A very interesting blogger, Ramit Sethi, has written a great blog entry about businesses that need to go the last mile
. In this entry, he focuses partly on Best Buy
(BB). What is really interesting about this retailer is that the top-brass tout
the effectiveness of a "customer centric" philosophy which provides a competitive advantage for Best Buy. Meanwhile, consumers and employees alike are over at bestbuysux.org
railing the company's customer service up one side and down the other.
Best Buy is interesting in that it is one of the few electronics retailers who doesn't pay a commission to it's employees. Of course, employees are encouraged to promote "customer loyalty", but I'm not really sure I feed that when shopping at BB.
, there are six years worth of feedback (mostly complaints). If I was an executive at BB, this would be an absolute goldmine for customer research. It is clear that BB has pissed off a lot of customers with it's unfriendly fine print and anti-customer behavior. It appears that they are doing a lot of things wrong from a customer experience standpoint. Why?
They have years worth of unsolicited complaints logged in a public forum. They are (presumably) not dumb people. Why aren't they listening and improving? MY theory is this: There are short-term costs associated with improving the customer experience at BB, and they don't believe the long-term benefits are worth the short term costs. Are they right?
Let's examine some basic facts:
1. BB sells a lot of gadgets
2. These gadgets depreciate quickly
3. These gadgets can be damaged easily
4. Profit margins on these gadgets are significantly lower than other retail items, especially with competition from the internet
These 4 points lead to tough situation for BB. The fact is that returns for these gadgets cost BB a lot of money - more than returns to just about any other retailer that I can think of. What is BB to do? Clearly there are a lot of unhappy customers, but solving this unhappiness will clearly cost BB a lot of money. Will customers be willing to pay more at BB for better service? I don't think so - that is what they get at Circuit City.
Ramit doesn't have a specific recommendation to BB either, but he talks about the importance of the last mile. He refers to the peak-end rule, which says we judge our past experiences almost entirely on how they were at their peak (pleasant or unpleasant) and how they ended. If this is true, BB needs to work on their ending, perhaps using all the available customer feedback to figure out how to create more happy endings and less anti-Best Buy customer evangelists.