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Is Best Buy dying?

A few years ago I did a presentation that included why and h0w Best Buy ran Circuit City into bankruptcy.  So logically a few years later (and with most of their competitors gone!) Best Buy should be king of the electronics world.

But instead it seems that Best Buy may soon follow in the doomed footsteps of Circuit City. How could this happen so quickly to a company that just a few years ago was the dominant player in their industry? Even more importantly- what lessons can a small business learn from the mistakes of Best Buy?  Let me share a few ideas from a recent Forbes article.

1. Ultimately large or small companies need to have the customer’s best interest as their main priority.

2. If you fail to take care of the customer properly do not make excuses:  JUST FIX IT!  (And fix it QUICKLY!)

3. The old rule was if you TICKED OFF a customer he or she would tell 10-15 others. In this day of blogs, bulletin boards and customer review sites that number can grow like a virus.  (Hence the phrase “it’s gone viral!”)  The stakes with “word of mouth” (and the speed) have gone up considerably. For example …

Over a 2 week period nearly 3 million people have viewed this article about Best Buy’s problems on Forbes. This does not include all the linked articles on Wall Street Journal, Facebook and LinkedIn. But then the plot thickened …

A poorly executed followup from the CEO of Best Buy has already received  over 100,000 views in just a few days.  Read it and weep for the poor fellow here.

Now think about what you can apply in your carpet cleaning, restoration or janitorial services company.  Could it be that the time-tested principles of Value Added Service and listening to your customers that we teach in SFS have never gone out of style?  Tell me what you think in the comments section below.

Bill

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4 Responses to Is Best Buy dying?

  1. MIkey P February 21, 2012 at 12:36 AM #

    Our Best Buy took over our Circuit City location and from what I could see BB had all the same stuff for sale and almost the same floor plan.

    Whats the real difference?

  2. Bill Yeadon February 21, 2012 at 9:07 AM #

    Well Mikey,

    When I wrote an article about CC before they failed the main difference between the two companies was how they handled employees. Circuit City got rid of all the experienced people and hired part-timers so as to avoid paying health insurance. Home Depot went through the same problem until they got rid of their CEO. Best Buy on the other hand focused on the Geek Squad and improved customer service. They even got rid of commissions to focus on helping the customer.

    A lot has changed in the meantime. Best Buy’s focus on CDs, movies and video games has caused them to be caught in the Blockbuster vice. If you don’t change fast enough you become irrelevant. Today the smart phones they sell allow their customers to scan products in their store to find a cheaper price elsewhere most likely online. I wrote all this just to say this.

    On December 23rd Best Buy took all of the orders for hot Christmas gifts, e.g. iPads, iPhones, tablets and sent out emails saying they had cancelled all the orders. This blew up on the internet and even people who weren’t affected realized that Best Buy could care less about the customer service that had differentiated them from Circuit City.

    Ultimately while the technology changes will play a role in their demise, it is how they handle customers that will close their doors.

    Mikey those are the differences but it is the similarities with Circuit City that will kill them. Blogs and internet reviews will just hasten it.

  3. Mikey P February 21, 2012 at 9:50 AM #

    Interesting..

    I have received excellent customer service there in the past as was surprised at just how much time a non commissioned employee was allowed to spend with me.

    But…

    I also got many rush jobs by pimply faced yoots who knew less about the product than I did.

  4. Bill Yeadon February 21, 2012 at 9:55 AM #

    Mikey,

    I appreciate your responding to the article as I know your have your own board http://www.mikeysboard.com to attend to. So Mikey, what are your thoughts on the longevity of Best Buy?

    While I realize an individual cleaning company will never get the amount of views that Best Buy gets on a review site, but do you see places like Yelp and Angies List having an effect on our industry?

    Bill
    PS Hope the Fest goes well!

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