QVC seeks to upgrade its image, remain 'relevant' (3/4ページ)

Meanwhile, vendors, such as designer Dao, must go to "Guest Excellence" class to learn how to best pitch their wares. They are schooled in QVC's "backyard-fence" style, which means conversing with viewers the way they'd chat with a friendly neighbor.

Every product gets a rigorous review before being shown on TV. In selecting the goods, QVC staff "look for a product that is complex enough - or interesting enough - that the host can talk about it on air," Rayport says.

QVC also counsels vendors on how to make products audience appropriate. For instance, Dao says that she was coached to not to show too much skin when creating her line. Designs also have fit - and flatter - sizes from extra small to 3X. "It's a learning process," says Dao. "But I'm open (to it.) I just want to create great clothes for everyone."

The representatives at QVC's four U.S. call centers, which handled more than 181 million calls last year, also get extensive training on how to keep customers happy.

Yet, QVC has barely tapped its potential: 95 percent of its revenue comes from repeat customers. Of those 93 million U.S. homes reached, a core 1.8 million account for 10 or more sales a year. Another 7.3 million buy at least one item a year.

While George wants to bring in new customers, he says his main goal initially is more sales from the already lucrative customer base.

Rayport argues that QVC needs to make new buyers a priority, particular new ones under age 30 to replace aging customers. QVC won't give details on the average age of its mainly women audience, but independent research firm BIGresearch pegs it at 54.

"As your core customer base ages, you need to refresh the franchise," Rayport says. Though, he adds, "how to do that without losing the audience that is sustaining you now - and for the foreseeable future - is a very tough problem."

With that problem in mind QVC is avoiding wholesale changes to chase new buyers, in favor of gradual, well-researched shifts in merchandising and marketing.

"We can't take a walk on the wild side with our customers," says CMO Charney.

Among QVC's endeavors:

- Expand and upgrade the product mix. QVC has bulked up on brand names.

Its jewelry selection now has more prestigious brands such as Tacori - which has created rings for stars such as "Grey's Anatomy's" Ellen Pompeo - and less generic gold and silver.

In clothing, lines from couture designers such as Marc Bouwer (who has created fashions for Angelina Jolie and Halle Berry) are sold alongside more folksy choices, such as holiday sweaters with sequined Santa Clauses.