Best Buy thrives by delivering value to customers

Best Buy should be dead

Bloomberg Businessweek; July 19, 2018

In Marketing to the Entitled Consumer, we demonstrate how a focus on reciprocal value forges strong customer relationships. We show how companies can gain a sustainable edge by finding new ways to deliver value to consumers. And, we argue that once you have created value for customers, you must build on that value, creating a consistent reputation for giving customers what they feel entitled to—or what they will feel entitled to once they get used to it.

During my Forrester Research days, I always enjoyed speaking to the CRM team at Best Buy and often quoted one of their communications mantras: “give, don’t take.” What they meant was that they tried to find ways to provide value to customers in their communications, and not to focus on extracting value from them. In the years since, like many other retailers, Best Buy struggled. In fact, it almost collapsed during the great recession, losing $1.7 billion in one quarter in early 2012.

Yet, with a new CEO and a significant focus on delivering reciprocal value, Bloomburg Businessweek recently published a feature emphasizing that Best Buy is not only still alive, but thriving. I saw a few of the examples that we recommend companies follow to build reciprocal value:

  • Enhance your product or service. Best Buy introduced the role of “in-home advisors” which it describes as personal chief technology officers. Hubert Joly, Best Buy’s CEO who has led the change at the company, describes how advisors “…can talk about what’s possible, be human, make it real.” And, he adds that it can be “a great way to make a sale, but it’s also the beginning of a beautiful friendship.” We love this way of thinking, In Marketing to the Entitled Consumer, we point out that “a marketer who treats you like a friend is always to going to be looking for opportunities to give you a little bit more of the things you like best.”
  • Reduce consumer effort. One of the things that’s really cool about the advisor role is how they seemlessly coordinate with Best Buy’s Geek Squad team which helps with repairs and installations. In the Bloomberg Businessweek story, an advisor identifies a customer need to connect their electronics and she is able to arrange for a Geek Squad member to show up within the hour. No hassle. No battery of phone calls. No effort on the customer’s behalf.
  • Solve the consumer’s broader problem. The in-home advisory program grew out of Best Buy’s strategic growth office, which the article refers to as “a safe space for ideas.” The program has three rules: no job is too small; we will come to your home for free; and we will be comfortable not closing a deal. Advisors are tasked with, and trained to, identify a customers need and to speak with the customer in terms of value. They set out to help customers achieve a broad objective, such as making their home “smart” or connecting all of their disparate technologies.

If this all feels too daunting or too far above your pay grade. Don’t despair. Pick ideas that you can implement and start small. One of my favorite aspects of the article is a theory that Joly refers to as the bicycle theory. He points out that “If you try to direct a bicycle at standstill, you fall. The key is to get moving,”

 

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