to deliver the best results for our customers.”