Appliance store’s focus on the customer lands 7% more sales and 6% higher close rates.
As its name implies, appliance superstore Best Buy is out to make its
customers believe it is the best place to buy a variety of items, from CD
players and stereos to refrigerators.
As part of that goal, the store chain recently completed a year-long
customer-centricity program that garnered some hefty results. The 32 lab stores
that participated in the program – including both underperforming and
high-performing stores -- booked an average 7% more sales, and were able to
close 6% more deals.
Best Buy’s new customer program consisted of several initiatives. First,
the retailer identified five different key customer types: affluent
professionals seeking the best technology experience; younger males wanting
cutting-edge technology and entertainment; fathers looking for technology to
improve their lifestyle; mothers seeking technology to enrich their children&singlequot;s
lives; and small business people using technology to improve their bottom lines.
It then adapted initiatives to meet their needs. “For example, we
appealed to suburban moms with personal shopping assistants, and we attracted
small business owners with the services of Geek Squad, our 24-hour, rapid
response computer support task force,” explained Mike Keskey, president of U.S.
Best Buy Stores.
More important, Keskey says, Best Buy implemented an adaptive operating
model that gave employees closest to the customer more important decision-making
responsibilities, including those having to do with variations in product
offerings, customer service, promotions and even store designs. “We encouraged
our store associates to create better relationships with customers,” Keskey
said. “They brought passion, energy and creativity to this initiative, and they
are the primary reason our test was successful.”
Best Buy also gave its store associates customer-centricity training in
which they were taught the importance of metrics for measuring the results of
all investments in terms of segment growth revenue and return on capital
investment.
The initiative was such a success that Best Buy plans to roll out the new
program to110 more North American stores and to allocate $50 million in capital
expenditures to those stores. In addition, the retailer plans to invest in
supply chain and CRM systems to further enhance the program. The additional
expenditures should be offset by the revenue gains from the customer centricity
program, the company said.
“Our goal is to transform Best Buy into a customer-driven, talent-powered
enterprise that is focused on enhancing our customers’ enjoyment of technology,”
said Brad Anderson, vice chairman and chief executive officer.