Archive for the ‘Circuit City’ Category
When the 2007 holiday season kicked off a little over a month ago, US-based electronics retailer Circuit City introduced a series of TV commercials focusing on the simplicity of the digital lifestyle. With the ads, Circuit City introduces their latest moniker “Simplicity Guaranteed“. According to Circuit City’s Chief Marketing Officer, the new spots “illustrate how Circuit City makes it simple to Shop (on-line), Buy (in-store) and Enjoy (firedog services) your digital lifestyle this holiday season and beyond”. ”Simplicity Guaranteed” is the latest in a series catch phrases used by the retailer over the last few years. Previous slogans have included “Imagine That” (2000-2001), “We’re with You” (2001-2004), “Just What I Needed” (2004-April 2007) and “Circuit City Makes it Simple” (2005 Christmas Season)
All of these past slogans describe brand perceptions that Circuit City aspired to but failed to achieve. Why? Because a company’s brand is not defined by its catch phrase, logo, aesthetic style or culture. A company’s brand is ultimately defined by the experience they deliver to their customers and Circuit City has been unable to consistently deliver experiences that supported those brand promises.
The latest revival of the Simplicity theme is part of a larger strategic framework that I helped develop for Circuit City a few years ago (you can hear about it here). Making it Easy for customers to shop, buy and enjoy is one of the four key ingredients to the vision my team proposed. We also recognized that delivering experiences consistently supported the “Make it Easy” idea would require significant changes in processes, culture and internal success measurements. Almost two years after those recommendations were made, Circuit City has “re-branded” many of the same operational features that they have been touting for years with the “Simplicity Guaranteed” label, but has not done any of the heavy lifting required to support the long-term strategic vision of sustainable growth through exception customer experiences.
Marketing strategist Scott Glatstein suggests five steps for building a strong brand and optimizing customer experience:
- Identify your reasons to believe.
- Identify customer touchpoints.
- Determine the most influential touchpoints
- Design the optimal experience
- Align the organization to consistently deliver the optimal experience
Reasons to believe are those things that the customer experiences that support the brand promise. Circuit City has decided that Simplicity is one of their reasons to believe, but they have not executed any of the other steps suggested by Glatstein. Without those crucial components, the customer experience can easily fall short of the brand promise. Here’s an example:
We made the purchase and left, with tab in hand, for the local store. When we arrived, the iPod was waiting for us as promised, but there was no $15 iTunes card. Our concerns about the conflicting offers are validated and we are now entering confrontation zone.
We showed the tab to the customer service associate who wasn’t sure how to deal with the situation. Someone else was brought over to correct the problem. He suggested to “return” the web order and resell it to get the iTunes deal. The CSA did that, but in doing so, the price went back to the advertised price of $149.99. The CSA called the assistant back and the process of “fixing the order” began. At one point, we were told that we owed another $0.70. At another we were going to get $).09 back. Clearly, the front line associates; the ones that come face-to-face with the customers every day, are not prepared to deal with this problem. The processes have not been optimized to deliver a great experience.
With the line backing up behind us, the CSA team finally found a way to make deliver the transaction with the free iTunes card at the price advertised on the website. The total in-store transaction time was over 20 minutes. Our expectations were not met and the other customers in line behind us got to share our experience as well.
So did Circuit City satisfy their 24/24 guarantee. Technically, yes as the web order was ready in less than 24 minutes. Did the experience reflect “easy to shop, easy to buy”? Absolutely not! Circuit City has not identified and evaluated all of their touchpoints against the “Simplicity Guaranteed” reason to believe. They have not designed optimal customer experiences that include these touchpoints, and they have not aligned the various channels and business functions to deliver an optimal experience. This may sound like an isolated incident, but it is not. Where else is dealing with Circuit City not Simple? How about rebates, scheduling an in-home service or getting a product repaired under warranty if you didn’t buy the extended service plan?
