Programming Innovation

Once a mere shopping channel, HSN now considers itself a “premier interactive lifestyle network and retail destination” with an innovative new private label credit card program for its “best” customers.

Customer appreciation events, sweepstakes, coupons, reward certificates and flexible financing benefits await shoppers, tempting the eye — and the pocketbook — with fashion, accessories, beauty products, kitchen goods, electronics, décor, crafts and more. All that brings in nearly $3 billion in annual sales for the multi-channel retailer based in St. Petersburg, Fla. — with 34 percent now coming through www.HSN.com.

The credit card program, developed with the help of loyalty marketing services firm Alliance Data, “dovetails so well” with HSN’s mission of delivering “joy, excitement and new discoveries for our customers,” says executive vice president of programming, marketing and business development Bill Brand.

“It’s all about personalization and access,” he says. Inside a customer’s HSN.com portal, “she may find free shipping and handling offers, information on events … even a special financing offer. These special opportunities keep her very engaged in our world.”

And that world, says Alliance Data chief client officer Melisa Miller, is full of surprises — including just how “best” an HSN best customer is. “She is very focused, very connected with the hosts and hostesses and almost spiritual in her shopping behavior,” Miller says. “She moves very quickly. And HSN has done a phenomenal job of making her feel very special. We had to build programs and ideas to complement that.”

Kick-starting the company
HSN, formerly known as the Home Shopping Network, has been overhauled under the leadership of CEO Mindy Grossman.

“We’ve brought in great brands and improved the quality of everything we offer and every single experience,” Brand says. That includes the addition of big-name stars and lifestyle programming that might, for example, allow a customer to watch chef Emeril Lagasse create a brunch even if she doesn’t purchase any of his cookware or gadgetry.

“We know that our customer loves watching the ‘Today’ show or the Food Network with her family on the weekends,” Brand says. “So the question became, how do we make our content complement that? This allowed us to really kick-start the company and drive the growth.”

Even during the recession, HSN discovered that its customers — 10 to 15 percent of whom fit into that “best” category — still loved to shop; they just had to be “a little bit more discerning about purchases.”

“And we like to say there’s never any bad news on HSN,” Brand says. “We still want her to watch ... so we continue to invest in innovation.”

In 2009, that innovation focused on ways to drive sales, increase the number of credit card shoppers and further engage current cardholders. That led to a partnership with Alliance Data, thanks to what Brand characterizes as “the right combination of marketing tools, customer intelligence and creative insight.”

The result is a near-tripling in the number of new cardholder accounts over the last two years, a 20 percent increase in satisfaction among cardholders and an average of 85,000 monthly unique visitors and 200,000 monthly page views between July and November — up from 2,800 hits per day when the VIP Access Internet portal was first launched in June 2010.

Adding to its “insider” feel, the exclusive VIP Access site was neither publicly announced nor advertised; it was simply allowed to be another discovery for loyal shoppers — as well as a carrot for those aspiring to be. The greater the customer loyalty, the greater the offerings.

Customer analysis
The partnership between HSN and Alliance Data began with the credit program, but the organizations have since worked together on HSN’s broader multi-channel goals.

“This all started with the vast amount of knowledge HSN had about their customers,” Miller says. “They did an exhaustive amount of survey work about what inspires her, and what is uninspiring to her.

“Only after we sort of layered all these things on did we get to definition of the ‘best’ customers,” she says.

The collaboration involved expert analysis of those HSN customers, meshing customer value segments with customer product affinity data. That original “portrait study” has been tapped for marketing decisions based on customer “personality.”

This all falls in line with HSN’s guiding principle of creating “boundary-less” retail. HSN has offered Alliance Data access at “virtually every level” to help create the right solutions, Miller says. Retail “is in our blood,” she says “We don’t dabble in this. This is what we do.”

As for HSN, what it does increasingly well is truly understand who it is that’s purchasing its wares.

“We are beyond customer-centric,” Brand says. “It’s at the foundation of everything we do, how we best support and serve her. And Alliance Data goes hand-in-hand with that mission.”