Best Buy Research Paper

Centricity or Bust When Brad Anderson became the CEO of Best Buy in 2002, he decided he wanted to differentiate Best Buy from other electronic retailers. His focused differentiation strategy intended to target untapped revenue by identifying and attracting high-end customers. “If implemented successfully, Best Buy will change from a top/down management culture, from corporate headquarters to the store managers and sales associates, to a bottom/ up culture where information on customers, merchandising and marketing ideas flow up to corporate.” (Smith, S. 2004).

This plan called “customer centricity” was based on the idea found in Larry Selden’s book, Angel Customers versus Demon Customers, which theorized not every customer was a profitable

The Timonium store identified two high-end customer demographics in that area, meaning that the store would encompass two customer segments instead of one. I felt concern that I was only current member of the personal shopping assistants (PSA’s) team. However, two other people were hired shortly thereafter and we flew to Chicago for five day’s of intense centricity training. This classroom setting provided us a crash course in business. We learned about ROIC, the goals of customer centricity and the demographics of the customer segments. “Best Buy has identified five initial customer segments, with code names of typical consumers in quotes:

• “Barry,” the affluent professional who demands the latest technology and best service;

• “Buzz,” the active, young male consumer who wants technology and entertainment;

• “Ray,” the family man who wants technology that improves his and his family’s life;

• “Jill,” the busy suburban mom who wants to enrich her childrens’ lives with technology and entertainment;

• And no namer here, just small business customer who can use Best Buy’s product solutions and services.” (Smith, S.

Since we didn’t have an established customer base, what were we to do between Jill customers? Managers expected PSA’s to walk the floor and locate Jill. It became stressful when customers asked for our assistance while we searched for a potential Jill customer. Customers didn’t know that PSA’s weren’t regular employees. When a customer needed help they asked the first employee they could find.

Management felt centric employees should assist with customers. However, they wanted the centric customers directed to the Centricity employees and regular customers led to regular Best Buy personnel. Centric target questions intended to help identify Centricity customers but it took time and energy to engage with the customer. Employees had all learned and role-played techniques such as hands offs. Hand-offs entailed handing off the customer to the appropriate Best Buy employee. To a customer, however, a handoff could feel like a brush off especially if they’re looking for fast assistance.

While the onset of centricity saw a lot of dissension from non-centric employees, things calmed down over time and centric employees began to settle in with their stores. This calm did not