Circuit City was once a retail powerhouse. They practically invented the “Specialty Superstore” concept. Today they are struggling to remain relevant in what has become a commodity market. They have to compete with mass marketers like Wal-Mart and Costco who can price aggressively, niche players like Gamestop and Verizon who can beat them at the “authenticity” game and web marketers like Amazon and eBay who can always deliver a better selection and competitive prices. At $4.62, their stock price is trading a 52-week low and is flirting with a 5-year low. Circuit City will have to find a way to build a truly differentiated brand if they are going to survive. Simply adopting a new slogan that says you “make it easy for me” isn’t going to cut it. They must also consistently deliver a customer experience that supports the claim. Without that, the slogan only serves to set expectations that won’t be met and further erode the brand.
Many of you may have shopped Circuit City in the past couple of months. I would love to hear about your experiences and your ideas regarding how Circuit City could improve the customer experience.
Looks like Circuit City is finally developing the four island Second Life estate that was purchased back in May ’07. As some of you may know, I was in charge of the Second Life project before my job was cut, so I’m really interested to see if what they build follows the strategy that I proposed.
IBM developed a Circuit City store on IBM10 last December which generated a good deal of press, but like most corporate sims, its usually empty now. The store was never really intended to be a permanent home for Circuit in Second Life. It was primarily for demonstration purposes to allow IBM to showcase what could be done for retailers in SL. The content of the store has not changed at all in the last six months and there has been no effort to develop community engagement at the store, primarily due to contractual hurdles with IBM (its their island).
As a starting point for planning a larger SL presence for Circuit City, I did extensive research on early real world brand entries, speaking with counterparts in other companies as well as marketers, branding experts and others. It didn’t take long for me to come to the same conclusion of many prominent Virtual World observers:
Most real world brands just didn’t understand how to approach the medium.
It would not be appropriate to reveal details of the strategy I proposed as Circuit has not done so and it may not be what they are going with in the end. I will say that the strategy leveraged lessons learned from other real brand builds and was specifically designed to promote engagement on several levels. I have not been in contact with anyone from Circuit since I left, but from the 30,000 ft. view on the map display, they seem to be close to an announcement.
To my regular readers, I’m sorry that the blog has gone a little stale over the past week, but I’ve been a bit preoccupied trying to find a new job. Nevertheless, traffic is way, way up on the Sprint post and I have been having lots of great conversations with people who have commented on it. In lieu of a new topic, which I promise to get to this week, I’ll pass on some of those additional thoughts from my conversations. Perhaps if Sprint were a Sense & Respond organization, they would be joining in the conversation or at least be actively listening. My guess is they’re not.
Of all the comments on the post, no one defended Sprint. To the contrary, all but one had negative things to say about them. The other guy just had negative things to say about female cellphone users. Thought certainly not a statistically valid sample, I would wager that few people really love their wireless provider. It’s the nature of the industry in the US. With limited competition due to the high cost of entry, the wireless providers aren’t compelled to differentiate on customer service and in my experience, Sprint is the poor service leader.
You may have noticed that this story has gone mainstream with coverage by the Associated Press, ABC News and Brandweek . The details, if you haven’t seen them are mind-boggling. David Reich wrote a great summary today on his blog, “my 2 cents”, but here’s the big thing to consider:
Out of Sprint’s 52 Million customers, only 1000 received the letter saying they were calling customer support too much. Do the math. That’s less than .002% of their customers.
There is no way that that small percentage was adding any material cost to their operation. (update: As a friend pointed out, the actual cost of these calls could have been material; however, the methodology for counting is unclear. For example, the ABC story indicates that a single call with 5 internal transfers might have been counted as 5 calls). Sprint says that, on average, these customers were calling in 40-50 times per month. Perhaps that’s true and given my personal experience with trying to get my own Sprint bill fixed, I can appreciate that.
Nevertheless, Sprint made the decision to go after them in a way that became very controversial, very public, very fast. The cost of this action in terms of bad PR is on par with Circuit City’s recent bungle. where they fired 3400 of their most experienced store employees to cut costs. Several months later they are still trying to explain that one, but it’s too late. In both cases, the damage to public perception has been done, although in Sprint’s case, it was pretty low to begin with and their defensive spin machine is just getting fired up. In my opinion, it was a failure of leadership in both of these companies to make such shortsighted decisions without considering how their customers would view them.
One of my conversations this week was with the Conversation Agent herself, Valeria Maltoni. She pointed me to a post she wrote about the wireless business in the US and speculates that Apple may be just the disrupter needed to shake up the industry. It’s a great post and has some David Letterman Top 10 humor to boot.
An article published today in Advertising Age really resonated with me. It makes the case that the maturing marketplace, combined with the hyper-connected, in-control consumer “has created a seismic shift from one-size-fits-all mass markets to millions of markets of self interest.” That assessment carries huge implications for retailers who are trying to move product that was once a specialty, but is now a commodity. Strategy consultants Booz Allen Hamilton explain it this way:
As every market matures, choice increases. Then competition drives up quality and convenience to the point at which offerings become commoditized. The only businesses that then thrive are those that move beyond “me-too” or incremental offerings to marketing more-relevant and more-differentiated products and services. The only way to accomplish this is to focus on a narrower target.
Technology & The Long Tail
Technology has played a major role in facilitating this shift. Marketers are now able to micro-target specific groups, engage customers with more frequency and intimacy, and customize to consumer specs. Moreover, technology has enabled consumers with the tools to seek out suppliers that offer just the thing they want.
Think about it. If you are a retailer focused on selling lots of stuff to lots of very different people, you are probably fighting a loosing war of diminishing margins, market share and profitability. On the other hand, brands that have figured out how to excel at attracting and keeping loyal a narrowly focused niche will probably continue to do well. And why is that? Once you, the customer, has experienced having your ever-increasing levels of self-interests met by a niche provider, you have a hard time going back. For example, why would I continue to go back to a retailer for accessories that I know from previous experience, they probably will not have (not even on their website).
As even a senior Wal-Mart official recently said, “no customer today will stand to be treated as part of a mass market anymore.”
This is a major disruption and marketers who fail to respond to it quickly will suffer. According to Advertising Age, the value propositions of those who ignore niche marketing…
“…will be less relevant than those of competitors. For those slow to adopt niche marketing, the future also is bleak. Attempts to recoup share will be difficult because competitors will have preemptively established closer customer relationships.’
A number of brands and marketers have embraced niche marketing. Names like Target, Crocs, Red Bull and American Girl. The all have the same objectives as any other marketer, but they have sensed the disruption and have responded by finding a new way of going to market.
Narrow, not Small
The other thing that has changed is what niche marketing really means in today’s environment. It’s still “the targeting of a more narrowly defined customer group seeking a distinctive mix of benefits”, but niche markets are not the “marginal opportunity” that they were once viewed to be. Today, niches are viewed much more positively.
In today’s marketplace, niches are flourishing. Some niche brands are generating hundreds of millions in sales. Sometimes, narrow niches, fueled by mavens and connectors, become the next big, disruptive thing. The big point of the article is that niches should not be equated with small. Instead, think of narrow. Then target very specific groups who will relate to and find differentiation in your offering. At this point, you are no longer a commodity and you can increase your margins by charging a premium. Do this over and over with different products and services, and you can generate volume and growth that makes up for your narrow targets.
Smaller targets, larger focus
Ten years ago, the medium was still the message. Eight years ago, we could still think of the 4P’s — product, pricing, place, promotion — as essentially independent strategies. Five years ago, everyone started to buzz about customer-relationship marketing. About two years ago, we got really excited about digital-marketing tactics and started to apply them without any real strategic purpose. All this has changed.
So what’s really new about the new niche marketing? It’s realizing that while our targets have to narrow, our definition of marketing communications has to broaden. Today, everything communicates what a brand stands for, all the time.
It’s like the old saying: If you are on the wrong train to begin with, every stop along the way is the wrong stop.
The article closes with 10 principle to harness the power of niche marketing:
- Position your brand as narrowly as is economically possible.
- Become the specialist that anticipates the needs of your target.
- Rapidly work with the target niche to co-innovate.
- Set as your goal such consumer centricity that the target niche will want to co-brand their identity with yours.
- Live by a higher standard of ethics.
- Embrace a business model and metrics that grow the most valuable assets of the new niched economy.
- Reap first-mover advantage by learning how to identify a niche of opportunity.
- Re-imagine your role as that of entrepreneurial founder of a special interest group.
- Forget push marketing; excel at pull marketing.
- Realize your brand is now “media” competing against all other media
What do you think? Does this make sense to you ? Can you think of companies that could immediately benefit from leveraging niche marketing?
(Source: Advertising Age)
Earlier this week, I wrote about the opportunities in addressing the sources of customer dissatisfaction. On Friday, APs Technology Writer, May Wong, published a report citing difference in the service levels between Circuit City and Best Buy. The report was insightful and absolutely reinforced the points I was making earlier in the week. I’m including some quotes and commentary below.
This customer’s past experiences have let him to solid opinions of the two retailers. Who do you think he recommends to his friends and family?
Ralph Devoe’s hunt for a new computer monitor didn’t include a stop at Circuit City, even though one of its stores was only a few doors down from the Best Buy where he went shopping this week. “They often don’t have what I want,” the retired physicist said. “And Best Buy just seems a little better. The salespeople actually know what they’re doing.”
Having a large inventory selection and “knowledgeable associates” are really important, but they are big and potentially costly things from an operational stand point. In my earlier post, I focused on the smaller sources of dissatisfaction, like how the customer is treated in the store. The following really drives that point home:
For sure, bargains and good rebates could be found at the stores of either chain — an important draw for the price-conscious American public.
But other times, it’s as basic as how a store feels, how the products and aisles are laid out, how the workers there treat you.
A friendly greeter is stationed just inside Best Buy’s front door.
“How’s it going? Welcome to Best Buy,” he repeats.
Within a minute of browsing in a section, a Best Buy associate swings by to offer assistance. The staffer casually dispenses product info or comparisons, and just as quickly lays back if you decline the help.
A visit to Palo Alto’s Best Buy and Circuit City to pick up a component-video cable illustrates the differences.
At the Circuit City, it took some effort to find a store employee to ask where to find the cables — and the red-shirted employee who was tracked down misdirected this shopper to cables for TVs.
At Best Buy, the greeter at the door quickly responded with a more specific question, “What kind of component video?” By asking, he learned the cable’s purpose was for a game console and pointed to the video game section.
The desired Sony-branded cables were sold out, but the Best Buy associate did double check the store inventory.
That kind of attention to detail goes a long way in a shopper’s experience.
I also talked about ensuring that your interactive displays are always functioning. Ms. Wong points out this difference between the two retailers:
At another Best Buy in Sunnyvale, for instance, the music MP3 players on display were in good working order, and a patron could test the controls and use headphones to listen to them. By contrast, the Palo Alto Circuit City’s portable players — with the exception of a separate display for Microsoft Corp.’s Zune player — were not powered and lacked headphones so a shopper couldn’t get a good test run of the devices. Product information placards were also missing from some models.
The bad news for Circuit City is that this “little stuff” is rampant throughout its stores and it all adds up to a pretty crappy experience for customers. Both companies recently reported results for the previous year and the differences were like night and day. I am not an analyst and I can’t tell you to what degree Circuit City’s continued lagging performance is attributable to the sources of dissatisfaction in their stores, but my gut tells me that it is a significant cause.
The good news is that these problems can be overcome and for the most part, the solution doesn’t involve a big capital investment. What it does require is much more valuable, and perhaps more scarce, than money. It requires people that care. Store associates that take the time to look for things that aren’t right with their store and fix them. Support associates that are not only responsive to the needs of the people in the store, but are proactively looking for ways to improve the operation so that the store associates can focus on the customer and not the infrastucture.
I have several official and unofficial jobs at Circuit City. One of the “official” ones is that I am heading up our entry into the virtual world of SecondLife. Partnering with IBM, we have a “demonstration store” on one of IBM’s islands. It’ was in no way designed to be a compelling SecondLife experience, but was intended to be an interesting device to show the “art of the possible” to our executives. The “store” has been up for a little over 3 months and we are starting the process of envisioning the second generation experience.
Our IBM partners told us that our competitors from Minneapolis were inquiring about SecondLife at January’s CES. Today, I saw that Geeksquad island has opened in SecondLife. That’s a fast implementation and points out the strength of BestBuy’s Sense & Respond capability, but the big story here is something else entirely.
Looking at the Geek Squad SecondLife announcement page, I came to a realization about the different marketing approaches for Geek Squad and firedog. For months, I’ve been trying to figure out why I didn’t feel comfortable with the firedog brand. Today it hit me.
In today’s “experience economy”, it’s not enough to simply make your products and services available. To win in this market, you need to be able to tell compelling stories. Lots of promiment Marketing types like Hugh and Seth, have discussed this concept recently. I think Geek Squad has that ability. They have created this “geek mystique” that resonates with the masses of people who know they are not as technically savvy as some folks (like the geeks). With their SecondLife marketing, they carry this “story” forward:
“While this announcement is expected to help Geek Squad’s customers by offering an extension of Geek Squad’s 24-hour service, it is also expected to cut further into its Agents’ already meager social lives.”
“I’m constantly asked about what it is that Geek Squad Agents do in their free time,” said Robert Stephens, founder and Chief Inspector of Geek Squad. “While it used to be a pretty clean mix — divided between poring over computer manuals and sleep — we’ve seen the balance shift in recent years to poring over computer manuals and immersion in digital worlds like multiplayer online games and environments like Second Life.”
Sure, most Geeks have probably never even been to SecondLife, but the story that has been build around the “Geek” makes it easily believable. It makes sense that “geeks” would be out on the technology edge. Contrast that with firedog which uses the metaphor of man’s best friend to represent the brand. The big word here is “Loyal”, but there are a whole series of other words that are used to describe what “what makes a firedog a “firedog” including “Tidy”, “Real”, “Grounded”, and “Fresh”.
The problem is that these are just words. They don’t really tell a story. They don’t say “these guys live for the technology problems that drive you crazy”. There is no “mystique”, no story about who these guys are and why you should use them. It’s simply not as engaging as the “Geek Mystique”.
I’ll probably get some serious grief from my Circuit City family for this post, but I have to call it as I see it.
What do you think?
Last October, I wrote about the decisions customers must make regarding emerging technology such as the new HDMI 1.3. Since then, this post has consistently been one of the most active on NextUp getting an average of 8 reads a day. Those stats tell me that technology customers are looking to really understand the landscape before purchasing and I thought that was a great insight that my company could use. You see, Circuit City has a pretty good website with lots of educational material, user ratings and forums to help customers with their technology decisions. But if you search the site for “HDMI 1.3” you won’t find anything.
With my statistics in hand, I went to the website’s content managers and suggested that we should provide educational info about HDMI 1.3 (pros and cons), even though we don’t sell any HDMI 1.3 equipped hardware at this time (except for the PS3). My rationale went like this:
- Generally, people are researching their technology purchases more than ever before. Many customers are better educated on the particular technology than the average salesperson. Researching HDMI 1.3 is no exception.
- Putting the info on our site allows us to help them with their decision.
- If we don’t put it on the site, we lose credibility with some customers.
- If they decide that HDMI 1.3 is not for them, great, we might make a sale.
- If they decide to go with HDMI 1.3 after learning about it on our site, that’s great too because we were able to help them. That provided something of value and earns us credibility.
Unfortunately, that argument didn’t win out over the one that says:
“We don’t sell and HDMI 1.3 stuff. If we tell them about it, we may lose a sale.”
Hmmmm. Is that putting the customer first????
I know there will be a fair number of you reading this post. If you live in the US, I would really appreciate it if you would comment on this:
Should Circuit City put educational info about new technologies (like HDMI 1.3) on their website even if they don’t carry the product. It would be great if you explain your answer. I will post the results in a week.
The power of the internet and personal media tools has forever changed the balance of power in favor of the customer. One Man’s Voice can be heard by millions. Here’s a story that I think really drives that point home.
A few months ago, I contributed content to a presentation initiated by David Armano. David is the Creative VP for the marketing firm Digitas. He is also a very influential blogger who is well known for creating simple but powerful graphics to communicate his ideas. The presentation, entitled “2006 in Your Words”, was a collection of insights and opinions about what the year’s big themes were from a marketing and communications standpoint. To demonstrate the power of Web2.0 collaboration, the presentation contained content from little fish like me as well as some industry heavy hitters. You can see the presentation here.
“We have been shifting media power to individuals for years now. Perhaps it started with the VCR. The internet shifted control of retail to the customer years ago. Today, individuals have the power to control markets, create and distribute their own content, build and occupy virtual worlds with new opportunities for commerce and entertainment. They don’t have to rely on some corporation to provide the experiences for them. They simply use the new tools, which they are mastering as fast as the tool developers can build them, to build whatever they want, to be whoever they want to be and to let their voice be heard.“
Why am I telling you this? I work for Circuit City Stores and have been helping the organization become more adaptive through the use of social media tools. Last night I came across a number of user generated videos about Circuit City. Some were commercials, done by associates, which is interesting in itself,
But then I found this
You should watch it all the way to the end. It’s powerful! As a company, we are determined to become great at providing exceptional customer experiences. We are making progress towards this goal, but this statement from one man points out how difficult that journey will be and how much harder we need to work to get there.
Corporations need to realize that today’s customer expects perfection and has an increasingly loud voice that can potentially reach very large numbers of people. They are actively sharing their experiences and feelings to anyone who will listen. We should be listening to them!
Chief Linden, Philip Rosedale said today that Linden Labs is going to make the core codebase for SecondLife available to developers. Considering that the contents of SecondLife has been developed entirely by user “residents” and the number of registered avatars has grown exponentially over the past year, the move to open source is a natural progression. After all, Linden has a limited number of developers and there is much work to be done to meet the needs of its growing population and to make the software more palatable for less powerful computers (like most of us have).
Given the growth of SecondLife, the vision my many in the software development community that a 3D web is the shape of things to come, and the success that other projects like Firefox and Linux have had using the community to build the code; this move is smart and should help keep things moving. It can also lead to some interesting new capabilities:
“There are lots of handicapped people using ‘Second Life,’ It’s one of the really inspiring things about it,” Rosedale said. “There are a lot of ways of connecting people to their computers, not just mice and keyboards but gaze detection and neuromuscular stuff” that Linden Lab doesn’t have the manpower to address, but he hopes outside programmers will.
Someone also could “hook up an exercise bike and fly around ‘Second Life’ while exercising,” he said, or write a program for accessing the world from a smart phone.
“All that becomes extremely easy to do,” said Rosedale, who will speak tomorrow at the International Consumer Electronics Show in Las Vegas.
The details for the more technical readers out there, according to an AP report are as follows:
The code will be available under the GNU Public License, a widely used agreement among open-source developers that allows them to legally modify and share software. Linden Lab will review and test some add-ons, modifications and bug fixes, and incorporate them into the official version of the viewer, which can be downloaded for free.
Monday’s announcement doesn’t cover all the software behind “Second Life.” The program that controls the underlying infrastructure will remain proprietary, though Rosedale said open-source “is absolutely our direction.”
Fortune has an exclusive interview with Rosedale as well as comments from Electric Sheep, one of the largest in-world construction companies, and IBM who worked with my company, Circuit City, to open a virtual store in SecondLife. It’s worth the read.
Today’s technology consumer is faced with a no win situation. The planned obsolescence model of the 20th century, in which manufacturers made products that would wear out and need to be replaced, has been, well, replaced with a model in which products become obsolete long before they break. In the PC business the cycle is about 12 weeks! This rapid upgrade cycle frustrates customers and is stifling purchases in certain categories, especially among older customers. The NY Times has an interesting article about the fear of buying technology:
“There is a fundamental shift that is taking place,” says Samir Bhavnani, research director at Current Analysis, a market research firm. “People thought a product would last 10 years. They keep it three years. They upgrade their cellphone every year.”
The frustration and tendency to delay purchase is compounded by the rapid race to the bottom in terms of price. The TV you would have paid $3000 for last summer, dropped to below $2000 this past fall. If you bought it then, you probably felt good; that is until you saw the price this past Christmas.
“But this new form of obsolescence can stymie the consumer because it makes little sense to buy now if the product will be cheaper tomorrow. Knowing when to buy becomes as important as knowing what to buy… Mr. Axtle, who already has a 51-inch Sony flat-panel TV in his “entertainment room,” thinks of TV like he did PCs more than a decade ago. “You’d get the most money could buy,” he said, but it wasn’t enough because the technology changed so quickly, making the PC obsolete in only a few years. “You couldn’t hope to get ahead,” he said.”
This trend is expected to continue through 2007, frustrating both customers and CE retailers. CE retailers should look for strategies that either take advantage of the new model, like encouraging customers to use the lower prices to replace more than just the family room TV; or they should look for ways that provide alternative products and services that minimize the negative effects of the new model.
Best Buy is going to sell a packaged solution of Media Center plus home automation. Literally, it’s a package — a box. A customer walks into a Best Buy store, delights in the demo, buys the package, and waits for its arrival in a big box about four-foot cubed. The package costs $15,000. For that you get a Media Center PC, Lifeware automation software from Exceptional Innovation, an Xbox 360, IP surveillance cameras, automated light switches, a thermostat and installation. It’s a complicated business model, called ConnectedLife.Home, and it’s bound to pit the new group against other Best Buy factions like Geek Squad.
Click here to read the very long and detailed article on this new innovation.
Customers Rock is a new WordPress blog which is getting quite a boost due to being referenced on a number of popular marketing blogs. The latest post on Customers Rock is about Costco and their new free technical support.
Costco has been listening to the frustrations of their members and has entered the realm of providing technical support to help ease their pain. According to a store supervisor that I spoke with, Costco will provide free technical support for televisions, cameras and camcorders, as well as desktop and notebook computers. The service has been available for about one week now in the Southern California area. It is part of their existing Concierge Services, which Costco started testing for high-tech TV installs this past summer.
The real reason that Costco is doing this is that the returns are killing them. Costco has an amazingly liberal return policy. They have expanded their Home Entertainment offering and a pretty good computer business, and all that new technology is difficult for customers to manage. As a result, they have seen returns skyrocket and profits erode.
Offering free support is a brilliant strategy, assuming that they can deliver a great experience. They are well on the way to that by assuring members that when they call tech support, they will speak with someone in the US. There is nothing more frustrating to me that to hear a thick accented CSR introduce themselves to me as “Bob” or “Mary” and then not be able to communicate with me.
In addition, Costco is offering the free tech support for the life of the product. Now that’s an added value that’s easy to understand.
Costco intends to take on Circuit City and Best Buy for the Home Entertainment and Computer customers and they are coming out swinging by turning what was a problem for them into differentiated offering for their members.
Circuit City is offering a new interactive DVD/Gift Card just in time for the holidays. It looks like a gift card (rectangular, etc), but it has this hole in the middle and the magstripe is on the front. You can get one for any value and it spends just like a gift card should. BUT, pop this baby into you DVD drive and you get:
- 5 free emusic downloads
- Access to an additional 50 free downloads from emusic
- A snowball fight video game
- Ideas of what to redeem the gift card for – scrolls through 24 hot product where users can click on the product and go directly to the product page on circuitcity.com to read customer reviews, get more info or redeem their gift card and purchase the product
- Downloadable holiday screen saver, wallpapers and gift tags
Because of availability limitations, these cards are only available in Circuit City stores locations (not on the website).
Full Disclosure: I work for Circuit City, but not in a marketing capacity. I just thought this was cool and different.